"Not sure how...": Omar Abdullah Slams IMF Over $1 Billion Loan to Pakistan Amidst Escalating Tensions with India

ammu and Kashmir Chief Minister Omar Abdullah on Saturday took a swipe at the International Monetary Fund (IMF) for approving a fresh $1 billion loan to Pakistan amidst heightened military tensions with India.

Taking to social media platform X, Abdullah questioned the rationale behind the move, especially as Pakistan continues cross-border strikes. “I'm not sure how the 'International Community' thinks the current tension in the subcontinent will be de-escalated when the IMF essentially reimburses Pakistan for all the ordnance it is using to devastate Poonch, Rajouri, Uri, Tangdhar & so many other places,” he wrote.

The criticism came just a day after the IMF announced the conclusion of the first review of Pakistan's economic reform programme under the Extended Fund Facility (EFF), allowing for an immediate disbursement of approximately $1 billion. This disbursement raises the total funding received by Pakistan under the arrangement to around $2.1 billion.

The IMF said in a statement that the 37-month EFF programme, approved on 25 September 2024, is intended to “build resilience and enable sustainable growth” in Pakistan. The plan prioritises macroeconomic sustainability and includes measures to improve climate and economic resilience through its Resilience and Sustainability Facility (RSF).

However, the timing of the loan approval has drawn sharp criticism from Indian officials and commentators, as it coincided with Pakistan’s deployment of missile-armed drones and long-range weaponry targeting Indian military and civilian infrastructure in Jammu and Kashmir, Punjab, Rajasthan, and Gujarat.

India’s Ministry of Finance also voiced strong reservations about the IMF's decision. In a statement issued after India abstained from voting at the IMF board meeting, the ministry raised doubts about both Pakistan’s compliance with IMF conditions and the potential misuse of the funds. “Pakistan has been a prolonged borrower from the IMF, with a very poor track record of implementation and of adherence to the IMF's programme conditions. In the 35 years since 1989, Pakistan has had disbursements from the IMF in 28 years,” the statement read.

It further pointed out that since 2019 alone, Pakistan has received support under four separate IMF programmes. “Had the previous programmes succeeded in putting in place a sound macroeconomic policy environment, Pakistan would not have approached the Fund for yet another bailout,” the ministry said.

The Indian government suggested that the situation raised broader questions about the effectiveness of IMF programme design and its monitoring mechanisms. “This track record calls into question either the effectiveness of the IMF programme designs in the case of Pakistan or their monitoring or their implementation by the country,” it stated.

The Finance Ministry also flagged concerns about the Pakistani military’s involvement in economic affairs, warning that it could undermine any efforts at reform. “The Pakistan military’s deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms,” the statement noted. “Even when a civilian government is in power now, the army continues to play an outsized role in domestic politics and extends its tentacles deep into the economy.”​