International

US likely to oppose IMF bailout to Pakistan to repay Chinese debt

Prime News, International (Washington), December 13:- The US is making all efforts to ensure that any IMF bailout to Pakistan is not used to repay its Chinese debts, a senior Trump administration official has told lawmakers.

Cash-strapped Pakistan is seeking USD 8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy.

A recent meeting between the IMF and Pakistan ended in a stalemate.

The US feels that the huge Chinese debt was responsible for the economic challenges in Pakistan.

“We are working and making clear within the IMF that if it were going to supply any funding to Pakistan that it would not be used to repay Chinese loans,” David Malpass, Under Secretary of Treasury for International Affairs, told lawmakers during a Congressional hearing on Wednesday.

There are concerns among American lawmakers that the IMF money could be used to repay Chinese debt.

Malpass said that the US is also trying to make sure that Pakistan changes its economic programme so that it’s not a failure in the future.

During the House Financial Services Committee hearing on ‘Evaluating the Effectiveness of the International Financial Institutions’ Congressman Ed Royce said Pakistan is currently seeking a multibillion-dollar IMF bailout.

“In July, Secretary (of State, Mike) Pompeo said there’s no rationale for IMF tax dollars and those associated with American dollars that are part of IMF funding for those to go to bail out Chinese bondholders or China itself,” he said.

“We will make strong efforts, and I believe successful efforts, to make sure that what you describe doesn’t happen, meaning a payoff of Beijing via Islamabad,” Malpass said. (MR, Inputs: Agencies).

 

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