No Ceasefire.....

Pakistan has been a recipient of IMF support since the late 1950s. Over the decades, the IMF has provided 23 bailout packages, making Pakistan one of the largest borrowers in IMF history. The latest development came recently, with the IMF approving $1.7 billion in funding over 37 months under the Extended Fund Facility (EFF). Additionally, $1.4 billion was granted under the IMF’s Resilience and Sustainability Trust (RST).

While Pakistan’s economic indicators remain fragile — with an external debt nearing $80 billion, high inflation, and depleting forex reserves — the IMF continues to extend a financial lifeline. Why?

🌐 Why the IMF Keeps Funding Pakistan

1. Geopolitical Stability Over Financial Metrics The IMF is not just a financial institution — it's also a geopolitical tool. Many of its major decisions are influenced by board members like the U.S., EU, China, and Gulf countries, who see Pakistan’s stability as a strategic necessity. A financial collapse in Pakistan could lead to:

2. China, Saudi, and U.S. Pressure Behind Closed Doors Pakistan is a key partner in China's Belt and Road Initiative (BRI). It's also a close ally of Gulf countries. These powers exert soft influence over IMF decisions. The U.S. uses IMF tools to balance China’s rising influence and avoid a complete economic collapse in South Asia.

3. Humanitarian & Political Optics Denying aid to a struggling, populous, and strategically located country like Pakistan would tarnish the IMF's reputation. The institution also considers the social cost of economic collapse — from food insecurity to mass unemployment — which could trigger political instability and extremism.

4. Backroom Diplomacy Among Global Powers In recent years, especially post-COVID and amid rising wars (Ukraine, Gaza, and Taiwan tensions), the global community is taking a cooperative approach to contain regional crises — even if the country involved has a controversial record. Pakistan’s situation fits this mold.

🇮🇳 Why India Could Not Stop the IMF Funding to Pakistan

India has consistently opposed IMF bailouts to Pakistan, citing:

• Terror financing links

• Cross-border infiltration and attacks

• Pakistan’s unsustainable debt and lack of reforms

Yet, India has no veto power in the IMF and holds only about 2.75% voting power, compared to the U.S. (~16.5%), EU (~27% combined), and China (~6.1%).

While India raised concerns, it failed to provide strong documentation linking IMF aid directly to misuse in terrorism-related activities. Moreover, many Western and Middle Eastern powers do not want to be seen as aligning with India's aggressive regional stance, especially given India’s own internal issues in Kashmir and border tensions with China.

💣 The India–Pakistan War 2025

What Happened?

In late March 2025, after repeated ceasefire violations, diplomatic breakdowns, and suspected proxy attacks, India launched limited military operations across the LOC (Line of Control). This escalated fears of a full-blown war.

Why It Ended Quickly:

1. International Diplomatic Pressure Within 10 days, the U.S., China, Russia, and Gulf allies forced both nations to cease hostilities. Washington and Riyadh reportedly warned of economic and strategic consequences.

2. Mutual Economic Constraints India, despite being the world’s 3rd largest economy by PPP, is deeply invested in global supply chains, energy imports, and capital markets. War would have damaged investor confidence. Pakistan was already on the brink of default. Both economies couldn't afford a drawn-out conflict.

3. Nuclear Deterrence Still Works The nuclear factor remains a major deterrent. While both nations maintained aggressive posturing, the fear of escalation kept both militaries from crossing red lines.

4. China’s Mediating Role China, a key trade partner to both, played a backchannel role in mediation, given its stakes in CPEC (China-Pakistan Economic Corridor) and border tensions with India.

even after ceasefire again pakistan started firing..........this is not going towards full fledged war

Bottom Line: IMF Aid to Pakistan Is About More Than Money

The IMF’s continued support of Pakistan is not a reward for good governance — it's a strategic insurance policy for the world. As long as Pakistan is seen as too nuclear, too fragile, and too big to fail, IMF aid will keep flowing — despite objections from countries like India.

India’s concerns, while valid, are not powerful enough in the current global order to override the collective security-first approach adopted by the IMF board and major donor nations.

Key Takeaways:

• IMF aid to Pakistan is driven by geopolitics, not just economics.

• India lacks institutional power and alliances to block IMF decisions.

• The 2025 Indo-Pak war ended due to global intervention, economics, and nuclear risk.

• Until global priorities change, Pakistan will likely continue receiving international bailouts.