by Mehtab Haider
ISLAMABAD: Some Congress members have written letter to both US Secretary of State and Treasury for extending opposition to Islamabad’s attempt for obtaining IMF bailout package and stated that this amount could be used to pay back Chinese loans under CPEC initiative.
According to letter written by Ted S Yoher DVM Member Subcommittee on Asia and Pacific, Ami Bera Member of Congress and George Holding Member Congress to Steven T Mnuchin US Secretary Treasury and Michael R Pompeo US Secretary of State and stated that they write to express their concern over attempts made by the government of Pakistan to seek a bailout package from the IMF to relieve debt incurred largely from predatory Chinese infrastructure projects.
They stated that as you know China is investing $62 billion in Pakistan under China Pakistan Economic Corridor (CPEC) and its debt repayment and profit repatriation term are not transparent and have understandably braised concerns inside Pakistan. Illustrative of the dangers of China’s debt trap diplomacy, Sri Lanka became unable to make payments on the Chinese debt it had taken for the Hambantota Port Development Project.
Under heavy pressures from Chinese, Sri Lanka ultimately handed over 15000 acres of land around the port for a 99 years lease. Pakistan’s history with the IMF gives further cause for concern. Having spent 22 of the past 30 years in a dozen different IMF bailout programs, Pakistan has failed to carry out necessary structural reforms to address its structural economic problems. Another bailout that fails to provide transparency and address issues of balance of payment, high fiscal deficit, and unsustainable debt will again be doomed to fail instead enriching China.
It is critical that we continue to work to counter China’s attempt to hold hostage countries that are unable to repay unfavorable loans in an attempt to further their geostrategic goals. We greatly appreciate your attention to this matter and look forward to reply.
This letter is really critical at a time when Pakistan’s team led by Minister for Finance Asad Umar is going to attend the annual spring meeting of IMF/WB at Washington D.C from April 10 to 12. Pakistan has been entering into final stage of parleys with the IMF for striking staff level agreement within next 30 days.
There are some economists especially Dr Ashfaque Hasan Khan who had sternly opposed the IMF package arguing that it would be folded into tough condition on the dictates of US administration. Now the cat is out of the bag as the US Congress members have started lobbying into IMF against Pakistan’s possible package despite this fact that Islamabad had already explained before the IMF that Chinese debt possessed small portion in share out of total external loans and liabilities.