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In this video, we delve deep into the IMF's decision to approve a loan to Pakistan under the Extended Fund Facility (EFF). With the ongoing economic crisis in Pakistan, this financial aid aims to stabilize the country's balance of payments and provide economic relief. We explore the objectives and functions of the IMF's EFF, and the eligibility criteria for countries seeking such loans.
Pakistan, which has received 28 loans from the IMF in the past 35 years, is heavily dependent on financial aid from multiple sources, including China, Saudi Arabia, and UAE. But what prompted the IMF to approve the loan this time? India has raised concerns about the possible misuse of IMF funds, particularly in the context of Pakistan's involvement in sponsoring terrorism. We discuss India's geopolitical concerns and its objections regarding the fairness of granting financial assistance to a country with such a background.
Additionally, we analyze the broader implications of this loan approval on international relations and the future of global economic governance.
Stay tuned for UPSC-relevant practice questions at the end of the video to help you prepare for your exams.

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