The Executive Board of the International Monetary Fund (IMF) on Friday (9 May) has given a new loan of $1.4 billion (about ?12 thousand crores) to Pakistan under the Climate Resilience Loan Program. Along with this, the first review of the assistance of $7 billion (about ?60 thousand crores) received under the Extended Fund Facility (EFF) has also been approved. With this, Pakistan will get $1 billion (about ?8,542 crores) of the next installment. With this review approval, a total of $2 billion has been disbursed under the $7 billion assistance program. Pakistan will not get any amount immediately from the resilience loan. India said – Funding terrorism is dangerous In the IMF Executive Board meeting, India expressed concern over the funding being given to Pakistan and said that Pakistan uses it to spread terrorism across the border. India did not participate in the review, opposing the voting on it. India issued a statement saying- Continuous sponsorship of cross-border terrorism sends a dangerous message to the global community. It puts the reputation of funding agencies and donors at risk and makes a mockery of global values. Our concern is that funds coming from international financial institutions like the IMF can be misused for military and state-sponsored cross-border terrorist purposes. 5 big points of India’s opposition… While releasing funds to Pakistan, the IMF said in its statement, under the Climate Resilience Loan Program, Pakistan has made significant progress in stabilizing the economy and restoring confidence amid the challenging global environment through its efforts. Pakistan’s Prime Minister Shahbaz Sharif said, India’s efforts to harm the IMF program have failed. India had said- IMF should look deep within itself before giving aid to Pakistan. A day before the IMF meeting, on Thursday (May 8), India’s Foreign Secretary Vikram Misri had said that before giving relief to Pakistan, the IMF board should look deep within itself and keep the facts in mind. In the last three decades, IMF has given many big assistance to Pakistan. None of the programs run by it have been able to reach successful results. India said – You know what are the ways of taking decisions of IMF On Thursday, Misri had said that the Executive Director of India will present the country’s side in the IMF Board meeting on May 9. What will be the decision of the board is a different matter, you know what are the ways of taking decisions of IMF. But, I think that in the case of Pakistan, those people should know the facts, who easily open their treasury to save this country. First review of 7 billion dollar package Pakistan and IMF agreed on a 7 billion US dollar aid package for three years in July 2024, under which work is to be done to strengthen Pakistan economically through new programs. There are six reviews to be done in the 37-month EFF program (aid program) till the full amount is received. The next installment of about 1 billion dollars is to be released based on Pakistan’s performance. India had asked to reconsider, IMF refused India had objected to the loan of 1.3 billion dollars to be given to Pakistan and said that it should be reconsidered, because the money given to Pakistan can be used to promote terrorism. However, IMF refused to accept India’s request. What does the Executive Board of IMF do? IMF is an international organization, which helps countries financially, advises them and keeps an eye on their economy. The core team of this organization is the Executive Board. This team sees which country to give loan to, which policies to implement and how to work on the world economy. It has 24 members who are called Executive Directors. Each member represents a country or a group of countries. India has a separate (independent) representative. Who puts forward his point in IMF on behalf of India. Also, it sees that the policies of IMF do not harm the country. If the organization is going to give loan to any country, then give opinion on it on behalf of India. Can’t India stop the funds going to Pakistan on its own? Decisions in IMF are made on the basis of voting. But the value of votes is different. The value of Indian vote is about 7 times less than the American vote. Voting in IMF is based on quota. IMF has 191 member countries. Everyone has the right to one vote. But the value of votes is different. It is decided on the basis of the quota given to that country in IMF. That is, the higher the quota, the higher the value of the vote. The value of India’s vote is about 2.75%. How much quota a country will have in IMF is decided by its economic condition (such as GDP), foreign exchange reserves, trade and economic stability. America’s quota is the highest at 16.5%, so its vote in IMF is the most powerful like a veto. India’s is 2.75% while Pakistan’s is 0.43%. Voting right is given on two basis. What is SDR? Special Drawing Rights i.e. SDR is an international reserve asset created by IMF. It can be called ‘IMF’s International Currency’ or ‘Global Currency Unit’. It is used for financial transactions. However, it is not a real currency. No decision can be taken without America. 85% votes are required to take any decision in IMF. America has the highest 16.5% voting rights. In such a situation, if America does not vote, then the combined vote will be only 83.5% which is not enough for a majority. ————————— Read this news related to Pakistan’s economic condition… Today’s explainer: Pakistan has a debt of ?21.6 lakh crores, treasury empty; 11 thousand crores were to be received, India is going to stop that too. Every child of Pakistan is born with a debt of 86.5 thousand rupees on his head. Be it the import bill of oil and gas or everyday expenses like salary and subsidy, the entire economy of Pakistan is running on debt. But now India can vote against the loan to Pakistan from IMF. Read full report… Parameswaran Iyer will represent India in IMF board: Board will consider giving ? 11,000 crore aid to Pakistan, meeting on 9th May India has nominated Parameswaran Iyer as temporary director in the board of International Monetary Fund (IMF). Parameswaran will represent India in the IMF meeting to be held on 9th May. The meeting to be held on Friday is very important for India from diplomatic point of view. Read full news…
