IMF chief seeks transparency for Pakistan bailout
NUSADUA, INDONESIA: The International Monetary Fund launched formal bailout talks with Pakistan on Thursday, and IMF managing director Christine Lagarde said she would require “absolute transparency” of Pakistan’s debts, including those owed to China.
She said such disclosures were necessary to determine the debt sustainability of countries seeking IMF loans. The requirements are likely to shine a spotlight on the extent, composition and terms of Pakistan’s debts to China for infrastructure projects as part of Beijing’s massive Belt and Road building programme.
China has pledged some $60 billion in financing to Pakistan for ports, railways and roads, but rising debt levels have caused Islamabad to cut the size of the biggest Belt and Road project by some $2 billion. “In whatever work we do, 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,” Lagarde told a news conference when asked about Pakistan’s debts to China.
The US has criticised China’s infrastructure lending, warning that it has saddled some developing countries with debts that they cannot afford to repay. US secretary of state Mike Pompeo has said there would be “no rationale” for an IMF bailout of Pakistan that pays off Chinese loans.
The United States has become increasingly impatient with what it sees as a lack of support from nuclear-armed Pakistan in quelling a Taliban insurgency that US-led forces are fighting in neighboring Afghanistan. Lagarde said that the IMF would need to know the extent and composition of the a country’s debt.