Pakistan Terror Rank Sparks Outrage as IMF Approves $1 Billion Loan
Pakistan’s troubling rise to the number two spot on the Global Terrorism Index (GTI) for 2025 has ignited fierce international debate, particularly following the International Monetary Fund’s (IMF) approval of a $1 billion loan on May 9, 2025. The decision, part of a $7 billion Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF), has drawn sharp criticism from India and global observers, who argue that the funds could be misused to fuel state-sponsored terrorism.
The GTI, published annually by the Institute for Economics and Peace, ranks Pakistan second only to Afghanistan, citing a significant increase in terror attacks and fatalities, including the April 22, 2025, Pahalgam attack in Jammu and Kashmir, which killed 26 civilians. Despite these concerns, the IMF’s executive board moved forward with the loan, prompting questions about the institution’s accountability and the moral implications of its lending practices.
A Controversial Decision Amid Escalating Tensions
India, a key IMF member, abstained from voting on the loan, registering strong dissent over Pakistan’s poor track record with IMF programs and its alleged support for cross-border terrorism. The Indian Ministry of Finance warned that “rewarding continued sponsorship of terrorism sends a dangerous message to the global community” and risks exposing donors to reputational harm. This stance was echoed by several member countries, though IMF procedures limited a broader response.
The timing of the loan approval has intensified scrutiny, as India-Pakistan tensions have escalated since the Pahalgam attack, attributed to a proxy of the Pakistan-based Lashkar-e-Taiba. India’s retaliatory strikes under Operation Sindoor on May 7, 2025, targeted terror complexes in Pakistan, further straining bilateral relations. Critics, including Jammu and Kashmir Chief Minister Omar Abdullah, have accused the IMF of indirectly funding Pakistan’s military actions by providing financial relief.
Pakistan’s Economic Dependence on IMF Bailouts
Pakistan economy, plagued by chronic instability, has relied on IMF support for decades, with disbursements in 28 of the last 35 years since 1989. The latest $1 billion tranche brings total disbursements under the current EFF to $2.1 billion, aimed at stabilizing the economy and fostering growth. Pakistan’s Prime Minister Shehbaz Sharif hailed the decision as a victory, claiming it reflects international confidence in the country’s economic recovery.
However, India argues that Pakistan’s repeated bailouts—four programs since 2019—have failed to deliver lasting reforms, questioning the effectiveness of IMF program designs or Pakistan’s compliance. The Indian delegation highlighted the military’s deep influence over economic decisions, citing a 2021 UN report that described military-linked businesses as Pakistan’s largest conglomerate. This entanglement raises concerns about potential misuse of IMF funds for military or terror-related activities.
Global Reactions and Social Media Outcry
The IMF’s decision has sparked widespread condemnation on platforms like X, where users have labeled the move “pathetic” and accused the IMF of supporting terrorism. Posts on X reflect public frustration, with sentiments like “Pakistan ranks second on the Global Terrorism Index, yet the IMF approves a $1 billion loan—a deeply concerning decision.” Critics argue that the loan, approved despite Pakistan’s high GTI ranking, undermines global efforts to combat terrorism.
Internationally, voices like Mariam Solaimankhil, a former Afghan MP, have accused the IMF of “bankrolling bloodshed,” while Indian analysts, including former foreign secretary Kanwal Sibal, called the decision “terrible optics.” These reactions underscore the growing demand for moral accountability in global financial institutions, particularly when lending to nations with questionable records on terrorism.
IMF’s Rationale and Pakistan’s Economic Progress
The IMF defends its decision, citing Pakistan’s progress under the EFF, including a primary fiscal surplus of 2.0% of GDP in the first half of FY2025 and inflation dropping to a historic low of 0.3% in April 2025. The organization also noted improved foreign exchange reserves, rising from $9.4 billion in August 2024 to $10.3 billion by April 2025, with projections of $13.9 billion by June 2025. The RSF aims to support Pakistan’s climate resilience, addressing vulnerabilities to natural disasters.
Despite these achievements, the IMF acknowledged “elevated risks” from global economic uncertainty and geopolitical tensions. Deputy Managing Director Nigel Clarke emphasized the need for continued reforms to ensure sustainable growth, including tax base expansion and energy sector restructuring. However, critics argue that these technical justifications overlook the broader implications of funding a nation ranked so high on the GTI.
A Call for Reform in Global Lending Practices
The controversy surrounding the IMF’s loan to Pakistan has reignited calls for reforming the institution’s lending framework. India’s Ministry of Finance urged the IMF to integrate moral considerations into its decisions, noting that the organization’s response to terrorism concerns is often constrained by procedural formalities. This gap highlights the need for stricter oversight to prevent funds from being diverted to illicit activities.
As Pakistan continues to grapple with its economic challenges and global criticism over its terrorism record, the IMF’s decision risks fueling further tensions in the region. The international community now faces the challenge of balancing economic support with accountability, ensuring that financial aid does not inadvertently enable destabilizing activities.
Looking Ahead: Implications for Regional Stability
The approval of the $1 billion loan, while a lifeline for Pakistan economy, raises critical questions about the intersection of global finance and security. With Pakistan’s high GTI ranking and ongoing India-Pakistan hostilities, the IMF’s role in the region will remain under scrutiny. As the situation evolves, stakeholders hope for a resolution that prioritizes both economic stability and global safety.
For now, the world watches closely as Pakistan navigates its economic recovery amid accusations of terror sponsorship, with the IMF’s actions shaping the discourse on international lending and accountability.
FAQs About Pakistan’s Global Terrorism Index Ranking and IMF Loan
Why is Pakistan ranked #2 on the Global Terrorism Index?
Pakistan’s #2 ranking on the 2025 Global Terrorism Index reflects a sharp rise in terror attacks and fatalities, including the Pahalgam attack in April 2025. The Institute for Economics and Peace cites ongoing activities by groups like Lashkar-e-Taiba as key factors.
What is the purpose of the IMF’s $1 billion loan to Pakistan?
The loan, part of a $7 billion Extended Fund Facility, aims to stabilize Pakistan’s economy, reduce inflation, and boost foreign exchange reserves. It also includes a $1.4 billion Resilience and Sustainability Facility to address climate vulnerabilities.
Why did India oppose the IMF loan to Pakistan?
India abstained from voting, citing Pakistan’s poor track record with IMF programs and concerns that funds could be misused for state-sponsored terrorism. India warned that such loans risk rewarding destabilizing activities.
How has the public reacted to the IMF’s decision?
Posts on X and statements from global figures express outrage, calling the loan “pathetic” and accusing the IMF of supporting terrorism. Critics argue it undermines efforts to combat terrorism given Pakistan’s GTI ranking.
What reforms are needed in IMF lending practices?
Critics, including India, call for moral safeguards in IMF lending to prevent funds from supporting terrorism. They urge stricter oversight and integration of ethical considerations into loan approvals.