Former US official criticises IMF's $1 billion loan to Pakistan amid tensions

Former Pentagon official Michael Rubin has strongly criticised the recent $1 billion loan granted to Pakistan by the International Monetary Fund (IMF).

He called it a misuse of resources and a sign of disrespect toward the United States, particularly President Donald Trump.

The IMF's decision came last week, as part of its Extended Fund Facility (EFF) for Pakistan. The disbursement follows the IMF Executive Board's first review of Pakistan’s economic reforms, taking the total loan amount released under the current programme to approximately $2.1 billion.

However, the timing of the loan has sparked controversy, coinciding with heightened tensions between India and Pakistan.

The Pakistani military had just launched drones and missiles targeting western Indian cities and military installations when the IMF approved the latest disbursement.

Rubin, a noted global security analyst, argued in an American publication that giving financial support to what he described as a “terror-addled, pro-China regime” under such conditions undermines US efforts to defuse conflict in South Asia. He asserted that the IMF's actions effectively challenge the authority of President Trump.

“The IMF’s decision to release funds at such a volatile moment isn’t just about Pakistan; it’s a direct affront to Trump’s leadership,” Rubin stated. He urged the administration to reconsider its contributions to international institutions like the IMF, to which the US commits over $150 billion through quota and supplemental funds.

Referencing an executive order signed by Trump in February requiring a full review of US involvement in international organisations, Rubin called on Secretary of State Marco Rubio to act swiftly and evaluate US participation in the IMF. He claimed that ending funding could potentially save the US over $100 billion and curb global misuse of such financial support.

Rubin also alleged that the IMF’s loans are indirectly benefiting China, given Pakistan’s economic dependency on Beijing through large-scale projects like the China-Pakistan Economic Corridor (CPEC). "Pakistan has essentially become a client state of China, with Gwadar port as a cornerstone in Beijing's regional strategy,” he remarked.

Meanwhile, India expressed its concerns over the IMF’s continued financial assistance to Pakistan, citing the country’s consistent failure to meet reform targets. The Indian Finance Ministry noted that Pakistan has received IMF assistance in 28 of the last 35 years, with four separate programs launched since 2019 alone.

India chose to abstain from the vote on the latest loan, questioning whether the IMF’s program designs or Pakistan’s compliance with them were to blame for repeated bailouts. The ministry also highlighted the deep involvement of Pakistan’s military in economic matters as a major obstacle to reform and stability.

These developments come in the wake of serious military confrontations between the two nuclear-armed neighbours.

Tensions escalated after a deadly terror attack in Jammu and Kashmir’s Pahalgam on April 22 that killed 26 people. Following the attack, India launched "Operation Sindoor" to target terror camps linked to groups like Lashkar-e-Taiba, Jaish-e-Mohammad, and Hizbul Mujahideen.

Pakistan retaliated with missile and drone strikes, which were intercepted by Indian defenses. In response, India carried out targeted strikes on Pakistani military installations. A ceasefire was brokered on May 10, bringing a temporary halt to the four-day escalation.