New Delhi: “We got $55 billion and built delusions.” That is how former Pakistani Ambassador to the United States, Husain Haqqani, summed up decades of international aid to Pakistan in a video clip – which continues to echo more than 10 years after it was recorded. While countries like South Korea and Taiwan used foreign assistance to transform their economies, he says in the video, Pakistan funneled billions into building a “stronger” military and little else.
Fast-forward to May 9, 2025, and the pattern remains the same. The International Monetary Fund (IMF) approved yet another $2.4 billion bailout for Pakistan, $1 billion under the Extended Fund Facility (EFF) and $1.4 billion under a newly introduced Resilience and Sustainability Facility (RSF), intended to support climate adaptation. Once again, the international community stepped in to stabilise a faltering economy. And once again, Pakistan’s defense spending is untouched.
Even as it pleads poverty to international creditors, Pakistan’s military arsenal continues to grow. Despite the fact that a nation whose GDP is hovering around just $236 billion annually and the country scrambles to pay for fuel, food and foreign debt, its stockpile of fighter jets, drones, submarines and warships continues to grow.
So how does a cash-strapped country keep buying bombs?
Over 80% of Pakistan’s military imports now come from China. Its support goes beyond arms. It extends generous credit lines with lenient terms – low interest rates, extended grace periods and repayment schedules that stretch over years. This financing strategy allows Islamabad to procure cutting-edge military gear without the immediate need for cash.
Pakistan also benefits from an unusual internal structure – a military establishment that is said to be economically self-sufficient. Through a vast commercial empire encompassing farmland, cement factories, investment firms and housing projects, Pakistan’s armed forces generate its own revenue. Much of it goes beyond the scrutiny or control of the civilian government.
This “state within a state” model enables the military to operate with financial autonomy, even as the rest of the country faces austerity and borrowing.
International support historically has further enabled this paradox. Since 1948, the United States alone has funneled $40 billion into Pakistan through military and economic aid. Factoring in contributions from the United Kingdom, Europe and Canada, the figure surpasses $55 billion. But the returns on this investment have been questionable.
“Pakistan never gave up its obsession with India. Every dollar just made the military stronger,” Haqqani said in the video, arguing that strategic fixation shaped how Pakistan spent its aid, not on development or reform, but on reinforcing military power.
Critics today warn that even IMF funds, meant for economic stabilisation and climate resilience, may end up indirectly supporting defense. In Pakistan’s opaque fiscal system, money is fungible and oversight is often weak. Despite repeated IMF conditions urging defense spending cuts and structural reforms, little progress has been made because Pakistan’s military controls everything – political leadership, resources and decision-making. And this grip shows no sign of loosening.
Haqqani’s old warning feels more relevant than ever: “Pakistan kept coming back to Uncle Sam every two years after abusing him because Uncle pays the bills.”
Uncle Sam may have been replaced by Uncle IMF in 2025. But the bills, and the bombs, are still very much part of the story.