logo
Do IMF Bailouts Provide Pakistan Cover To Plan Terror Attacks Like Pahalgam?

Do IMF Bailouts Provide Pakistan Cover To Plan Terror Attacks Like Pahalgam?

News1807-05-2025
Last Updated:
As Pakistan seeks another $1.3 billion from the IMF, India warns the funds may be propping up terror, not just the economy
As the International Monetary Fund (IMF) prepares to review a $1.3 billion disbursement to Pakistan on May 9, a critical question is taking centre stage: Are international bailouts, meant to stabilise fragile economies, indirectly enabling Pakistan's terror infrastructure — including attacks like the one in Pahalgam?
For India, the answer is increasingly clear: yes, not by direct funding, but by propping up a system that frees resources, shields proxy networks, and insulates military intelligence operations long linked to cross-border terrorism.
This isn't just rhetoric. On May 7, India backed its concerns with action, launching Operation Sindoor — a precision military strike targeting nine terror launchpads across Pakistan and Pakistan-occupied Kashmir (PoK). The diplomatic message was unmistakable: terror cannot be subsidised — not by aid, and certainly not by the IMF.
The Link India Is Making: Bailouts, Budgets & Bloodshed
India's contention is not that IMF funds are wired directly to terror cells — but that these bailouts liberate Pakistan's internal finances, allowing the state to redirect domestic resources to its military-intelligence ecosystem, including the ISI, and terror groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).
While the IMF's disbursements are earmarked for balance-of-payments or climate resilience, they relieve fiscal pressure on Islamabad, letting its own funds flow unchecked to strategic priorities, including those India alleges are deeply enmeshed with proxy warfare.
In New Delhi's view, this is not a bug in the global system — it's the entire problem.
The tipping point came on April 22, when gunmen disguised in army fatigues ambushed a tourist group in Baisaran Valley, Pahalgam, killing 26 civilians. The Resistance Front (TRF), widely seen as a LeT front, initially claimed responsibility. Though it later withdrew the claim, Indian intelligence maintains that cross-border handlers, encrypted communications, and digital forensics tied the attack to Pakistan-based infrastructure.
Recovered devices reportedly bore signatures linked to earlier LeT-led assaults, reinforcing India's belief that Pahalgam was not an isolated terror strike, but the output of a funded, protected, and cross-border network.
Operation Sindoor: From Evidence To Action
India's military response — Operation Sindoor — struck nine locations across PoK and Pakistan, including Muzaffarabad, Bahawalpur, Sialkot, and Kotli — areas known to house LeT, JeM, and Hizbul Mujahideen assets. Satellite imagery later confirmed structural damage.
Crucially, no Pakistan Army bases were targeted. The operation was framed as counterterrorism, not retaliation, but the real audience wasn't just Islamabad. It was the international community, especially financial institutions, that, in India's view, continue to fund a state that exports terror while playing victim.
Pakistan's IMF Dependency: A Pattern With No Reform
Since its first IMF agreement in 1958, Pakistan has entered 23 programmes, averaging one every three years. Structural adjustment packages in 1988, 1994, 2001, and 2008, and more recently:
While these funds are framed as lifelines, critics — including former IMF insiders — say Pakistan has repeatedly failed to implement structural reforms. The 2024 review praised short-term stability but flagged a familiar problem: reform backslides once disbursements begin.
New Delhi argues that every IMF bailout stabilises Pakistan's balance sheet — and frees up space for opaque spending elsewhere. This includes:
Groups like Jamaat-ud-Dawa continue to operate freely in Pakistan, despite being sanctioned internationally — a fact India says proves how state complicity masks itself behind economic crisis narratives.
What Global Think Tanks Say
Diverting resources to non-transparent defence priorities
Operating terror training camps with state protection
