Pakistan in economic crisis! Now, ally China endorses IMF bailout demand but warns this

By: | Updated: October 16, 2018 5:51 PM

As Pakistan is looking for a bailout package from the International Monetary Fund (IMF) amid cash crisis, close ally China has endorsed the decision; however, cautioning that it should not impact the bilateral relationship between Beijing and Islamabad.

Pakistan's Finance Minister Asad Umar said on Sunday that the country is ready to share debt related details of the CPEC project (Image: Reuters)Pakistan’s Finance Minister Asad Umar said on Sunday that the country is ready to share debt related details of the CPEC project (Image: Reuters)

As Pakistan is looking for a bailout package from the International Monetary Fund (IMF) amid cash crisis, close ally China has endorsed the decision; however, cautioning that it should not impact the bilateral relationship between Beijing and Islamabad. Pakistan, which has a current year debt repayments of about $9 billion, has agreed to share details of loans obtained for the China-Pakistan Economic Corridor (CPEC) project with the IMF.

“As a member of the IMF, China supports the organisation having cooperation with Pakistan in objectively and professionally evaluating the situation on the ground in Pakistan,” Chinese Foreign Ministry spokesman Lu Kang said on Tuesday. China is heavily invested in Pakistan through its ambitious CPEC project and does not want it to get affected due to the bailout.

Pakistan’s Finance Minister Asad Umar said on Sunday that the country is ready to share debt related details of the CPEC project while formally seeking the IMF bailout package, news agency PTI reported. Last week he had said that the country would be asking for a bailout package of $6-7 billion to address the mounting balance of payments crisis faced by the cash-strapped country.

However, now China has warned of any action that might undermine its bilateral relationship with Pakistan. .”..Also, we support the IMF (helping Pakistan) in coping with the current difficulties. Their measures shall not affect normal bilateral cooperation between China and Pakistan,” Lu said.

A team from IMF will be visiting Pakistan in the second week of November to negotiate the terms of the bailout, which is likely to span over a three-year period, Umar said after meeting Managing Director Christine Lagarde in Indonesia.

Earlier this year, an assessment by the State Bank of Pakistan and the finance ministry revealed that the country needed $11.7 billion to service its external debts in FY19. The government of Pakistan reportedly explored all options including asking for financial support from friendly countries and overseas Pakistanis before seeking the bailout package.

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