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

‘Focus on big issues': Rajnath Singh starts Lok Sabha debate on Op Sindoor with list of questions Oppn should have asked
‘Focus on big issues': Rajnath Singh starts Lok Sabha debate on Op Sindoor with list of questions Oppn should have asked

Indian Express

time8 minutes ago

  • Indian Express

‘Focus on big issues': Rajnath Singh starts Lok Sabha debate on Op Sindoor with list of questions Oppn should have asked

Defence Minister Rajnath Singh told Lok Sabha Monday that India had fulfilled all its objectives in Operation Sindoor, agreed to a ceasefire when Pakistan requested it without any pressure, and added that the Opposition was not asking the right questions when it sought to know how many planes were shot down. He was speaking to initiate the 16-hour debate in Parliament on Operation Sindoor. He underlined that Operation Sindoor had been halted and not ended, and India would once again give a befitting reply if Pakistan sponsored any other terror attack, as a 'new Lakshman Rekha had been drawn'. He added that India would not accept any nuclear blackmail. 'In any exam, the result matters. We should see whether a student is getting good marks in an exam and not focus on whether his pencil was broken or pen was lost,' Rajnath said, in a dig at questions by the Opposition regarding losses to the Indian Air Force, amid applause from ruling party MPs. 'The Opposition asks about planes shot down. Their question does not represent India's sentiments. They have not yet asked how many Pak planes were shot down. They should ask: did India destroy terror bases? Yes. Was Operation Sindoor successful? Yes. Were the masters of terrorists who wiped off Sindoor from the foreheads of our sisters destroyed? Yes. Did our soldiers face any losses? No,' Rajnath said, listing out the questions he felt the Opposition should have asked. 'Focus on big things, not comparatively small ones; else we lose focus on big issues and the honour of soldiers.' He added, 'We asked in 1962 why another country captured part of our territory. We asked why we lost. We did not ask how many machine guns were damaged. We asked about territory, not equipment. In 1971, Atal Bihari Vajpayee praised the leadership of that time. We did not ask how many Indian planes fell or equipment got damaged in the process of teaching the enemy a lesson.' 'Aim not to capture land, but destroy terror nurseries' Rajnath explained the ceasefire after four days of hostility, saying, 'Operation Sindoor was halted because we had fulfilled our objectives. To say it was done under any pressure is wrong. The aim was not to capture territory but to destroy their terror nurseries. The aim was not to go to war… Pakistan accepted defeat and requested that hostilities be stopped… We accepted with a caveat. If Pakistan attempts any misadventure, we will again begin this operation.' The defence minister said India had always wanted peace with neighbours, as it is part of the civilisational values of the country. He recalled Vajpayee's attempts at peace, and then the Kargil War when Pakistan did not understand the language of peace. He added that Prime Minister Narendra Modi also started with attempts at peace and also visited Nawaz Sharif, but since Pakistan did not understand the language of peace, India undertook a surgical strike in 2016, an air strike in 2019, and Operation Sindoor in 2025. Rajnath expressed disappointment that the UPA government did not do any such thing after the Mumbai terror attack of 2008. Under the Modi government, he added, 'two-day dossiers have been replaced by decisive actions.' He likened the policy of the Modi government to the strategy of Lord Ram and Lord Krishna. 'We haven't occupied any territory. We also know that one should fight only equals. Lions should not kill frogs – the message it sends is not good. Our army is a lion. Pakistan is nowhere close to us in size or strength. What competition do we have with them? They are reliant on others for aid. Our strategy is against terrorism emanating from there,' Rajnath asserted. 'Our policy based on strategy of Ram, Krishna' 'We have learnt from Krishna that one can forgive Shishupala 100 times but the Sudarshan Chakra must be used to protect dharma. Ab humne sudarshan chakra utha liya hai (Now we have decided to wield the Sudarshan Chakra). Our policy is based on the strategy of Ram and Krishna, which teaches both dhairya (patience) and shourya (valour). Pakistan did not understand what we were saying; so, we will answer them in this way,' he said. 'Our stand is clear that terror and talks cannot co-exist. A country that has no democracy, sponsors terror and hates India cannot be engaged in dialogue. Blood and talks do not go together,' Rajnath added, reiterating what PM Modi had said after the ceasefire. 'Pak-sponsored terrorism is not random madness; there is a method in this madness. It is a toolkit against every civilised code of conduct. Our fight against Pakistan is the contest between civilisation and barbarity.' He recalled that PM Modi got the world to condemn the Pahalgam terror attack, adding that he (Rajnath) refused to sign a joint statement at the Shanghai Cooperation Organisation (SCO) meet that sought to dilute India's position on terror. Rajnath rued that the UPA government could not make the Mumbai terror attack a global issue, and also decided not to launch an attack on Pakistan's terror havens after it. Underlining that multi-party delegations sent across the world after Operation Sindoor did great work, Rajnath said, 'During the operation, all political parties cooperated with the government, and we thank them.' He said Indian forces accomplished the attack on terror hubs in Pakistan in just 22 minutes, and saluted the defence forces for their valour and dedication.

