Pakistan’s IMF bailout had US support after secret arms deal: report

Secret Pakistani arms sales to the US to be used by Ukraine helped cash-strapped Islamabad secure a crucial IMF bailout earlier this year, a report cited internal Pakistani and American government documents as confirming.

The arms sales were made for the purpose of supplying the Ukrainian military — marking Pakistani involvement in a conflict it had faced US pressure to take sides on, the Intercept, an online investigative website has reported.

Pakistan's Foreign Office Spokesperson Mumtaz Zahra Baloch on Monday, however, rejected as “baseless and fabricated” the American non-profit news organisation's report, saying that the cash-strapped country provided arms to the US to get its support to clinch the USD 3 billion deal with the IMF towards the end of June to avoid default.

Pakistan has struggled to maintain a balance in ties with the Kremlin and Washington since the Russia-Ukraine crisis began earlier last year.

“The IMF Standby Arrangement for Pakistan was successfully negotiated between Pakistan and the IMF to implement difficult but essential economic reforms. Giving any other colour to these negotiations is disingenuous,” Dawn News quoted Baloch as saying.

Baloch said Pakistan maintained a policy of “strict neutrality” in the dispute between the two countries and did not provide them any arms or ammunition in that context.

“Pakistan’s defence exports are always accompanied by strict end-user requirements,” she said.

During a visit to Pakistan in July, Ukra­inian Foreign Minister Dmytro Kuleba had rejected similar reports that Islamabad was supplying arms to Ukraine to support its military during the ongoing conflict with Russia, according to Dawn.

He had clarified that the two nations had no deal for the supply of arms and ammunition.

Former foreign minister Bilawal Bhutto-Zardari had also expressed similar views, maintaining that Pakistan had not signed any agreement with Ukraine for military supplies since the war began.

An earlier report had also claimed Pakistan set up a defence trading firm in Warsaw to smoothen the process of arms supplies to Ukraine.

In April in an interview with BBC, a Ukrainian commander had talked about receiving rockets from other countries including Pakistan.

But officials strongly reject claims of providing any ammunition to Ukraine insisting the country maintained a “policy of strict neutrality”.

An official, however, had said if a third party supplied weapons purchased from Pakistan to another country, it was their responsibility.

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

The Russia-Ukraine crisis began last year when President Vladimir Putin ordered the latter’s invasion on February 24.

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In July, the IMF transferred USD 1.2 billion to cash-strapped Pakistan, part of the USD 3 billion bailout programme for nine months to support the government’s efforts to stabilise the country's ailing economy.