Opinion | IMF Bailouts, Economic Woes, Weapons Procurement, and the Questions It Raises at Pakistan

Pakistan’s repeated IMF bailouts despite persistent economic distress, rising inflation, and poverty raise serious questions about governance and national priorities. Simultaneous weapons procurement, terror links, and Pakistan’s placement on the Financial Action Task Force grey list from 2018–2022 further intensify international concerns.

Pakistan is a country that for decades has remained trapped in a cycle of foreign aid dependence, loans, political and economic instability, and uncertainty. Every few years, Pakistan reaches out to the IMF or its lending partners for financial assistance, seeking bailouts to prevent its fragile economy from collapsing. Yet, despite repeated tranches worth billions, the structural problems of the Pakistani economy continue to deepen. Inflation remains high, foreign reserves deplete, poverty and unemployment continue to rise, and common citizens bear the burden of economic mismanagement. Pakistan’s dependence on IMF bailouts has almost become institutionalised. Since independence in 1947, Pakistan has repeatedly approached the IMF for assistance. Instead of serving as a makeshift or temporary relief measure, it has become Pakistan’s recurring lifeline. Since its formation in 1947, Pakistan has reached out to the IMF as many as 25 times, the first being in 1958, right after a decade of independence. Pakistan is one of the IMF’s frequent borrowers, entering into agreements every 3–4 years to manage the balance of payment crises. The IMF holds a major portion up to $45 billion of Pakistan’s total $130 billion debt. The latest IMF approvals in 2026 added about $1.32 billion in funding under the Extended Fund Facility and climate resilience programs. Pakistan is set to receive $7 billion under a 37-month agreement from 2024–27 under combined EFF/RSF arrangements; so far, Pakistan has received roughly $4.8 billion under these arrangements. But with every IMF bailout, there is a catch. Each bailout acts as a double-edged sword. While the IMF provides temporary economic relief, it does not come without strict conditions. Every bailout package includes measures such as subsidy cuts, currency devaluation, increased taxation, and austerity policies. Although these steps may stabilize the economy in the short term, they often place immense pressure on ordinary citizens. The effects are visible across Pakistani society. Rising fuel prices, soaring electricity tariffs, shrinking purchasing power, and increasing food insecurity have made life difficult for millions. Middle-class families struggle to maintain living standards, while poverty continues to expand in many regions. Youth unemployment remains a major challenge, forcing many educated Pakistanis to seek opportunities abroad. Economic frustration has gradually translated into political anger and public distrust toward institutions. The level of poverty is so severe that the world witnesses disturbing visuals of ordinary citizens struggling and even dying for a bag of flour. Common people remain desperate for basic necessities. Inflation erodes even the last drop of their savings, leaving millions trapped in economic hardship and uncertainty.

For the sake of argument, assuming economic hardship is normal as every country faces economic challenges at some point the reality in Pakistan remains deeply concerning. Even after receiving massive aid, loans, and repeated bailouts from global financial institutions, along with financial support from cash-rich allies, the economic woes not only persist but continue to deepen. This raises a serious question: where does all the money go? If the economy shows little or no improvement despite continuous external assistance, what ultimately happens to those billions of dollars?

Reports and public perception increasingly suggest that the widening gap between the rich and the poor, and between the state and ordinary citizens, grows larger with each passing day. While ordinary citizens struggle with inflation, unemployment, and shrinking savings, the elite and powerful institutions often remain insulated from the harsh realities faced by the common people. The burden of austerity, taxation, and economic instability falls largely upon the middle and lower classes, further fuelling frustration among the population.

A major concern is the alleged mismanagement and inappropriate use of such funds. Years ago, when Pakistan was grappling with devastating floods, the country received significant international aid and humanitarian assistance for relief and rehabilitation. However, even months later, the condition of affected people showed little to no improvement. This led to widespread speculation and criticism that a huge portion of the funds meant for flood victims never truly reached those in need. Instead, many believed that the aid largely remained on paper while, in reality, much of it may have ended up in the pockets of corrupt and influential individuals involved in the system. Such allegations further weakened public trust and raised serious concerns regarding transparency, accountability, and the effective utilization of international assistance.

Another major allegation concerns the interference of the Pakistani military in civilian affairs. It is no secret that the Pakistan Army remains the most powerful institution in the country and exercises enormous influence over politics, foreign policy, and national decision-making. Despite severe economic strain, the military continues to enjoy substantial budget allocations, privileges, and institutional benefits.

Critics argue that while ordinary citizens face inflation, unemployment, and poverty, enormous resources continue to flow toward military welfare and weapons procurement. Recently, Pakistan made headlines over reports of acquiring advanced military platforms from China, including fifth-generation stealth fighter jets, Hangoor-class submarines, AWACS systems, attack helicopters and recent testing of supersonic FATAH-3 missile.

The timing of such expensive defence deals alongside repeated IMF bailouts raises serious questions. How can a country struggling to stabilize its economy and provide basic necessities to its citizens afford such costly military acquisitions? For many observers, the contradiction appears both strange and deeply concerning. When ordinary people struggle to afford bread, fuel, and electricity, the pursuit of highly advanced weapon systems inevitably raises questions about national priorities and the direction of state spending.

While Pakistan denies it, it is an open secret that Pakistan is viewed as a harbour and heaven for terrorist groups. It has supported certain terror groups for strategic advantage. Terror outfits like Lashkar-e-Taiba and Jaish-e-Mohammed are often believed to enjoy safe asylum in Pakistan. Analysts further suggest that humanitarian aid and funds may indirectly be directed to such terror outfits and be used to carry out attacks in India, especially in Kashmir. If such suspicions hold truth, it raises serious concerns regarding transparency, management and accountability. Almighty knows.

Moreover, Pakistan remained on the Financial Action Task Force grey list from 2018 to 2022 over concerns related to terror financing and money laundering, further intensifying perceptions that these claims and allegations are not entirely baseless.

In the end we may argue this and that, but what we must ask Pakistan is why its economy struggles even after receiving repeated bailouts and aid, and seek transparency and accountability. Global financial institutions must take preventive measures while giving bailouts and ensure that assistance is not misused for military or terror purposes.

ALIZAROON@112GMAIL.COM