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How Does Pakistan Keep Getting Loans? Unpacking The Dirty Secrets Behind The Global Funding That Shields A Failing State
New Delhi: Pakistan is broke. Its economy is shattered. Foreign reserves are vanishing. Yet it keeps getting blank cheques. Weeks after the International Monetry Fund (IMF) handed it over $1 billion in emergency funds plus an additional $1.3 billion in loans, the nuclear-armed state got another $800 million from the Asian Development Bank (ADB). India protested. The world ignored. And it is not the first time.
Why does a nation with internal chaos and globally infamous for harboring terrorists keeps getting rewarded? Despite global acknowledgment of Pakistan's double-faced policies – begging for aid while exporting 'jihad' – the money keeps flowing. So what makes Pakistan the global community's 'spoiled child with a nuclear button'?
The answer is not economic. It is political, strategic and dangerously hypocritical. Let's get this straight:
Pakistan is not getting loans because it deserves them. It is getting them because the world is afraid of what will happen if it collapses. Its economy is in tatters. Pakistan's forex reserves dipped in 2023 below $3 billion – barely enough for three weeks of imports. The 2022 floods cost the country more than $30 billion in damages.
1. Too Nuclear to Fail: Pakistan's debt has ballooned to over $130 billion. If it defaults, global banks lose billions. It is financial blackmail that is working.
2. Location: Sitting between China, Afghanistan and Iran, the country holds strategic real estate. The West, especially the United States, does not want it slipping entirely into China's orbit.
3. A Loan with Strings: These are not freebies. IMF and ADB loans come with demands – raise taxes, cut subsidies and sell public assets. Western companies often swoop in to buy the leftovers.
Global lending institutions like the IMF and the ADB may present themselves as neutral bodies, but their actions suggest otherwise. They claim to operate on technical grounds, but do not blink twice when handing over billions to a country that fuels terrorism in Kashmir and harbors global fugitives.
And where is India in this equation? Despite protests after attacks like Pahalgam, New Delhi's influence is minimal. India's voting share in the IMF is small compared to the United States and Europe.
Meanwhile, Pakistan's removal from the Financial Action Task Force (FATF) grey list in 2022 made getting loans even easier.
The United States sees Pakistan as a pawn in its Afghanistan endgame. China, through the China-Pakistan Economic Corridor (CPEC), is turning it into a client state. Loans are just the leash – a way to pull Pakistan closer when needed and push it when not.
Who Really Benefits?
Not the people of Pakistan. Experts like Sushant Sareen argue these loans fatten the Pakistani military, not fuel reforms. Former diplomat Kanwal Sibal warns that the IMF funding indirectly supports terror. Even former Pakistani envoy Husain Haqqani admits that the IMF is an ICU for Pakistan, not a cure.
These loans do not save Pakistan. They sustain it just enough to remain a useful mess. A mess that is allowed to fester because it serves the interests of those who pretend to fix it. Pakistan is not only playing the victim, it is gaming the system and the system is letting it.
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