Maintaining selective compliance during FATF grey-listing
Even FATF's grey-listing (2008–2015, 2018–2022) failed to dismantle these terror ecosystems — largely because financial pressure was always offset by global bailouts.
IMF's Bind: Economic Stability Vs Security Risk
For the IMF and Western backers, the dilemma is real. Cutting Pakistan off could accelerate:
But turning a blind eye to India's charge — that IMF funding is enabling a bloodstained status quo — carries its own consequences.
India has formally urged the IMF, World Bank, and Asian Development Bank to reassess financial assistance to Pakistan in light of the Pahalgam massacre. New Delhi has raised concerns that such aid may inadvertently support terror infrastructure.
Previously, India had chosen to abstain from voting on IMF assistance to Pakistan, preferring not to obstruct multilateral economic relief despite deep bilateral tensions. However, the Pahalgam massacre and mounting evidence of cross-border complicity have prompted a serious policy rethink.
According to a report in the Economic Times, a government source confirmed that India is now considering opposing the $1.3 billion loan, citing concerns that such support 'could indirectly end up funding terror operations."
In an assertive diplomatic signal, India also appointed Parameswaran Iyer, Executive Director at the World Bank, to temporarily represent it on the IMF board — a move seen as reinforcing India's intent to raise objections at the highest level of global financial governance.
Defence First, Development Later: Pakistan's Fiscal Priorities
India's alarm over how IMF bailouts may free funds for terror is tied to a broader fiscal reality: Pakistan has historically prioritised military spending over economic reform. Despite persistent financial crises and international scrutiny, Pakistan's defence allocation remains among the highest as a share of GDP in the region, and continues to rise even during periods of economic contraction.
In FY2024–25, Islamabad allocated over Rs 2.1 trillion for defence, a figure that excludes military pensions and strategic projects often classified as 'contingency" or 'security" spending. By contrast, development expenditure, particularly in health, education, and job creation, has been slashed repeatedly to meet deficit targets.
This imbalance, critics argue, reflects not just poor economic management but deliberate statecraft, where national security is equated with military might, and where the military's strategic dominance skews budget priorities in its favour.
Such budgeting patterns — shielded from parliamentary scrutiny and often financed by international lenders — are what India fears may continue if IMF funds are disbursed without accountability mechanisms.
The Bottom Line: Is The IMF Enabling Terror?
So, is the IMF knowingly helping Pakistan fund attacks like Pahalgam?
No. But is it enabling a system where economic bailouts prop up a state that funds, protects, and deploys proxy terror networks?
India says yes — and it's done waiting for the world to catch up.
The debate isn't just about fiscal discipline anymore. If the money stabilises a regime that uses its freedom to fund bloodshed, then the global financial system, knowingly or not, becomes a stakeholder in terror.
As The May 9 Vote Looms
top videos
View all
The IMF must now choose between economic rescue and strategic responsibility. For India, the message is non-negotiable: Terror cannot be financed — not through state budgets, not through proxy fronts, and certainly not through IMF packages.
As the IMF board prepares for its vote, one question towers above the rest: Can the world afford to keep financing Pakistan, without knowing what else it might be financing along the way?
Get Latest Updates on Movies, Breaking News On India, World, Live Cricket Scores, And Stock Market Updates. Also Download the News18 App to stay updated!
tags :
News18 Explains Operation Sindoor Pahalgam attack Pakistan IMF bailout Pakistan terror financing
Location :
New Delhi, India, India
First Published:
May 07, 2025, 12:02 IST
News explainers Do IMF Bailouts Provide Pakistan Cover To Plan Terror Attacks Like Pahalgam?
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

