The International Monetary Fund (IMF), a global institution promoting financial stability and economic growth, recently approved a $1 billion disbursement to Pakistan under its Extended Fund Facility (EFF), alongside $1.4 billion under the Resilience and Sustainability Facility (RSF).

These loans aim to stabilize Pakistan's struggling economy, support climate resilience, and prevent financial collapse.

Despite geopolitical tensions, particularly objections from India, the IMF proceeded with the funding. India protested Pakistan's poor track record of reform implementation, its repeated bailouts: 28 times in 35 years and concerns that funds might indirectly support cross-border terrorism.

India abstained from the IMF Executive Board vote, warning of reputational risks to the institution.

However, the IMF clarified its position as apolitical, focusing solely on economic stabilization. The loans are contingent upon Pakistan implementing key reforms, including tax restructuring, energy tariff adjustments, and the introduction of climate levies.

These reforms were reviewed during a staff-level assessment before disbursement.

The IMF emphasized the importance of supporting Pakistan amid global uncertainty and domestic vulnerabilities.

Ultimately, the decision reflects the IMF's commitment to preventing systemic risk and ensuring financial stability, even when geopolitical concerns arise among its member states.

The move also underscores the growing role of climate-linked funding in global financial assistance.