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Pakistan to share CPEC debt details with IMF

IMF chief Christiana Lagarde has made it clear that the IMF would require absolute transparency on Pakistan’s debts, including those with the CPEC.

, ET Bureau|
Updated: Oct 16, 2018, 07.13 AM IST
NEW DELHI: Cash-strapped Pakistan in a desperate move has announced that it is ready to share details of its debt related to the China-Pakistan Economic Corridor (CPEC) with the IMF following tough talk by the Trump administration on bailout package.

Pakistan is ready to share details of the debt related to CPEC with the IMF, Finance Minister Asad Umar said on Sunday following the US decision to review loans that Islamabad has got from China.

The IMF team is scheduled to arrive in Pakistan on November 7 to negotiate the programme which is likely to span over three days, Umar said. He, however, said Pakistan's current year’s debt repayments were about $9 billion, but it would not entirely be available from the IMF.

Umar admitted that the government will have to take tough decisions that would be painful for the people but are necessary under international commitments.

IMF chief Christiana Lagarde has made it clear that the IMF would require absolute transparency on Pakistan's debts, including those with the CPEC where over $60 billion is being invested.

The IMF, Umar admitted, had asked for details of loans, including the ones secured in relation to the CPEC projects, for analysing the debt sustainability. Pakistan would share "normal debt-related information about CPEC with the IMF", the minister noted.

CPEC is the flagship project under China's BRI and it remains to be seen how Beijing reacts to Islamabad's move to declare CPEC-related debts.

The Trump administration has alleged that part of the reason that Pakistan's economy is in such a state is due to its Chinese debt. The US is the largest contributor to the IMF and has 17.68% of voting rights in major decisions.

"We understand that Pakistan has formally requested assistance from the IMF. We examine all cases closely, including Pakistan's debt position, in evaluating any type of loan programme," State Department spokesperson Heather Nauert had said on Saturday, adding this is something the US has been tracking fairly closely.

"The secretary (of state Mike Pompeo) had spoken about this a few months back. I think part of the reason that Pakistan found itself in this situation is the Chinese debt, and the fact that there’s debt that governments have incurred that they may have thought wouldn't be so tough to bail themselves out of, but has become increasingly tough," said Nauert.

Unlike in 2013, the global environment is not favourable to Pakistan that’s why the government deliberated upon this matter before approaching the IMF, said the Umar, adding Pakistan was facing a financing gap of $ 12 billion this year. "We will turn to friendly countries again if the IMF terms are unacceptable to Pakistan."

He also claimed that Saudi Arabia, China and the United Arab Emirates had not placed tough conditions for bailing Pakistan out.

Without disclosing the exact numbers, Umar admitted that Pakistan's net foreign currency reserves were far below than the current gross level of $8.3 billion.

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