US helped Pakistan in facilitating IMF bailout with secret arms deal for Ukraine

A confidential arms deal between Pakistan and the United States played a role in facilitating a contentious bailout from the International Monetary Fund (IMF) earlier this year, the Intercept quoted two sources with knowledge of the arrangement, with confirmation from internal Pakistani and American government documents

The arms sales were primarily intended to provide military support to Ukraine. This development highlights Pakistan’s involvement in a conflict where it faced pressure from the United States to take a clear stance.

The Intercept’s report sheds light on the behind-the-scenes dealings among financial and political elites, which are typically shielded from public view, even though the public bears the consequences of such manoeuvres.

Pakistan encountered significant protests in response to the stringent structural policy reforms mandated by the IMF as part of the conditions for its recent bailout. These protests led to strikes across the country and are the latest episode in an ongoing political crisis that has gripped Pakistan for over a year and a half.

With US encouragement, the Pakistani military played a role in orchestrating a vote of no confidence in April 2022 to remove Prime Minister Imran Khan from power. Prior to Khan’s removal, American State Department diplomats privately expressed dissatisfaction to their Pakistani counterparts regarding what they viewed as Pakistan’s “aggressively neutral” stance on the Ukraine conflict during Khan’s leadership.

They warned of serious repercussions if Khan remained in office and promised forgiveness of past issues if he were ousted. Following Khan’s removal, Islamabad became a valuable ally of the United States and its coalition partners in the Ukraine conflict, and this support has now been reciprocated with an IMF loan. This emergency loan allowed the new Pakistani government to avert an impending economic crisis and indefinitely delay scheduled elections.

A nonresident scholar at the Middle East Institute and specialist on Pakistan, Arif Rafiq, said: “Pakistani democracy may ultimately be a casualty of Ukraine’s counteroffensive.

”As per The Intercept, 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 source within the Pakistani military 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.

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.

Documents by Global Military Products reveal that the weapons deals were brokered. Global Military Products is a subsidiary of Global Ordnance, a controversial arms dealer whose entanglements with less-than-reputable figures in Ukraine were the subject of a recent New York Times article.

Documents outlining the money trail and talks with US officials include American and Pakistani contracts, licensing, and requisition documents related to US-brokered deals to buy Pakistani military weapons for Ukraine.

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, according to The Intercept.

With inputs from ANI.