Shashi Tharoor Slams IMF Bailout to Pakistan, Calls for Oversight on Fund Use

Congress MP warns IMF aid may indirectly fund terrorism, urges safeguards through diplomatic channels

HH News Desk 2 weeks agoLast Updated: June 7, 2025

930 4 minutes read

BRASILIA, June 3 — Senior Congress leader and Lok Sabha MP Shashi Tharoor, currently heading an all-party parliamentary delegation in Brazil, issued a pointed critique of the International Monetary Fund (IMF) on Monday, over its recent disbursement of funds to Pakistan under the Extended Fund Facility (EFF). Speaking to reporters in Brasilia, Tharoor said India would welcome any financial assistance aimed at genuine development but raised concerns that such bailouts may indirectly bolster Pakistan’s defence spending and support for cross-border terrorism.

Tharoor’s remarks come in the wake of a USD 1 billion disbursement cleared by the IMF Executive Board on May 10, following the first review of Pakistan’s ongoing economic reform program. The package was part of a broader agreement under the EFF designed to stabilise Pakistan’s macroeconomic framework amid inflationary pressure and fiscal challenges.

“We don’t begrudge any country its development if the money is to be spent truly on getting people out of poverty,” Tharoor said. “But if that money simply enables Pakistan to divert more resources to supporting terrorism, to arming themselves to attack us, and so on, then it would be most unfortunate.”

Call for Diplomatic Intervention at Multilateral Bodies

Tharoor urged Indian diplomats to formally raise these concerns within global financial institutions, including the World Bank and the IMF, both of which include India as a member nation with voting power.

“I hope that the World Bank and the IMF, both of which are bodies in which India does have some influence, will be told that it is extremely important to have complete safeguards to ensure that this money is only spent the way it’s supposed to be spent,” he stated.

His comments align closely with India’s official reaction to the May 10 IMF decision. New Delhi had previously expressed its discomfort with the timing of the package and flagged that such financial support to Islamabad, if unchecked, risks enabling further militarisation and terror infrastructure.

India Welcomes IMF’s Conditionality, But Remains Wary – Shashi Tharoor

On May 23, Indian government sources acknowledged the inclusion of 11 additional conditions imposed on Pakistan by the IMF as a positive step. However, they made it clear that India is not opposed to developmental assistance per se.

“We are thankful for the additional 11 conditions imposed by the IMF on Pakistan,” a senior official said. “However, we are not against any financial assistance provided for genuine developmental agendas. We have raised questions regarding the timing of the recent bailout package given to Pakistan by the IMF.”

The official further pointed to data suggesting that Pakistan’s arms procurement and defence spending have shown a noticeable uptick in recent months. “All these arms and ammunition are then used by Pakistan against India,” the source remarked, underlining India’s core concern.

Regional Stability at Stake

Pakistan’s economy remains under intense strain, with high inflation, foreign exchange shortages, and declining foreign investment. While the IMF support is intended to stabilise its macroeconomic fundamentals, Indian officials argue that without rigorous monitoring, such funds could free up fiscal space for Islamabad to continue sponsoring hostile activities across the border.

“Every dollar that goes into Pakistan’s development budget potentially allows another dollar to be redirected into its defence or intelligence apparatus,” said a former Indian diplomat familiar with IMF protocols. “That’s the broader strategic worry for India.”

India has long maintained that Pakistan must be held accountable for harbouring terror networks and promoting violence across the Line of Control (LoC). Multiple dossiers shared with international partners and UN bodies have outlined India’s evidence-based concerns regarding Pakistan-based terror outfits operating with impunity.

IMF Statement and Pakistan’s Position

On May 10, the IMF had publicly noted the progress made by Pakistan under the EFF arrangement, stating via X (formerly Twitter), “IMF Board approved the first review of Pakistan’s economic reform program under the EFF, enabling a disbursement of ~$1 billion, reflecting strong program implementation which has contributed to continuing economic recovery.”

While Pakistan’s finance ministry welcomed the approval, there has been no formal response to India’s remarks. Analysts in Islamabad have, however, argued that the funds are being used for structural reform, not military purposes.

India’s Strategy Going Forward

With future tranches of IMF assistance to Pakistan likely contingent on further reviews, India is expected to maintain pressure through diplomatic channels to ensure that these packages remain tightly linked to civilian developmental goals and poverty alleviation measures.

“It’s a matter of institutional integrity,” said a source in the Ministry of External Affairs. “The IMF and World Bank were never meant to indirectly underwrite military aggression or support regimes that back terrorism. India will continue to engage with these institutions to uphold that standard.”

Tharoor’s remarks in Brasilia signal a broader political consensus in India on the need to closely monitor international aid to Pakistan. His framing of the issue — one that balances humanitarian concern with strategic caution — underscores the delicate line New Delhi must walk as it navigates global economic governance while safeguarding its national security interests.

With the IMF’s second review expected later this year, India is likely to push for even stricter conditionality, improved transparency in fund utilisation, and multilateral mechanisms to ensure that developmental aid does not inadvertently fuel instability in South Asia.

Written by Amit S. | Published on 3 June 2025 | Source: ANI

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