India's Defence Minister Rajnath Singh. - Photo: India's Press Information Bureau/Handout via Reuters
SRINAGAR, (India): Indian Defence Minister Rajnath Singh said Friday (May 16) the International Monetary Fund (IMF) should reconsider a one billion dollar loan to Pakistan alleging it was "funding terror", a move denounced by Islamabad as proof of New Delhi's desperation.
India and Pakistan last week clashed in the worst military violence in decades, killing around 70 people before agreeing a ceasefire that began Saturday.
The confrontations were sparked by an attack on tourists by gunmen in Indian-administered Kashmir last month that New Delhi accused Islamabad of backing -- a charge it denies.
"I believe a big portion of the $1 billion coming from IMF will be used for funding terror infrastructure," Singh told troops at an air force base in western India.
"I believe any economic assistance to Pakistan is nothing less than funding terror."
Despite India's objections, the IMF last week approved a loan programme review for Pakistan, unlocking a $1 billion payment which the state bank said has already been received.
A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund.
India -- which also represents Bhutan, Sri Lanka, and Bangladesh on the IMF board -- abstained from the review vote with a statement from its finance ministry stating, "concerns over the efficacy of IMF programmes in case of Pakistan given its poor track record".
"India was the lone country which tried to stop it and it failed. It again reflects Indian frustration. Trying to criticise an institution like IMF speaks about this desperation," Pakistan's foreign ministry spokesman Shafqat Ali Khan told reporters.
Pakistan came to the brink of default in 2023, as a political crisis compounded an economic downturn and drove the nation's debt burden to terminal levels before being saved by a $7 billion bailout from the IMF which sparked further crucial loans from friendly nations.
- Removed from watchlist -
Pakistan, which has long battled militancy within its borders, has faced scrutiny over its ability to combat illicit financing, including to militant organisations and in 2022 was put on an international money-laundering watchlist.
However, the Financial Action Task Force removed Pakistan from it so-called grey-list in 2022 after "significant progress" which included charges being filed against suspected militants accused of being involved in the 2008 attacks in India's Mumbai.
Singh claimed it was "clear that in Pakistan, terrorism and their government are hand in glove with each other.
"In this situation there is a possibility that their nuclear weapons could get their way into the hands of terrorists. This is a danger not just for Pakistan but the entire world," he said.
Singh on Thursday called for Pakistan's nuclear arsenal to be put under the surveillance of the UN's atomic energy agency, with Islamabad firing back that the international community should investigate a nuclear "black market" in India.
Britain's Foreign Secretary David Lammy met with his Pakistani counterpart Ishaq Dar in Islamabad on Friday, where the two discussed the ceasefire, according to a statement from Pakistan's foreign ministry.
Lammy also contacted his Indian counterpart on Thursday, the UK foreign office said, adding he "will look to travel to New Delhi soon."
Prime Minister Shehbaz Sharif, who has warned that Pakistan's armed forces are ready to counter any Indian aggression, called Friday evening for diplomatic solutions.
"We have to sit down at the table like peaceful neighbours and settle our outstanding issues, including Jammu and Kashmir," Sharif said.
The disputed Muslim-majority region of Kashmir has been at the heart of several wars between the two neighbours, who administer separate portions of the divided territory.
Militants stepped up operations on the Indian side of Kashmir from 2019, when Prime Minister Narendra Modi's Hindu nationalist government revoked the region's limited autonomy and imposed direct rule from New Delhi. - AFP
