Geopolitics and Double Standards: IMF Lending Through the Lens of the Global South

Not Just Numbers: The Geopolitical Currency of IMF Decisions

The International Monetary Fund (IMF) has long portrayed itself as a neutral technocratic institution committed to preserving global financial stability through rule-based, non-political mechanisms. However, the recent disbursement of emergency funds to Pakistan, despite formal objections from India citing concerns over cross-border terrorism, has pulled back the curtain on the geopolitical forces that silently but significantly shape the decisions of even the most ostensibly impartial multilateral institutions. For many in the Global South, this is not an isolated event but a continuation of a long-standing pattern in which power politics dictate access to finance, reinforcing hierarchies that echo colonial legacies in the modern economic order.

India, an emerging voice from the Global South and one of the largest contributors to global growth, raised legitimate concerns that IMF funds could be diverted toward activities detrimental to regional stability. While these objections were embedded in a historical bilateral security dilemma, they also highlighted a broader structural issue: are international financial institutions truly impartial in applying their standards, or are those standards selectively enforced in alignment with geopolitical interests, especially of powerful shareholders like the United States?

Pakistan’s economic distress is undeniable. Years of misgovernance, declining reserves, and increasing climate vulnerability have brought its economy to the brink of collapse. Yet, this is not its first IMF bailout; since 1958, it has received support through 25 arrangements. In the last five years, since 2019, there have been four IMF programmes. What distinguishes its case is not the frequency of requests, but the relative ease with which assistance is extended, despite weak reform records and persistent concerns from neighbouring countries. This leniency becomes especially glaring when compared with the prolonged, austerity-heavy negotiations imposed on other crisis-hit Global South nations like Sri Lanka, Ghana, or Zambia—countries with fewer geopolitical dividends to offer the West.

The Indian response mentions that had the previous programmes succeeded in putting in place a sound macroeconomic policy environment, Pakistan would not have approached the Fund for yet another bailout programme. As Pakistan’s former ambassador to the US quotes, “Going to the IMF is like going to the ICU [intensive care unit]. If a patient goes 24 or 25 times to the ICU, then there are structural challenges and concerns that need to be dealt with”. These structural reforms are largely missing and partially failed in the Pakistani case; such perpetual precarious management of funds should have pushed for thorough and impartial reviews of Pakistan’s political economy, at least the channelised allocation of these funds.

This discrepancy is not coincidental. The IMF, while multilateral in structure, remains heavily influenced by its largest shareholder, the United States, with the biggest voting share at 16.49%. For decades, Washington has viewed Pakistan through a strategic lens—during the Cold War, the War on Terror, and now amid growing Sino-American rivalry. Financial assistance to Islamabad has often served Washington’s broader strategic imperatives. By contrast, Global South countries without such leverage face inflexible conditionalities, long delays, and lectures on fiscal discipline.

The underlying architecture of the IMF reinforces this asymmetry. Unlike the United Nations' one-country-one-vote system, the IMF allocates voting rights based on a country’s economic size and financial contributions. This quota-based structure has increasingly come under criticism for privileging the economic clout of richer Western nations while marginalising the voices of developing economies, whose lived experiences of poverty, debt, and climate vulnerability are routinely sidelined in key decision-making processes. As a result, decisions that significantly impact the Global South are too often made without their meaningful participation or consent.

For much of the Global South, this reinforces a hard truth: institutions like the IMF, while global in mandate, often operate through selective enforcement that favours the geopolitically aligned and marginalises the rest. This undermines the core credibility of multilateralism. Countries that seek IMF assistance out of sheer economic necessity often find themselves caught in a web of austerity, structural adjustment, and diminished sovereignty, while others, backed by geopolitical patrons, bypass these strictures with impunity.

India’s protest must be read not merely as a bilateral grievance but as a broader critique of systemic inequity. When a rising Southern power’s legitimate security concerns are overruled in favour of expedient financial flows, the message to the rest of the Global South is clear: voice and representation remain conditional, and justice remains unevenly applied. Had this not been the case, India’s objections to the IMF’s fund allocation to Pakistan, raising serious concerns about potential misuse, including the risk of financing cross-border terrorism, would have at least received more serious and considered attention, if not outright endorsement. The formal Indian response also pointed this out, where in a statement, the Indian Ministry of Finance said, “Rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and undermines global values.” But the IMF did not even deem it necessary to respond to these charges, let alone reconsider the loan itself. The perception is clear that these institutions are tools to maintain the “Gramscian hegemony” and to let the “north decide the fate of the south”.

This perception is driving a slow but decisive pivot. Disillusionment with Bretton Woods institutions has led to the emergence of alternative mechanisms, such as the BRICS-led New Development Bank, China’s Belt and Road Initiative, and regional financial arrangements like the Chiang Mai Initiative. These alternatives are not without their contradictions; their “Chinese style” dressing and behaviour are well enough to raise eyebrows, but their growing appeal signals a shift in global trust. Increasingly, Global South countries are seeking platforms where their vulnerabilities are not weaponised and where solidarity can replace suspicion.

The IMF’s recent disbursement to Pakistan, therefore, is not merely a financial transaction. It is a geopolitical gesture—a reminder that institutional neutrality often masks a deeper political architecture in which power, not parity, is the true currency. For the Global South, it is yet another lesson in how global governance, in its current form, too often speaks the language of inclusion while practising the politics of exclusion.

Until the structures of global finance meaningfully account for the agency, dignity, and realities of the Global South, calls for reform will only grow louder. The choice before the IMF and its powerful patrons is stark: adapt toward genuine equity, or risk becoming irrelevant to the very regions they claim to serve.