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U.S. HELPED PAKISTAN GET IMF BAILOUT WITH SECRET ARMS DEAL FOR UKRAINE, LEAKED DOCUMENTS REVEAL

Pakistan’s embattled military regime further dependent on the IMF, the U.S., and the production of munitions for the war in Ukraine to sustain itself through a crisis that shows no sign of resolution.

The U.S.-brokered loan let Pakistan’s military postpone elections, deepen a brutal crackdown, and jail former Prime Minister Imran Khan.

The Intercept, Ryan Grim, Murtaza Hussain, September 17 2023

SECRET PAKISTANI ARMS sales to the U.S. helped to facilitate a controversial bailout from the International Monetary Fund earlier this year, according to two sources with knowledge of the arrangement, with confirmation from internal Pakistani and American government documents. The arms sales were made for the purpose of supplying the Ukrainian military — marking Pakistani involvement in a conflict it had faced U.S. pressure to take sides on.

The revelation is a window into the kind of behind-the-scenes maneuvering between financial and political elites that rarely is exposed to the public, even as the public pays the price. Harsh structural policy reforms demanded by the IMF as terms for its recent bailout kicked off an ongoing round of protests in the country. Major strikes have taken place throughout Pakistan in recent weeks in response to the measures.

The protests are the latest chapter in a year-and-a-half-long political crisis roiling the country. In April 2022, the Pakistani military, with the encouragement of the U.S., helped organize a no-confidence vote to remove Prime Minister Imran Khan. Ahead of the ouster, 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.

Since Khan’s ouster, Pakistan has emerged as a useful supporter of the U.S. and its allies in the war, assistance that has now been repaid with an IMF loan. The emergency loan allowed the new Pakistani government to put off a looming economic catastrophe and indefinitely postpone elections — time it used to launch a nationwide crackdown on civil society and jail Khan.

“Pakistani democracy may ultimately be a casualty of Ukraine’s counteroffensive,” Arif Rafiq, a nonresident scholar at the Middle East Institute and specialist on Pakistan, told 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 U.S. nor Pakistan has acknowledged the arrangement.

Records detailing the arms transactions were leaked to The Intercept earlier this year by a source within the Pakistani military. The documents describe munitions sales agreed to between the U.S. and Pakistan from the summer of 2022 to the spring of 2023. Some of the documents were authenticated 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 U.S. posted by the State Bank of Pakistan.

The weapons deals were brokered, according to the documents, by Global Military Products, 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 U.S. officials include American and Pakistani contracts, licensing, and requisition documents related to U.S.-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.

To win the loan, Pakistan had been told by the IMF it had to meet certain financing and refinancing targets related to its debt and foreign investment — targets that the country was struggling to meet. The weapons sales came to the rescue, with the funds garnered from the sale of munitions for Ukraine going a long way to cover the gap.

Securing the loan eased economic pressure, enabling the military government to delay elections — a potential reckoning in the long aftermath of Khan’s removal — and deepen the crackdown against Khan’s supporters and other dissenters. The U.S. remained largely silent about the extraordinary scale of the human rights violations that pushed the future of Pakistan’s embattled democracy into doubt………………………………………..

Bombs for Bailouts

On May 23, 2023, according to The Intercept’s investigation, Pakistani Ambassador to the U.S. Masood Khan sat down with Assistant Secretary of State Donald Lu at the State Department in Washington, D.C., for a meeting about how Pakistani arms sales to Ukraine could shore up its financial position in the eyes of the IMF.

……………………………………………………………………………………………………………………………………………… In an interview with The Intercept at the Capitol on Tuesday, Van Hollen said that his knowledge of the U.S. role in facilitating the IMF loan came directly from the Biden administration………………………………………………………..

Eleventh-Hour IMF Deal

…………………………………………………………………….. The secret arms deal for Ukraine would allow Pakistan to add nearly another billion dollars to its balance sheet ………………………………………………………………………………..

As The Intercept previously reported, Lu, the senior State Department official, said in a meeting with then-Pakistani Ambassador Asad Majeed Khan two weeks after the invasion that it was the belief of the U.S. that Pakistan had taken a neutral position solely at Khan’s direction, adding that “all would be forgiven” if Khan was removed in the no-confidence vote. Since his ouster, Pakistan has firmly taken the side of the U.S. and Ukraine in the war.

……………………………………………………………………………..After orchestrating Khan’s removal, the military embarked on a campaign to eradicate his political party through a wave of killings and mass detentions. Khan himself is currently imprisoned on charges of mishandling a classified document and facing some 150 additional charges — allegations widely viewed as a pretext to stop him from contesting future elections.

………………………………………………………..The absence of other foreign support left Pakistan’s embattled military regime further dependent on the IMF, the U.S., and the production of munitions for the war in Ukraine to sustain itself through a crisis that shows no sign of resolution.  https://theintercept.com/2023/09/17/pakistan-ukraine-arms-imf/

September 19, 2023 - Posted by Christina Macpherson | Pakistan, politics international, weapons and war