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News18
10-05-2025
- Business
- News18
Why Is IMF Still Backing Pakistan? World Must Ask Tougher Questions
Last Updated: The underlying message? Strategic behaviour and peace are not prerequisites for financial support In May 2025, the International Monetary Fund disbursed another $2.4 billion to Pakistan —$1 billion under its $7 billion Extended Fund Facility (EFF) and $1.4 billion under the Resilience and Sustainability Facility (RSF). These disbursements were made despite Pakistan's recent escalation of hostilities along the Line of Control, a deadly cross-border attack that claimed civilian lives in Pahalgam, and amidst ominous nuclear sabre-rattling. Let that sink in. A country under scrutiny for cross-border aggression is receiving billions in international aid with minimal political or strategic conditions. Pakistan has received repeated IMF support since 1988, with over 20 loan programmes approved—often justified by its large population, fragile economy, and geostrategic location. The current $7 billion EFF was approved in 2024 after a previous short-term bailout ended, continuing a decades-long pattern of financial rescue despite limited structural reform. The IMF's rationale is that Pakistan has made measurable progress on economic reforms: a primary fiscal surplus, falling inflation, and rising reserves. These are milestones achieved on paper. But the IMF is not merely a bookkeeper—it is a geopolitical actor with influence. And it is this contradiction that demands urgent scrutiny. A Strategic Blind Spot India, for its part, registered a formal protest and abstained from the vote. It cited deep concerns that international funds might indirectly allow Pakistan to redirect domestic resources towards military buildup and proxy conflicts. This is not idle speculation: just a day after the loan was approved, Pakistan's Prime Minister called a meeting of the National Command Authority—the body that oversees the country's nuclear arsenal. The symbolism was chilling. And yet, despite India's concerns and the fresh blood on the ground, the IMF board proceeded. The underlying message? Strategic behaviour and peace are not prerequisites for financial support. The $1.4 billion under the RSF is meant to support climate adaptation. In theory, this is vital for a flood-prone nation like Pakistan. But in practice, climate funds cannot be disentangled from the geopolitical context in which they operate. If Pakistan is simultaneously investing in its nuclear posture, harbouring extremists, and provoking tensions, then its claim to be a responsible steward of climate aid comes into serious question. Would the same flexibility have been shown if a country in Eastern Europe had escalated tensions with NATO? Would IMF programmes have continued without pause? Who Backed Pakistan? The IMF has not disclosed how each Executive Director voted. But the board is not a mystery. It is dominated by the United States, the European Union, China, Japan, and Saudi Arabia—nations whose support or silence speaks volumes. China's geopolitical investment in Pakistan is well known. The West's argument for supporting Islamabad often boils down to avoiding economic collapse and encouraging reform. But reforms pursued in isolation from regional security concerns are inherently incomplete. It is one thing to keep a fragile state from defaulting. It is quite another to ignore the weaponisation of that fragility. The Big 'Why' Why does the international community, especially through financial institutions, continue to decouple economic metrics from political and security realities? Why are nations like India—who have borne the cost of terror, instability, and repeated provocations—expected to accept this pattern of bailouts without any accountability mechanism? And why is the IMF, an institution that claims to stand for stability and sustainability, not demanding basic guarantees of regional peace as a condition for such unprecedented support? It's Time to Connect the Dots The IMF may insist that its mandate is purely economic. But global economics does not exist in a vacuum. The money flows into a system, and that system—in Pakistan—is shaped by a security establishment with a long history of undermining regional peace. If we are serious about accountability, then financial support must come with real strings attached. If we are serious about sustainability, then stability—true political stability—must be part of the definition. Because right now, the world is sending a dangerous message: that you can provoke, escalate, even threaten nuclear force—and still receive the world's financial blessing. First Published:
Daily News Egypt
12-03-2025
- Business
- Daily News Egypt
IMF approves $2.5bn for Egypt, including $1.3bn for climate resilience
The International Monetary Fund (IMF) has approved a $2.5bn financing package for Egypt, with approximately half to be disbursed immediately, according to statements from the IMF and the Egyptian Ministries of Finance and Environment. Of the total, $1.2bn will be promptly disbursed as the latest tranche of Egypt's current $8bn programme, the IMF said in a statement on Tuesday. The move comes as the IMF urged further reforms for the country, which is seeking to emerge from its worst economic crisis in decades. The IMF also agreed to provide $1.3bn of new financing via a Resilience and Sustainability Facility (RST). These funds, according to the Egyptian ministries, are intended to support the implementation of Egypt's Climate Change Strategy 2050 and its Nationally Determined Contributions (NDC) plan for 2030. They will be disbursed in tranches and used to tackle challenges related to climate change. According to the ministries, the funding forms part of a package of structural reforms aimed at supporting the national strategy. The strategy was developed jointly by several state ministries and agencies, with participation from the Central Bank of Egypt, Mohamed Nasr, Egypt's Ambassador in Vienna and chief negotiator for financing, representing the Ministry of Foreign Affairs, and in coordination with a range of government bodies. The package of structural reforms to be implemented includes 10 reforms across four key areas: accelerating decarbonisation in Egypt; analysing financial risks related to climate change; enhancing climate-related data and risk management; building adaptive capacity; strengthening the financial sector's resilience to climate change and supporting climate finance; and identifying, measuring, and disclosing the impact of investment plans, programmes, and projects on national climate change goals. The Egyptian ministries said the agreement will strengthen Egypt's position ahead of the upcoming COP30 climate conference and underlines that climate change is a top priority on the political leadership's agenda.
Al-Ahram Weekly
06-02-2025
- Business
- Al-Ahram Weekly
IMF to unveil new loan package for Egypt - Economy
The IMF plans to unveil a new loan agreement with Egypt for approval by its board, the global lender's communications chief said Thursday, as the country looks to strengthen its economy. "A policy package of reforms will be considered by the Fund's executive board, along with the fourth review of Egypt's program," International Monetary Fund communications director Julie Kozack told reporters in Washington. Kozack said the new planned loan agreement would take the form of a Resilience and Sustainability Facility, or RSF, designed in part to help countries tackling climate change, adding that she could not yet confirm how large it will be. Last year, the IMF expanded its existing loan package from $3 billion to $8 billion to help Egypt manage its economic challenges amid regional instability unleashed by the war in Gaza. A draft agreement was reached on a review of Egypt's existing loan program back in December which should unlock an additional $1.2 billion to help the Egyptian economy as it battles a series of headwinds. The executive board's approval is largely a rubber-stamping exercise, with disagreements between stakeholders usually ironed out before the vote. Repeated attacks on Red Sea shipping by Yemen's Huthi rebels in support of Palestinians in Gaza caused Egypt's revenues from the Suez Canal - a key foreign currency earner -- to plummet. Short link:
