It has been revealed that secret arms sales from Pakistan to the United States played a pivotal role in securing Pakistan a contentious bailout from the International Monetary Fund (IMF) earlier this year.
Two sources, along with internal government documents from Pakistan and the United States, confirm the existence of these covert arms transactions. The weapons were intended for the Ukrainian military, marking Pakistan’s involvement in a war where it previously faced U.S. pressure to take a clear stance.
The revelation of these covert arms sales sheds light on the secretive dealings between financial and political elites, often hidden from public scrutiny. The public’s discontent with these measures culminated in widespread strikes and demonstrations, reflecting the ongoing political crisis that has gripped the nation for the past year and a half.
A Shift in Pakistan’s Stance Post-Khan’s Ouster
In April 2022, the U.S.-backed Pakistani establishment orchestrated a no-confidence vote that led to the removal of Prime Minister Imran Khan. Subsequently, the establishment broke the coalition government and installed their own Prime Minister.
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Before Khan’s ouster, Pakistan had taken a neutral stance on the Russo-Ukrainian War. State Department diplomats had privately expressed frustration over Pakistan’s neutral stance and had warned the establishment of consequences if Khan remained in power.
Following Khan’s ouster, Pakistan shifted its stance and became a supportive ally of the U.S. and its allies in the Ukraine war. This shift in alignment paved the way for the IMF loan. The emergency loan allowed the new Pakistani government to avert an economic catastrophe, postpone elections, and launch a crackdown on civil society.
Pakistan Sells its Neutrality for IMF Deal
Pakistan is known as a production hub for basic munitions crucial for modern warfare. Reports suggest that Pakistani-produced shells and other ordnance have been used by the Ukrainian military, although neither the U.S. nor Pakistan has officially acknowledged this arrangement.
Numerous meetings occurred between Pakistani establishment-backed government officials and U.S. counterparts before the deal was ultimately sealed.
The arms deals brokered between the U.S. and Pakistan, which spanned from the summer of 2022 to the spring of 2023, were revealed through leaked documents. Authentication methods, including matching signatures and reviewing publicly available disclosures, corroborated the authenticity of these documents. The deals were brokered by Global Military Products, a subsidiary of Global Ordnance, a controversial arms dealer.
To secure the IMF loan, Pakistan had to meet specific financial targets related to its debt and foreign investment, which it was struggling to achieve. The economic and political capital generated by the arms sales played a pivotal role in securing this IMF bailout.
The State Department, in a bid to build confidence with the IMF, disclosed the undisclosed weapons deal, ultimately bridging the financing gap and averting an economic catastrophe in Pakistan. The funds garnered from the secret arms sales went a long way in bridging this financial gap, easing economic pressure and enabling the postponement of elections.
While the U.S. officially denied any role in facilitating the IMF loan, statements from Maryland Democratic Sen. Chris Van Hollen contradicted this stance. Van Hollen asserted that the U.S. played a crucial role in ensuring the IMF’s support for Pakistan’s economic relief.
Uncertain Democratic Horizons
Amidst this covert wheeling and dealing, Pakistan’s democracy faces uncertainty. The removal and imprisonment of Khan and the subsequent crackdown on political dissent have left many questioning the country’s democratic future. The role of foreign powers in these developments continues to be a subject of debate.
As Pakistan grapples with the consequences of IMF-directed austerity measures and political turmoil, the power centre of the country has pinned its hopes on foreign economic support. Promises of substantial investments from Gulf states have been made, but their actualization remains uncertain, leaving Pakistan dependent on the IMF and covert arms sales in a prolonged crisis with no clear resolution in sight.
Watch the analysis of Dr. Moeed Pirzada on the matter.