Pakistan dismisses US concerns over use of IMF funds

Pakistan’s economy has hit severe turbulence over the past year and most analysts expect the nation to seek a bailout, either from the IMF or closest ally China, to avoid a currency crisis. (Reuters)
  • Islamabad reaffirms commitment to completing China-Pakistan Economic Corridor projects
  • US Secretary of State Mike Pompeo warned that an IMF bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders

KARACHI: Pakistan has dismissed US concerns that it will use a potential International Monetary Fund (IMF) bailout to repay its debts to China.

US Secretary of State Mike Pompeo on Monday said: “We’ll be watching what the IMF does. 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.”

Former Pakistani Finance Minister Dr. Salman Shah told Arab News that Pompeo’s remarks are “embarrassing” for the IMF “because it gives the impression that it’s being run as per the wishes of the US.”

Dr. Waqar Masood, former federal finance secretary, told Arab News: “The amount received from the IMF isn’t used to pay off debts. The funds are meant to build up foreign exchange reserves. This money isn’t used by the government for budgetary purposes.”

Senior economist Dr. Ikram-ul-Haq described Pompeo’s remarks as a “cheap shot” and a “political statement,” saying: “IMF money goes to increase reserves.”

Pompeo’s remarks “will not affect the prospects of getting IMF support,” he added. “In fact, by saying this, the US publicly admitted that IMF operations are part of American foreign policy matters.”

Pakistan is seeking up to $12 billion from the IMF to support its ailing economy, which is facing a high current account deficit of $18 billion, mainly due to high import bills and insufficient exports and home remittances.

The country’s foreign exchange reserves have been exhausted. At $9 billion, they are not enough to cover import requirements for two months.

Pakistan held a general election on July 25, with Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party winning a majority of seats in the National Assembly.


Categories: Asia, Pakistan

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5 replies

  1. Patriotic people in Pakistan dont want Khan to go to IMF. Pakistan was pauper state at inception in 1947. In 1948 Pakistan manageda surplus budget. If Khan focuses with the assistance from a competent team Pakistan will see itself out of this quagmire. A lot of laundered money is lying outside Pakistan. Technically speaking that can be brought back.

    • I am not really a fan of Crown Prince Mohammad bin Salman, but in the case of the ‘Panama Papers’ and the billions of corrupt money ‘parked’ abroad I think it appropriate to ‘invite’ all the Panama Paper guys into a luxury hotel in Islamabad and keep them there until the funds are repatriated. Yes, no need of IMF, enough money is ‘somewhere’.

  2. The extremist Mullahs, hypocrisy and corruption of Political leaders have been destroying Pakistan. very sad, pity and embarrassing as a Islamic country. Pakistan is under the edge of brink of hell in 21th century.

    The right of minority have been destroyed too. Christian, Shiah, Ahmadiyya and Hindu live in fear every day. There is no freedom of religion, expression. People fear with Blasphemy law.

    Wait and see what Allah’s plan in Pakistan now?
    All love ❤️
    Ahmadiyyah through TMT has banned the freedom of expression, not allowed to criticize Ahmadiyya any more.
    Every comment has to be censored first by Rafiq ( edithor)
    Very sad indeed.

    • It is called ‘monitoring’. Practically all blogs and newspapers monitor the comments. Endless repetitions may be deleted, saving the readers from annoyance.

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