IMF delays multi-billion aid to debt-ridden Pakistan

Islamabad [Pakistan], Apr 15 (ANI): The International Monetary Fund (IMF) would delay the bailout package to debt-ridden Pakistan as the global money lender has sought details about China-Pakistan Economic Corridor (CPEC), and demanded a written guarantee that it will not use the aid to repay Chinese loans, government officials said on Monday.
Dawn reported that Pakistan is seeking USD eight billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.
Earlier this month, Finance Minister Asad Umar had said that the IMF mission would visit Islamabad by the end of this month soon after the ongoing spring meetings with the World Bank Group and the IMF are concluded. During the visit, the IMF was also expected to sign an agreement with Pakistan for finalising the bailout package.
Quoting official sources, the Pakistani daily on Monday said that the visit of the IMF mission to Islamabad may be delayed as both sides are still engaged in an "intense discussion" on the final details of the deal.
“So, the IMF mission is now more likely to visit Islamabad in May, not April,” the sources told Dawn.
The Finance Minister, who led the Pakistani delegation, went to New York on Friday but few of the senior officials from the ministry, stayed in Washington for further talks.
Addressing a press conference in Washington last Thursday, Asad noted that the two sides (Pakistan and IMF) had “more or less, reached an understanding” on the bailout package and “in a day or two, we hope to reach a full agreement.”
“Islamabad still hopes to conclude the agreement before June, as they believe the bailout package would help budget prospects,” another source familiar with Pakistan-IMF talks told Dawn.
If the deal is concluded, this would be the 14th IMF aid package for Pakistan.
The sticking points, however, are the demands for market-determined exchange rates and sharing details of Chinese loans, which Pakistan is reluctant to do so.
Last week, three US lawmakers urged the Trump administration to oppose the proposed multi-billion bailout package arguing that the country could probably use the aid to repay its Chinese debt.
In addition, the global money lender insisted Islamabad on disclosing all financial cooperation with China, including assistance related to infrastructure development, nuclear power plants, joint manufacturing of JF-17 Thunder fighter jets and procurement of submarines.
The IMF also demanded details of more than USD 6.5 billion of commercial loans which Pakistan had received from China in the past two and a half years. In July, China also deposited USD two billion with the State Bank of Pakistan.
Meanwhile, both sides are engaged in “fine-tuning” the details of the proposed IMF programme. Pakistan wants the IMF to review some of the conditions it has attached to the package while the IMF insists that those conditions are absolutely essential for successful completion of the programme.
Pakistan wants the IMF to focus on the long-term structural reforms that help revive its economy instead of attaching conditions that would be difficult to implement.
The finance minister is likely to visit China on April 25 for talks on the IMF concerns over CPEC and IMF will wait to hear from him before it finalises the bailout package, the sources said. (ANI)