The IMF loan to Pakistan should spark a debate on voting reform

A multilateral institution whose decisions reflect outdated economic realities cannot serve the interests of its members well

- AASHEERWAD DWIVEDI & ADITYA SINHA

The year 2019 saw the International Monetary Fund (IMF) approve a $6 billion bailout for Pakistan while the country was grey-listed by the Financial Action Task Force (FATF) for allowing terror financing. The IMF thus helped stabilize a government under worldwide observation for harbouring extremist groups. This, barely months after the Pulwama attack that claimed the lives of 40 Indian troops (an action linked to Pakistan-based Jaish-e-Mohammad). India insisted on affixing responsibility for the carnage, while the global financial system swung the other way, giving balance-of-payments measurements priority over the blood-stained reality of Pakistan's links with terror operations.

History has repeated itself. India's rare public abstention on last week's $2.4 billion IMF loan to Pakistan is part of a concerning trend whereby geopolitical convenience trumps moral clarity. It highlights a fundamental institutional flaw: the IMF continues to operate in accordance with the power hierarchy that emerged after World War II, with the result that legitimate Global South voices are frequently ignored and its conditionalities seem too selective. The Fund must alter its quotas and board seats and change its moral compass if it is to remain relevant in a multipolar age.

India's abstention, reportedly driven by concerns over Pakistan's misuse of IMF resources to potentially fund hostile activities, signals a loss of faith in the institution's ability to reflect the interests of those most affected by its decisions. But this is not just about India and Pakistan. It is about how the IMF continues to be governed by rules and quotas that reflect a post-World War II economic order.