Economic “surgical attack” on Pakistan! Islamic state starves funds as India may take this step at the IMF
The IMF Executive Committee will vote on Pakistan's loan proposals after the Pahalgam attack and escalation in India-Pakistan tensions on May 9. India's strategy has made Pakistan starve when it needs it most.
International Monetary Fund or International Monetary Fund
Will India stop Pakistan from getting $7 billion in loans from the International Monetary Fund (IMF)? Will New Delhi vote on Pakistan's loan proposal at the next meeting of the Executive Committee, scheduled for May 9? Traditionally, India has been abstaining from the power rather than posing a barrier in its own way so that the loan proposal can be approved. However, New Delhi is most likely to change its stance after the Pahalgam terrorist attack, with 26 people killed. The resistance front is considered the exterior of Pakistan's Lashkar-e-Taiba, but the lineup claims responsibility, although it later denied its role.
Everyone is following the IMF Executive Board Meeting
The IMF Executive Committee will be held in Washington, D.C. on Friday, amid the lowest point in India-Pakistan relations. When tensions between the two neighbors escalate to new heights as they look at each other in the eyes of each other through full military preparation. A small spark could ignite a full-scale war at any time. Last year, he accepted a $7 billion loan application from Pakistan.
How does India block loans to Pakistan?
After bringing too many conditions to the pressure on economic reform, the IMF agreed to discuss its topic. India's share is 2.36%, which is not enough to block or approve any proposals. However, New Delhi can seek help from others who have a larger stake. Although the U.S. owns 16.5% stake, Japan's voting share is 6.1%. On the other hand, Pakistan's “all-weather friend” China has a voting share of 6.09%. It is difficult to predict whether Washington and Tokyo will vote against the proposal, because they also have geopolitical and commercial interests.
India's next move: FATF?
This vote is also important because it may indicate India's strategy to return Pakistan to the gray list of the Financial Action Working Group (FATF). Founded in 1989, a 40-member team decided to combat money laundering and terrorist financing. Pakistan is on its gray list from 2022 to 2024. This is on the blacklist when it takes steps to get Kingpin Hafiz Saeed in custody. Once the FATF blacklist is placed on the blacklist, no country will receive any loan, advance or any type of financial aid from any multilateral institutions such as the IMF, the World Bank or the International Financial Company.
Analysts believe that while New Delhi may not be able to stop lending to Pakistan, it will certainly embarrass the Islamic state and accuse it of supporting and financing terrorism. Second, other countries may indicate not investing in Pakistan or providing economic or economic assistance. Pakistan has only enough diplomatic reserves left, and it only takes a few weeks to meet the requirements.
Pakistan's economy in chaos
Its currency has fallen to $281, with inflation hovering around 10-12%, and people are fighting for basic commodities such as flour and rice unemployment at 5.7%. Pakistan's international trade is terrible, with exports reaching US$35.8B in 2023, making it one of the world's 66 exporters. On the other hand, India's international transactions were 778.21 billion, with export value of USD 341.1 billion in 2023-24.
