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Business News/ News / World/  Pakistan's secret arms sales to US linked with IMF bailout: Report

Pakistan's secret arms sales to US linked with IMF bailout: Report

Secret Pakistani arms sales to the US helped facilitate an IMF bailout earlier this year.

Secret Pakistani arms sale to US helped facilitate IMF bailout. (Reuters)Premium
Secret Pakistani arms sale to US helped facilitate IMF bailout. (Reuters)

A secret Pakistani arms sales to the United States helped facilitate a controversial bailout from the International Monetary Fund (IMF) earlier this year, according to a report published by The Intercept, an online American non-profit news organization.

The arms sales were made for the purpose of supplying the Ukrainian military, signaling Pakistani involvement in a conflict it had faced US pressure to take sides on. 

The report stated that the revelation is a window into the kind of behind-the-scenes maneuvering between financial and political elites that rarely are exposed to the public, even as the public pays the price, ANI reported, citing The Intercept. 

Pakistan faced major protests in the face of harsh structural policy reforms demanded by the Washington-based financial body as terms for its recent bailout package

There were several strikes in the country in response to the measures. The protests are the latest chapter in a year-and-a-half-long political crisis roiling the country.

With the encouragement of the US, the Pakistani military in April 2022, helped organize a no-confidence vote to remove Prime Minister Imran Khan. Ahead of Khan’s ouster, US State Department diplomats privately expressed anger to their Pakistani counterparts over what they called Pakistan’s “aggressively neutral" stance on the Ukraine war under Khan.

They warned of dire consequences if Khan remained in power and promised “all would be forgiven" if he were removed. After Khan’s ouster, Islamabad emerged as a useful supporter of the US and its allies in the war, assistance that has now been repaid with an IMF loan, The Intercept reported. 

Pakistan is known as a production hub for the types of basic munitions needed for grinding warfare. As Ukraine grappled with chronic shortages of munitions and hardware, the presence of Pakistani-produced shells and other ordinances by the Ukrainian military has surfaced in open-source news reports about the conflict, though neither the US nor the Pakistanis have acknowledged the arrangement.

A Pakistani military source leaked records detailing the arms transactions earlier this year. The documents describe munitions sales agreed to between the US and Pakistan from the summer of 2022 to the spring of 2023, as per The Intercept reports. 

The authentication process was done by matching the signature of an American brigadier general with his signature on publicly available mortgage records in the United States; by matching the Pakistani documents with corresponding American documents; and by reviewing publicly available but previously unreported Pakistani disclosures of arms sales to the US posted by the State Bank of Pakistan.

The economic capital and political goodwill from the arms sales played a key role in helping secure the bailout from the IMF, with the State Department agreeing to take the IMF into confidence regarding the undisclosed weapons deal, according to sources with knowledge of the arrangement, and confirmed by a related document. 

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Published: 18 Sep 2023, 12:55 PM IST
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