Pakistan gets fresh monetary help of $1.2 billion (₹11,280 crore) from the International Monetary Fund (IMF). Pakistan’s economy is getting this boost thanks to a new agreement. The IMF will provide the financial assistance to help the country rebuild its economy. What’s the Deal? The IMF, which acts like a global financial helper, is giving Pakistan this money through two separate programs. One program is designed to fix Pakistan’s overall economy. The other is focused on helping the country become more resilient to things like climate change. Pakistan has been working with the IMF to improve its financial situation. The two sides have been in talks for a while, and they’ve now reached an agreement. Terms Conditions: To receive the money, Pakistan has promised to manage its finances responsibly. This includes making changes to help the economy grow and protecting vulnerable people from rising energy costs. The Big Picture! This deal is important for Pakistan because it provides much-needed financial support. The money will help the country strengthen its economy and address challenges like climate change. The IMF’s approval is still needed, but this agreement is a positive step for Pakistan. Received ₹12,000 crore in May despite India’s objection In May, during an IMF Executive Board meeting, India strongly objected to the financial assistance being extended to Pakistan, stating that such funds could be used to support cross-border terrorism. India refused to vote on the review and did not participate in the voting process. At the time, India said: “Continuous sponsorship of cross-border terrorism sends a dangerous message to the global community. It undermines the credibility of funding agencies and donors, and weakens global values. Our concern is that money provided by international financial institutions like the IMF could be misused for military purposes or state-sponsored cross-border terrorism.” What does the IMF Executive Board do? The International Monetary Fund (IMF) is a global organization that provides financial support, economic guidance, and oversight to its member nations. Its core decision-making body is the Executive Board, which: Decides which countries receive loans Determines policy recommendations Oversees global economic developments The Board has 24 Executive Directors, each representing a country or a group of countries. India has its own independent representative, who presents India’s position and ensures IMF decisions do not adversely impact the country. When a loan is being considered, this representative voices India’s perspective. How voting works in the IMF The IMF has 191 member countries, each with one vote—but the value of each vote differs based on a country’s quota. A higher quota = a higher vote value India’s vote share is approximately 2.75% A country’s quota is determined by factors like: GDP Foreign exchange reserves Trade levels Economic stability The United States has the largest quota at 16.5%, giving it the most influential vote—essentially a veto power. India has 2.75%, while Pakistan has 0.43%. Types of voting rights Basic Votes Every member country gets 250 equal basic votes. Quota-based Votes Additional votes are earned based on the country’s purchase of IMF’s special currency, SDR (Special Drawing Rights).1 vote is granted for every 100,000 SDR. Total Votes The sum of Basic Votes + Quota-based Votes. What is SDR? Special Drawing Rights (SDR) is an international reserve asset created by the IMF. It functions like an international monetary unit, used in global financial transactions, though it is not an actual currency. Why the US holds decisive power Most IMF decisions require 85% of total votes. Since the US alone holds 16.5%, no decision can pass without US support. If the US abstains, the voting total falls to 83.5%, which is below the required threshold—effectively giving the US veto power. Post navigation Find your mutual fund investment details on a centralised portal:From profits to inactive SIPs, get all details on this platform
