The Executive Board of the IMF on Thursday night voted to approve $2.4 billion of funding to Pakistan across two programmes. File
| Photo Credit: Reuters
The Executive Board of the International Monetary Fund (IMF) on Thursday (May 8, 2025) night voted to approve $2.4 billion of funding to Pakistan across two programmes. India abstained from the vote, citing Pakistan’s “poor track record”, the possibility that such funding could be used for state-sponsored terrorism and the fact that the IMF is bound by “procedural and technical formalities”.
The voting rules of the Executive Board are such that countries cannot vote against a decision to provide loans to a country; they can only abstain. That is, a ‘no’ vote is not allowed.
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Of the $2.4 billion, $1 billion is part of a larger $7 billion Extended Fund Facility (EFF) extended to Pakistan in September 2025. The additional $1.4 billion is under a Resilience and Sustainability Facility (RSF), and marks the 25th time Pakistan has received a loan from the IMF since 1948.
According to government sources, while India laid its grievances before the Executive Board, it was “hamstrung” by the fact that there is no provision in the voting system for a “no” vote.
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“You can either vote in favour of granting a loan, or you can abstain,” the official told The Hindu. “In such a scenario, India abstained, and the Board took note of that. But given the rigid structures and rules of the IMF, the Executive Board had to go ahead and approve the loan, despite our reservations and the ongoing conflict.”
Since there can be no negative votes, the vote by the Executive Board is unanimous.
Further, the voting system incorporates an imbalance. That is, each country does not have an equal vote. For example, the vote share of the India, Bangladesh, Bhutan and Sri Lanka grouping is only 3.05%, whereas the US itself has a 16.49% share, Japan 6.14%, and China 6.08%.
Germany, France, and the UK each also have higher vote shares than the grouping India is in.
The IMF, in a statement, noted that Pakistan’s policy efforts under the EFF have so far delivered “significant progress in stabilising the economy” and that the economy’s fiscal performance has been “strong”, allowing it to remain on track to meeting the GDP target of 2.1% by the end of this year.
“The RSF will support the authorities’ efforts to reduce vulnerabilities to natural disasters and to build economic and climate resilience,” the statement added.
India had on Friday evening issued a statement outlining its reservations about additional IMF funding to Pakistan.
“As an active and responsible member country, India raised concerns over the efficacy of IMF programs in case of Pakistan given its poor track record, and also on the possibility of misuse of debt financing funds for state sponsored cross border terrorism,” the Ministry of Finance (MoF) said.
Published – May 10, 2025 11:09 am IST
