In a matter of hours after the International Monetary Fund (IMF) had endorsed $1.1 billion to Pakistan under a Stand-By Arrangement (SBA) and a requested facility under the Resilience and Sustainability Facility (RSF) of $1.4 billion, hostilities broke out in South Asia. Missiles and drones brightened the pre-dawn horizon as Pakistan infringed on Indian airspace, provoking acrimonious responses.
This timing is no accident. It has always been part of a well-worn playbook. When Pakistan gets international money, especially from Western-backed institutions like the IMF, any government in Pakistan tends to turn that economic relief into geopolitical defiance,” says an Indian official.
The official further explained that economic crises may temporarily drive Pakistan to negotiate, but once funding is secured, its military regains confidence, leading to provocation. This pattern: financial aid followed by aggression has played out repeatedly, with the latest strikes impacting areas like Poonch, Rajouri, Uri, and Tangdhar.
Jammu and Kashmir Chief Minister Omar Abdullah was critical: “I fail to see how the ‘International Community’ believes that the present tension within the subcontinent will be eased when the IMF in effect remunerates Pakistan for all the ordnance which it is employing to annihilate Poonch, Rajouri, Uri, Tangdhar and so many other localities.”
India’s diplomats have also taken the initiative. Senior ambassadors and high commissioners in countries like the US and UK have put forth proof of Pakistan’s backing for terror organizations, such as images of Pakistani military officials standing next to globally sanctioned terrorists.
Paper Reform, Reality Military Budget
In a 2024 report, the IMF recognized Pakistan’s persistent vulnerabilities, observing: “Although the 2023–24 Stand-By Arrangement (SBA) helped restore economic stability, Pakistan’s vulnerabilities and structural issues are still significant. The new government elected following the February elections has continued to strengthen economic conditions and is launching a multi-year home-grown reform program to attain resilient and inclusive economic growth.”
In spite of the IMF’s insistence on fiscal reforms like reducing subsidies, increasing tax collection, and increasing energy tariffs…actual progress seems skewed. “The current fund insisted on tax reforms, cutting subsidies, and increasing energy prices. Pakistan complied on paper,” a government source said.
At the same time, defence expenditure is left untouched. Official budget papers disclose a planned 18% increase in defence expenditure, while social areas such as education, health, and welfare remain neglected. This reflects the state’s penchant for strategic bluster rather than real structural change.
A Pattern of Provocation
India has raised its concerns regarding the abuse of IMF funds at several international forums and even in board meetings. These alerts are based on a quarter-century history of post-bailout taunts. “From cross-border ceasefire violations to backing proxy players, Pakistan’s conduct has tended to harden in times after financial bailouts,” a veteran official well-versed in Pakistan’s 25 bailout packages history said.
Pakistani Premier Shehbaz Sharif, meanwhile, phrased the approval as a diplomatic victory and said, “hostile attempts to undermine the IMF program have failed.
But what keeps happening is a disquieting cycle: economic meltdown, global sympathy, aid, and back to regional brinkmanship. This trend poses serious questions for international financial institutions: Should aid be given without conditions that guarantee it won’t be used to finance aggression? Should there be tighter control on how defence and foreign policy are affected by bailout packages?
Until such is implemented, the world can keep seeing the contradiction of ‘missiles in pursuit of money’, a vicious cycle in which economic aid spurs new confrontation and not reform.
