AUGUST 1, 2018
Pakistan on Wednesday rejected as “totally wrong” US concerns that any new International Monetary Fund (IMF) bailout for the country could be used to repay Chinese debt.
The finance ministry reacted strongly to US secretary of state Mike Pompeo’s warning on Monday that any IMF bailout for Pakistan’s incoming government led by Imran Khan should not provide funds to pay off Chinese lenders.
The ministry dismissed any move to link the China-Pakistan Economic Corridor (CPEC) with a potential IMF package. “It is totally wrong to link the IMF programme with CPEC,” said a spokesman of the ministry, reaffirming Pakistan’s full commitment “to undertake and complete CPEC projects in their totality”.
CPEC is important for Pakistan’s future development, and the government will continue to ensure that all projects are completed according to the agreed terms and within the stipulated timelines, the ministry said.
“Third parties cannot weaken our collective resolve to make CPEC a success story,” the ministry said while responding to a question on the implications of Pompeo’s remarks.
Pakistan is expected to seek a bailout of about $12 billion from the IMF or close ally China to avert a currency crisis. China has pledged $57 billion in loans for the CPEC, deepening economic ties at a time when relations between Pakistan and the US are fraying over Islamabad’s action against terrorists.
Asad Umar, the PTI leader tipped to be Pakistan’s next finance minister, did not rule out the option of availing an IMF bailout. However, he said no decision had been made as yet.
“We will be evaluating all our options and at this stage, we have not even decided to go to the IMF,” Umar told a Pakistani newspaper.
In fiscal 2017-18, China gave $4.5 billion in project and commercial loans and provided $1.5 billion as a trade finance facility. In 2016-17, China provided $3.9 billion in loans to Pakistan. This month, Pakistan has received a $2 billion commitment from China, of which more than $1 billion has already been disbursed, helping Islamabad meet its immediate foreign currency requirements.