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Unveiling the Secret: How Pakistani Arms Sales to the US Influenced an IMF Bailout

18 September 2023

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In a surprising turn of events, a recent report published by The Intercept has shed light on a clandestine arms deal between Pakistan and the United States, which played a pivotal role in facilitating a controversial bailout from the International Monetary Fund (IMF). This revelation offers a glimpse into the covert dealings between financial and political elites, often hidden from the public eye.

The covert arms sales were ostensibly intended to supply the Ukrainian military, indicating Pakistan's involvement in a conflict in which it had faced pressure from the United States to take sides. This intricate web of diplomacy and arms trading underscores the complex geopolitical landscape in which nations operate.

The backdrop of this revelation involves Pakistan's struggle with harsh structural policy reforms mandated by the IMF as a condition for a recent bailout package. These reforms sparked significant protests within the country, creating a year-and-a-half-long political crisis. The protests were a manifestation of the public's dissatisfaction with the economic measures imposed on them.

Interestingly, the United States played a significant role in this political turmoil. In April 2022, with American encouragement, the Pakistani military organized a no-confidence vote that led to the removal of Prime Minister Imran Khan. This move was spurred by Washington's frustration with what it deemed Pakistan's "aggressively neutral" stance on the Ukraine conflict under Khan's leadership.

US State Department diplomats, in private conversations with their Pakistani counterparts, expressed their discontent with Khan's stance and warned of dire consequences if he remained in power. However, they also promised that "all would be forgiven" if Khan were ousted. Following Khan's removal, Islamabad transformed into a valuable supporter of the US and its allies in the Ukraine war—a role that has seemingly been reciprocated with the IMF bailout.

One intriguing aspect of this revelation is Pakistan's status as a production hub for basic munitions required for protracted warfare. Amidst Ukraine's struggle with a shortage of munitions and military hardware, reports emerged of Pakistani-produced shells and other ordnance in the possession of the Ukrainian military. Remarkably, neither the US nor Pakistan officially acknowledged this arrangement.

The authenticity of the arms transaction records was verified through a meticulous process, which included matching signatures of an American brigadier general with publicly available mortgage records in the United States. Additionally, Pakistani documents were cross-referenced with corresponding American records, and previously undisclosed Pakistani disclosures of arms sales to the US were uncovered through the State Bank of Pakistan.

Economically and politically, the arms sales played a crucial role in securing the IMF bailout. Sources with knowledge of the arrangement indicate that the US State Department took the IMF into confidence regarding the undisclosed weapons deal, as confirmed by a related document.

In conclusion, the secret Pakistani arms sales to the US, shrouded in geopolitical complexities and covert diplomacy, have unveiled a previously hidden dimension of international relations. The connection between arms deals and IMF bailouts underscores the intricate dance between nations, their financial institutions, and their political maneuverings, leaving observers with much to ponder about the world of geopolitics and its hidden intricacies.
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