IMF may seek details of Chinese debt before processing Pakistan’s bailout request

October 11, 2018

The International Monetary Fund may seek details of Chinese debt on Pakistan before processing a request from the government for a possible bailout package.

“We need to have a complete understanding and absolute transparency about the nature, size and terms of the debt that is bearing on a particular country,” IMF MD Christine Lagarde told reporters in Bali.

A Pakistani delegation led by Finance Minister Asad Umar is in Indonesia to negotiate a possible bailout package after Prime Minister Imran Khan gave his finance team the green signal to begin negotiations with the Fund.

An IMF team will visit Islamabad in the coming weeks to discuss a possible IMF-supported program, the IMF said in a statement.

Related story: CPEC didn’t cause Pakistan’s debt burden: China

“This issue of debt transparency and an appropriate understanding of debt are not only going to apply to Pakistan. It has to apply to all countries,” she said.

In July, US Secretary of State Mike Pompeo voiced concerns over any IMF bailout being used to repay Chinese loans to Islamabad.

“There’s no rationale for IMF tax dollars — and associated with that, American dollars that are part of the IMF funding — for those to go to bail out Chinese bondholders or China itself,” Pompeo told US television station CNBC.

China has already clarified that Pakistan’s debt burden was not caused by CPEC or related projects.

“The IMF Working Group has clearly pointed out that the construction of the China-Pakistan Economic Corridor will help promote the development of the Pakistani side in the long run,” Chinese foreign ministry’s spokesperson Lu Kang said.

 
 

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