Amidst ongoing and escalating tensions with India, Pakistan receives a $1.1 billion IMF bailout in May 2025. However, this isn't the first time the country has been IMF-funded. Since 1958, the country has already been funded 24 times, making the recent one its 25th IMF program. While the IMF makes a call for reform within Pakistan with the funding, Pakistan's history tells an unfortunate tale of repeated failures in meeting the IMF's demands. Ordinary citizens bear the cost, and the country remains trapped in a cycle of debt and denial, will this loan be Pakistan's last lifeline? Or is it simply an addition to the unstoppable river that spells Pakistan's collapse?
In May 2025, amidst the India-Pakistan conflict, the International Monetary Fund (IMF) approved a $1.1 billion disbursement to Islamabad. This may appear as a vote of confidence, however, the country’s economy was on life support — foreign reserves were nearly gone, inflation was eating away wages, and debt payments loomed like a guillotine. But the timing wasn’t just financial. The military tensions between the two countries were growing by the day, and whether the IMF admits it or not, this loan wasn’t just about economics. It was about avoiding disaster — military, political and financial. With the bordering militant activity in Afghanistan and China’s belt and road ambitions, a collapse here hurts not just Pakistan, but the entire region.
IMF’s Wishlist—Same Old Story
In return, the IMF wants Pakistan to:
- Cut wasteful subsidies.
- Tax the untaxed.
- Clean up its state-run industries.
And start actually preparing for climate disasters instead of reacting to them.
Reasonable? Maybe. But Pakistan’s been told all this dozens of times before. And somehow, the elites always find a way to dodge, delay, or dilute every reform that might actually change things.
A Pattern of Promises, Broken Every Time
This is Pakistan’s 25th IMF program. Twenty Fifth. Each time, the IMF shows up like a concerned friend, acting as the direct enabler behind Pakistan’s long-term downfall and each time, Pakistan nods solemnly, signs some papers, and pockets the cash. But instead of reform, it’s more of the same: short-term survival, no long-term plan. Why? Because reform is hard. Because it means upsetting powerful people — generals, dynastic politicians, rich landlords. And nobody in charge is willing to do that. Not really.
How did India react?
India didn’t support this latest loan. It abstained. Quiet protest, loud message: Why fund a country that might spend the money elsewhere? Military budgets in Pakistan are huge. Often shielded from scrutiny. If reforms are bypassed again — and defense spending soars during conflict — then what's the IMF really funding? Stability, or a cycle of avoidance?
Who Pays for the Bailout? Spoiler : Not the Rich
These loans aren’t free. They’re not grants. They’re debts. Repayment must be carried out, but the question is how? A few ways the government took was through more taxes on essentials, through slashed public services and through pain felt by regular people, not the ones at the top.
These bailouts are keeping the same broken system alive, not fixing it. The elites at the top are doing just fine, meanwhile the average Pakistani watches prices rise, job prospects vanish and electricity bills spike — again.
Breaking through the Loop
Other countries have broken free from the IMF loop. Jamaica, Egypt, Serbia — they all have taken a hit, sought out the IMF, restructured their economies, and moved forward. Not easily, and not without cost, but they did it. Pakistan could too. But it would take real sacrifice from the top-down. And so far, that hasn’t happened because it’s easier to blame outsiders, play the victim, and ask for another loan.
Where is Pakistan heading to?
Right now, Pakistan isn’t collapsing. But it’s not recovering either. It’s trapped in survival mode, living on one loan to the other as its foundation crumbles. And this time, with war talk in the air and public patience wearing thin, the consequences of failure won’t just be economic — debt insolvency, currency collapse, investor flight and in extreme cases? State fragility. Its conflict with India only intensifies these risks, no economy can afford war while running on borrowed lifelines.
Conclusively, Pakistan was given another chance by the IMF, maybe their last one. The question is: will Pakistan actually make use of it this time?
Aamir Hashmi is a student pursuing B.Tech from Jamia Millia Islamia.
Edited by: Omama Abu Talha
