Bailout and Business

IMF has given bailout package to Pakistan for 24th time which amounts to $ 2.4 Billion.

International Monetary Fund (IMF) having its Headquarters at Washington D.C. is a Multilateral Institution calling itself as an International Financial Institution was established in 1944 at the end of Second World War as a Financial Agency of United Nations which aims at maintaining Global Financial Stability.

191 Countries are member of IMF and the Financial contribution of the Member country to IMF decides its Voting power in making any decision. America has 17 % of voting power in IMF due to its hefty contribution of around $ 117 Billion USD.

IMF is not a Bank or any Financial organization for lending funds rather it is a strategic arm of America’s foreign policy. IMF bailouts were extensively used during Cold War and Post Cold War period as a tool to gain control over the countries in which the USA and the West had interest due to its strategic geopolitical location or natural resources.

Some if the examples of IMF interventions are as follows -

Zaire and Angola Crisis – Zaire and Angola both located in the Continent of Africa were neighbors just like India and Pakistan. Zaire which is now known as Democratic Republic of Congo was under dictatorship of Mobutu Sese Seko, commonly known as Mobutu. During the cold war period IMF gave around US$3.7 billion loans to Zaire for undertaking “reforms”.  But the reality was that Angola was USSR allay. USA justified IMF funding to Zaire to save it from falling into communist camp as its neighbour Angola. Under garb of reforms and development of Zaire, USA through its companies hijacked the natural resources of Cobalt and Copper and exploited it which is used for industrial purposes, defense equipment, batteries, high power magnets and etc.

Economic Crisis in Argentina – Argentina had faced a huge Economic collapse during 1998-2001, but US Hedge Funds bought the debt of Argentina and IMF funded Argentina and now Argentina is often called as Backyard economy of USA.

Ukraine Crisis - Ukraine was a part of USSR till 1992, USA has created a market for its defense sale in Ukraine through Russo-Ukraine war. IMF has given $15.6 Billion fund facility which Ukraine has used to build itself and to support its war efforts i.e., to buy weapons. At the end recently Ukraine is pushed into signing a Mineral Deal with USA. The USA established United States-Ukraine Reconstruction Investment Fund while the Ukraine had to pay the cost of the rare earth elements and critical minerals like ‘titanium, lithium and uranium’ to USA via a Mineral Deal.

Greece Eurozone crisis – Greece started facing Eurozone crisis / sovereign debt crisis during 2009-10. Meaning Greece had an economic failure due to global Recession of 2009 and inflation. As a result, Greece was left with insufficient foreign exchange in Euros to pay for its debt. Greece is a part of European Union; EU was active in resolving the Greek’s crisis. Other EU zone countries like Portugal, Italy, Spain too were suffering through the Eurozone Crisis. But IMF intervened and only funded Greece to revive its economy and resolve the crisis. Why so? Because Greece is strategically located in the Mediterranean Sea, through IMF funding USA got a gateway into Greece and gain a geopolitical influence over the Mediterranean Sea with nexus of Greece and Israel.

Arguments given in favor of Funding Pakistan through IMF –

1. Pakistan is a Nuclear Power country with a heavy presence of terrorist organizations. If economy of Pakistan collapses completely then Pakistan will go into unruly anarchy the Army may build nexus with the Terrorist organizations and enter into black marketing the nuclear warheads.

2. There is huge number of unemployed Pakistani youth, if Pakistan as a State will collapse, then this unemployed youth will get recruited by the Terrorist organizations like ISI, LeT, Jaish-e-Mohammad, Al-Qaeda etc. which will ultimately destabilize the entire region.

3. USA has maintained an intelligence gathering pipeline in Central Asia, China, Arabian sea through Pakistan. If Pakistan fails then this pipeline will be lost for ever.

4. If Pakistan will fail then the Terrorist organizations already present in Pakistan will take control of the State and they will continuously attack India which will result into continuous clash between India and Pakistan. India’s economic and political stability will suffer and ultimately the American and European Multinational companies having their stakes in Indian market will suffer.

5. If IMF will not fund Pakistan, then China will get open gate to increase its presence in Pakistan and become a dominant player in Asia.

• To conclude – IMF funding to Pakistan rejuvenates the vicious cycle of Terrorism and War against Terror. As Pakistan is Funded its leadership is stabilized and gets a sense of economic and political security. Pakistan’s army gets economic freedom; terrorist organizations get funded to continue its activities against India. As a response to the rising terror activities India needs to modernize its defense capabilities, procure more defense equipment to build strong defense infrastructure. And here again the USA enters in to do its business of selling the Defense equipment to India. Indian economy is diverted from building civilian infrastructure towards building defense infrastructure. Problem will never be solved but will be only mitigated and USA maintains its business, geopolitical dominance and global hegemony.

A way forward – India has to gather a moral and geopolitical strength to “call spade a spade” to call out the West and USA internationally and shame them for being into this dirty business.