Pakistan runs on IMF funds, so how does it pay for jets, drones, and bombs?

Pakistan is broke, but its military is not. Fighter jets, drones, submarines, warships—Islamabad continues to amass them all, even as it lurches from one financial bailout to the next. With its GDP barely scraping $236 billion and over $7 billion earmarked for defense this year alone, Pakistan’s military might seems untouched by the country’s worsening economic collapse.

How?

Because the rules are different when your chief arms dealer is also your banker. China supplies more than 80% of Pakistan’s military imports, and it doesn’t just deliver hardware. It offers the money to pay for it too—on credit, with low interest, flexible terms, and long grace periods. That means Pakistan doesn’t need cash to keep arming itself; it just needs friends.

Add to this a military that controls its own vast commercial empire—running everything from farmland and cement factories to investment councils and housing projects—and you get a state within a state. A military that earns, spends, and arms independently of the civilian government’s collapsing budget.

The math should never have worked. But it did—because the international community made it work. Since 1948, the U.S. alone has poured in $40 billion in economic and military aid to Pakistan. Add Canada, Britain, and Europe, and the tally crosses $55 billion.

And what did the world get in return?

“South Korea got $15 billion. Taiwan got $10 billion. They built economies,” said former Pakistani ambassador Husain Haqqani in a decade-old video. “We got $55 billion—and built delusions.” Haqqani argued that while South Korea transformed itself, Pakistan used foreign aid to fuel military dominance. “Pakistan never gave up its obsession with India,” he said. “Every dollar just made the military stronger.”

His warning rings louder today. On May 9, 2025, the IMF approved another $2.4 billion in fresh funding for Pakistan—$1 billion under the Extended Fund Facility (EFF) and $1.4 billion under a new Resilience and Sustainability Facility (RSF). The EFF, part of a 37-month $7 billion package, is aimed at stabilizing the economy. The RSF is meant to support climate resilience.

But money is money, and in a country where budgetary walls are porous, critics warn that even IMF dollars can indirectly subsidize defense. With the military’s grip on power and revenue secure, there's little appetite for change—and little consequence for ignoring IMF demands to cut defense spending.

Haqqani summed it up years ago: “Pakistan kept coming back to Uncle Sam every two years after abusing him—because Uncle pays the bills.”