India warns IMF against fresh bailout for Pakistan

April 20, 2019

India and some other nations have cautioned the International Monetary Fund (IMF) about fresh bailout for Pakistan at a time when it is under the Financial Action Task Force’s (FATF) scanner for its serious failure to crack down on terror funding.

During recent meetings in Washington, Indian officials are learnt to have warned of possible embarrassment for the multilateral agency as they made the point that Pakistan was already ‘grey listed’ and faced a high probability of being in the ‘black list’ which will severely restrict its financial transactions with other nations.

The word of caution, as India hinted at IMF funds being at risk, came ahead of next month’s peer review of Pakistan at FATF, sources said. Indian officials had attended the annual meetings of IMF and the World Bank with FATF ministerial meet also coinciding with it.

FATF is a global agency tasked with prescribing norms to counter money laundering and terror funding and the recent ministerial meeting decided to extend its ambit to check proliferation of weapons of mass destruction as well.

Pakistan is on the FATF ‘grey list’ as it is seen to have failed to take adequate steps to check terror funding and is seen as non-compliant with its international commitments. It will be subjected to review on 25 parameters in a peer review process comprising representatives from other member countries. Pakistan has been critical of FATF action, saying it was driven by India’s lobbying.

At the same time, India’s neighbour, which is seen to be harbouring a range of terrorists such as Jaish-e-Mohammed chief Masood Azhar, is seeking an urgent $8-12 billion IMF assistance to help it tide over its latest current account crisis, with the deficit widening six-fold to over $18 billion in the last three years. If the loan proposal goes through, it will be Pakistan’s 22nd loan from the IMF.

Last week, Pakistani finance minister Asad Umar, who was virtually forced to step down on Thursday, had said Pakistan had almost reached an agreement with the IMF. But recent news reports suggested the global agency has concerns related to the China-Pakistan Economic Corridor and its possible impact on the IMF programme. On Monday, Umar had told reporters that the Pakistani government had dispatched the compliance report to FATF and an IMF team would visit the country later this month.

Source: DefenceNews

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