The tension between India and Pakistan is at its peak and meanwhile the International Monetary Fund (IMF) has given a loan of 1 billion dollars to Pakistan. India definitely raised its voice against this but despite wanting to, India could not vote against this bailout package.
India objected to the loan, citing Pakistan’s poor track record and opposed the funding, saying that the financial aid received by Pakistan in the past has not been utilized properly.
Who takes the funding decision in IMF?
- The IMF Executive Board consists of 25 directors representing member countries or groups of countries. It handles daily operational matters, including loan approval.
- Unlike the United Nations, where each country has one vote, the IMF’s voting power reflects the economic size of each member. For example, countries such as the United States have a disproportionately high voting share.
- In cases where a vote is required, the system does not allow a formal “no” vote. Directors can either vote in favour or abstain. There is no provision to vote against the loan or the proposal.