Aid, Arms, and Austerity: Pakistan’s IMF Addiction and Regional Risks

Pakistan’s 24th bailout from the International Monetary Fund—approved in April 2025, amid a significant India-Pakistan military escalation following the Pahalgam terror attack—has reignited debate over the geopolitical uses of financial aid. Framed as a response to macroeconomic stabilisation and climate resilience, the $2.4 billion package was delivered just days before a ceasefire, raising concerns that IMF funding served as a diplomatic lever in a nuclear flashpoint. With Pakistan simultaneously increasing defence spending and stalling on transparency reforms, the bailout risks rewarding strategic belligerence while deferring genuine reform. The seminar will examine the cyclical nature of Pakistan’s dependence on the IMF, highlighting how entrenched governance failures, elite tax evasion, and geopolitical manoeuvring have reinforced recurring financial instability. Drawing on a recent research paper (Pakistan and the IMF: A Cycle of Dependency and the Need for Genuine Reform), the discussion will explore the IMF’s evolving role as both an economic and strategic actor and assess whether such bailouts stabilise or perpetuate fragile states with terror linkages.

Programme