Three US lawmakers have urged the Trump administration to oppose the IMF bailout Pakistan is seeking to tide over a foreign exchange crisis arguing Islamabad will use it to pay off debt it owes China under the China-Pakistan Economic Corridor projects.
“We write to express our deep concern over attempts made by the Government of Pakistan to seek a bailout deal with the International Monetary Fund to retrieve debts incurred from predatory Chinese infrastructure projects,” the lawmakers, Republicans Ted Yoho and George Holding and Democrat Ami Bera, wrote to secretaries Michael Pompeo and Steven Mnuchin in a joint letter last Friday.
Pakistan owes China billions under the project, a figure that has ranged from $10 billion to $40 billion; Beijing has disputed the higher figure. Islamabad has asked the IMF for a bailout package to tide over a foreign exchange crisis, and discussions are on over conditions.
The United States can determine the outcome of these talks as the largest contributor — 17% — to the IMF kitty of $475 billion. And US secretary of state Mike Pompeo has already made it clear that Pakistan will not be allowed to use the bailout package to pay off Chinese loans. This was reiterated by David Malpass, a senior treasury official who has since been named to head the World Bank, at a congressional hearing this past week.
The US has also sought to link the IMF package to Pakistan meeting its obligations as laid out by the Financial Action Task Force, which tracks and tackles money laundering and terrorism funding.
{{/usCountry}}The US has also sought to link the IMF package to Pakistan meeting its obligations as laid out by the Financial Action Task Force, which tracks and tackles money laundering and terrorism funding.
{{/usCountry}}The lawmakers cited Sri Lanka as an example of China’s predatory debt-trap diplomacy. Colombo has had to hand over a port made with Chinese loans to the Chinese for 99 years because it’s unable to pay off the debt.