RSB Group Celebrates 3rd Edition of EK Pahal Annual Day - Championing Purpose-Driven Change Through Collective Action
RSB Group Celebrates 3rd Edition of EK Pahal Annual Day - Championing Purpose-Driven Change Through Collective Action

Business Standard

time11 minutes ago

  • Business Standard

RSB Group Celebrates 3rd Edition of EK Pahal Annual Day - Championing Purpose-Driven Change Through Collective Action

NewsVoir Jamshedpur (Jharkhand) [India], July 28: EK Pahal, the brainchild of Ms. Nirmala Behera was launched three years ago and has since grown into a transformative movement within RSB. Built on four pillars - Health & Hygiene, Learning & Development, Safety, and Community Service - the initiative has empowered employees to drive meaningful impact both within the organization and in the communities they serve. The evening featured inspiring speeches by esteemed guests and leaders along with vibrant performances by employees, reflecting creativity, emotion, and strong storytelling. The EK Pahal Annual Day not only celebrated past achievements but also set the stage for future impact, with the announcement of newly elected pillar leaders inspired to take the baton forward. With every edition, RSB reaffirms its commitment to fostering an inclusive and purpose-driven workplace culture -- where every step counts, and every dream matters. Nirmala Behera, Executive Director, Group HR, RSB Group expressed heartfelt gratitude and pride in the collective efforts of the teams, "This year's theme is a reminder of how a single step can ignite a chain of dreams. What began as a small internal initiative has today become a powerful testimony of passion, purpose, and progress." The efforts and dedication of all pillar leaders were applauded for their passion, innovation, and collaborative spirit, which shaped the year's success. Their collective contributions brought each pillar to life, creating a meaningful impact across the organization and the community. Special recognition was extended to Bindiya Khandka and Monika Paira from the Community Service Initiative Pillar for their exceptional work, and other pillar leaders Sunita Bhattamishra, Arundhati Pandey and Bhawna Joshi were also recognised for their remarkable contribution. Addressing the audience Dr. Poornima Dore, Economist, Author, and Impact Leader and Founder & CEO-Dorian Scale, said "Staying in the game is the biggest challenge--and the biggest strength. As India's next wave of growth emerges from Tier 2 and 3 cities, women must believe in themselves, support one another, and stay in the game to lead this change. She also emphasised three important aspects for any woman to succeed - Access to Skill, Technology and Finance." Purnima Mahato, Padma Shri Awardee & Indian Archery Legend, said, "Pursuing a career in sports, especially in a male-dominated field, was never easy. But with focus and inner strength, women can overcome challenges, lead by example, and succeed. Be your own role model and keep going." Kumari Swarnalata Dalai, Youngest Female Mountaineer from Odisha to Summit Everest, said, "From a small town in Odisha to the peak of Mount Everest, my journey was all about finding purpose through struggle. I faced many challenges, but I kept dreaming--and that made all the difference. Until we dream, we cannot succeed. Struggles will always be part of the climb." "As we move forward, let us continue to dream big, work harder, and reach farther. May EK Pahal continue to grow in strength, scale, and soul -- becoming a model for many to follow," concludes Nirmala Behera. RSB Global is a leading global engineering company specialising in designing and manufacturing aggregates and systems for the automotive, construction, and off-highway equipment sectors. Founded in 1973, RSB has grown into a trusted partner for global OEMs and continues to expand its global presence with 16 manufacturing facilities across India and Mexico. The company is driven by a commitment to innovation, quality, and customer satisfaction.

Nimisha Priya's 13-year-old daughter and husband appeal to Yemeni government for release of Indian nurse
Nimisha Priya's 13-year-old daughter and husband appeal to Yemeni government for release of Indian nurse

Mint

time11 minutes ago

  • Mint

Nimisha Priya's 13-year-old daughter and husband appeal to Yemeni government for release of Indian nurse

Indian nurse Nimisha Priya's 13-year-old daughter, Mishel, and her husband have appealed to the Yemeni government for the woman's release. Priya was sentenced to death in Yemen. Mishel has travelled to Yemen to join Global Peace Initiative founder and evangelist Dr KA Paul in appealing to the Yemeni government for Priya's release. Priya, originally from the Palakkad district of Kerala, was convicted of murdering her Yemeni business partner, Talal Abdo Mahdi, in 2017. She was sentenced to death in 2020, and her final appeal was rejected in 2023. According to Yemeni court documents, Priya, in July 2017, allegedly drugged and killed Mahdi. She is currently lodged in a prison in Yemen's capital, Sanaa. Earlier this month, India had said that it was in touch with Yemeni authorities as well as certain friendly nations as part of efforts to reach a 'mutually agreeable solution' in the case relating to Priya. External Affairs Ministry spokesperson Randhir Jaiswal said the Indian government was making concerted efforts to give Priya's family more time to reach an understanding with Talal Abdo Mahdi's family. The MEA had appointed a lawyer to assist Priya's family in navigating the complex legal process in Yemen. This includes exploring options for clemency or pardon under Sharia law. Under Sharia law, payment of blood money to the family of the deceased is permissible. 'This is a very sensitive matter, and the government of India has been offering all possible assistance in the case. We have provided legal assistance and also appointed a lawyer to assist the family. We have also arranged for regular consular visits by her family, and we are in touch with the local authorities, as well as the family members, to resolve this issue. This included concerted efforts in the recent few days to seek more time for the family of Ms Nimisha Priya to reach a mutually agreeable solution with the other party. The local authorities in Yemen have postponed carrying out her sentence that was scheduled for 16 July,' said Jaiswal. Last week, evangelist and Founder of Global Peace Initiative Dr KA Paul claimed in a video message from Sanaa in Yemen that Nimisha Priya's death sentence has been cancelled after days and nights of extensive efforts by Yemeni and Indian leaders. In the video message, Dr Paul thanked Yemeni leaders for their 'powerful and prayerful efforts'. He said: 'I want to thank all the leaders who are involved in making this a great success, that Nimisha Priya's death is cancelled. By God's grace, she will be released and taken to India. I want to thank Prime Minister Modi ji for preparing to send your diplomats... and take Nimisha professionally, safely.'

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