IMF's Pakistan loan: When financial aid becomes ammunition across the border

 The IMF Executive Board's approval on May 9 to the release of the first $1 billion of the $7 billion Extended Fund Facility for Pakistan has a dystopian air to it as far as India is concerned. To be frank, it conjures up the image of a patient in an ICU receiving a lifesaving blood transfusion while holding a pistol in his hands.

From the eyes of a next door neighbour that has endured Pakistani State sponsored terrorism this is not just bad timing but also bad policy. The argument that mandates of international organisations are cast in stone, and blind to real world realities is plain wrong. From the FATF to the WHO, and from the G7 to the BRICS, political and security considerations have played central roles in decision making. While the IMF seemingly has its own timelines and inexorable logic, so do some others in Pakistan.

What is apparent since the launch of "Operation Sindoor" is that among the various complex and copybook conditionalities imposed by the IMF on Pakistan, its defence spending and support to terrorism are not one of them. This is a pity. The most egregious actor in Pakistan is getting away scot-free. The Pakistan Army, the state within a state, does not countenance limits to its freedoms of action. It is leading the people of Pakistan down an abyss, leaving the civil leadership, in this case the hapless Sharif brothers, to the mercy of international creditors.

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The IMF approval is of course an unpleasant reminder of Pakistan's economic crisis.

National power normally rides on economic power. Not in this case. Pakistan's most recent economic meltdown coincides with the beginning of Imran Khan's term as Prime Minister in 2018. Its currency today is one third the value of the Indian rupee.

Many of its other indicators such as GDP, foreign exchange reserves, saving and investment rates, tax collections and debt are worse than those of Bangladesh. Pakistan is surviving on continuous IMF arrangements since 2019, and more than twenty others before that. A conflict of the kind its Army seems to be choosing with India is a death wish.

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Yet, Pakistan lives a charmed life. There are not many examples in the world of countries who wear their nuclear weapons on their sleeves and brand ..