News Brief
After IMF Loan, ADB Approves $800 Million For Pakistan Amid India’s Objections Over Terror Funding and Military Overspending
The ADB headquarters in Manila (Representative Image)
The Asian Development Bank (ADB) has approved a financial package of $800 million for Pakistan amid strong objections from India.
According to a report by Mint, India has strongly objected to the Asian Development Bank’s (ADB) recent approval of a $800 million financing package for Pakistan, citing serious concerns over potential fund misuse, military diversion, and poor fiscal management.
The ADB on Tuesday (3 June) approved the package under the “Improved Resource Mobilisation and Utilisation Reform Programme,” comprising a $300 million policy-based loan and a $500 million programme-based guarantee.
The guarantee is expected to mobilise up to $1 billion from commercial banks.
“Pakistan has made significant progress in improving macroeconomic conditions,” said ADB country director Emma Fan, adding that the programme supports reforms to “strengthen public finances and promote sustainable growth.”
However, India raised strong objections, alleging that Pakistan has a track record of misusing international development funds for military spending.
“The linkage between Pakistan's increase in expenditure on its military, as opposed to development, cannot be fully explained solely in terms of its domestic resource mobilisation,” news agency ANI quoted sources as saying.
India also criticised Pakistan’s slow progress on Financial Action Task Force (FATF) action items, especially on terror financing and prosecution of UN-designated terrorist leaders.
New Delhi also highlighted the Pakistan military's “outsized role” in economic policymaking, warning that this undermines sustainable reforms.
Calling Pakistan’s governance “a continuing severe threat to regional peace and security,” India questioned the long-term sustainability of external debt-driven reforms. It warned that Pakistan’s economic fragility poses risks to the bank’s own financial health.
This comes on the heels of Pakistan securing $2.1 billion in two installments through the IMF's Extended Fund Facility (EFF) as part of a $7 billion deal inked last year.