India-UK trade pact: Tariff cut may not impact Scotch whisky retail prices
India-UK trade pact: Tariff cut may not impact Scotch whisky retail prices

Business Standard

time35 minutes ago

  • Business Standard

India-UK trade pact: Tariff cut may not impact Scotch whisky retail prices

The India-UK free trade agreement (FTA), under which tariffs on whisky and gin have been halved from 150 per cent to 75 per cent, which will further fall to 40 per cent in a decade's time, will not necessarily impact prices of Scotch whisky and gin for Indian consumers. According to a May 2025 report from the International Wine & Spirit Research (IWSR), blended Scotch grew the strongest of all the large whisky categories in India in 2024, with volumes rising by medium single digits and sales more than doubling since 2020. India is known to be a whisky market, with widespread national sales. However, while the data company's forecasts anticipated an upside from the FTA, it added that its impact should not be overestimated. 'While tariffs have been slashed from 150 per cent to 75 per cent, the impact on shelf prices is closer to 10 per cent and it is not a given that this will be passed on to consumers,' it had stated in the 2025 executive summary. The revised tariffs will apply to both bottled-in-origin (BIO) and bulk imports. Industry executives agree, stating that tariffs make up only up to 15 per cent of the final retail price, and with state taxes and costs for distribution and marketing, prices could be down by a mere 10 per cent. This may not be passed on to consumers, they said on the condition of anonymity. A senior commerce ministry official said that a major portion of whisky imports into India are used in the manufacture of blended whisky, whose production is set to rise due to cheaper raw material. 'We are foreseeing significant strategic and cost advantages from this development. We have estimated our Scotch requirements at over ₹250 crore in 2025-26 (FY26), and this treaty represents a substantial opportunity for value creation,' said Abhishek Khaitan, managing director at Radico Khaitan, one of the largest importers of Scotch whisky. Some liquor players also believe that the FTA will help consumers have access to premium Scotch whisky at reduced prices. 'The UK FTA is a positive move for the Scotch whisky segment, and it will enhance accessibility and affordability for Indian consumers. For import-driven portfolios like ours, this could fast-track category adoption, bring price parity closer to Indian Made Foreign Liquor (IMFL), and enable deeper reinvestment into consumer-building efforts,' said Debashish Shyam, cofounder and director, Ardent Alcobev, which sells Dram Bell blended Scotch whisky. However, the real benefit, Shyam added, will depend on how quickly the duty reductions are implemented, and whether the states align their tax structures accordingly. Spirits made up 51.2 per cent of the total beverage alcohol market in 2024, dominated by whisky. According to the data company, India consumed 258,750 under-9-litre cases of whisky in 2024, which is set to witness a compound annual growth rate (CAGR) of 3.1 per cent from 2024 to 2029. These included 8,509.60 cases of Scotch whisky, the company stated, adding that India is set to become the biggest Scotch market in the world by 2027.

Soccer players' union hits back at 'autocratic' FIFA and Infantino in fallout from Club World Cup
Soccer players' union hits back at 'autocratic' FIFA and Infantino in fallout from Club World Cup

Hindustan Times

time39 minutes ago

  • Hindustan Times

Soccer players' union hits back at 'autocratic' FIFA and Infantino in fallout from Club World Cup

The global soccer players' union hit back at FIFA and its president Gianni Infantino on Friday, saying their autocratic style of leadership was harming the rights of its members. HT Image 'Football needs responsible leadership, not emperors,' the FIFPRO network said after a meeting of 58 national player unions responded to FIFA pursuing its agenda with unofficial player representatives. 'It needs fewer autocratic monologues and more genuine, inclusive and transparent dialogue,' the union added. FIFA announced two weeks ago it reached a consensus on key issues after Infantino hosted a group of mostly non-recognized officials in New York ahead of the Club World Cup final. The latest rift between soccer's governing body and its players' unions flared while the European Commission in Brussels is considering a formal complaint against FIFA. It was filed by FIFPRO's European division and national leagues in Europe against FIFA's style of governance and decision-making. FIFA denounced what it called Friday the union leadership's 'increasingly divisive and contradictory tone" in pursuing a public relations battle "to preserve their own personal positions and interests." FIFPRO said Friday its core concerns included an overloaded global match calendar with too many games for elite players, lack of physical and mental recovery periods and extreme playing conditions. Players at the month-long Club World Cup in the United States reported feeling dizzy and unwell in the heat of daytime games played to appeal to worldwide TV audiences. The 63-game tournament backed by Saudi Arabian money was lucrative for clubs, especially in Europe, though FIFA added it to the schedule without formally consulting players. The tournament, FIFPRO said, was 'celebrated by President Infantino despite being held under conditions that were extreme and inappropriate for any human being, demonstrating a troubling insensitivity to human rights, even when it concerns elite athletes. 'FIFPRO reaffirmed its unwavering commitment to protecting the rights of men and women players — rights which are being seriously undermined by commercial policies imposed by its autocratic system of governance,' the Netherlands-based union said of FIFA. 'This is a model that puts the health of players at risk and sidelines those at the heart of the game,' FIFPRO said, adding it was 'unacceptable for an organization that claims global leadership to turn a blind eye to the basic needs of the players.' FIFA responded by challenging the union to publish its statutes and 'transparent annual accounts.' 'Let us be clear: you cannot preach transparency while operating in opacity,' the world soccer body said. FIFPRO has not had a formal working agreement with FIFA since the previous one expired in 2023. ___ AP soccer:

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store