Thu. Mar 28th, 2024

The United States President on Wednesday, told lawmaker that US is asking to seek “transparency” of the Chinese debt on Pakistan, which has recently reached to the International Monetary Fund (IMF) bailout package of about $12 billion.

During a Congressional hearing, under secretary of the treasury for international affairs David Malpass told lawmaker: “The IMF team just came back from Pakistan. One of the things we’re pushing hard for is full transparency of the debt.”

Senator Jeff Merkley, a member of the senate, asked if the IMF funds are being used essentially to help Pakistan repay Chinese debt, Chinese bank.

Senator from Oregon said, “Pakistan is a good example of a country that has a significant amount of Chinese investment. I think the number I have is USD62 billion. They owe a lot of money back to China, Chinese banks, and they’re seeking an IMF bailout. I think it’s a $12 billion bailout. They have asked the US to make sure that we don’t block this.”

Merkley asked, “Is that IMF money essentially going to help Pakistan repay Chinese banks? Why is that a good economic development strategy?”

Merkley further stated, “One of the challenges is they (China) haven’t disclosed the terms of–in many cases, they haven’t disclosed the terms of that debt. That means the interest rate, the maturity, and when it would have to be repaid.”

While responding to a question on this matter, Malpass said, “We think that the maturity of the Chinese debt, comes after the IMF would have been repaid.”

Malpass further stated: “So, from the standpoint of IMF money being used to pay Chinese money, I would say a challenge is to find a program that will cause substantial economic reform in Pakistan and that will allow it to be funded, that Pakistan be funded and have an ability to survive in financial terms going forward.”

Terming that it’s not a big deal or unique to Pakistan, Malpass said, “China is lending in many countries where the terms of the loans are simply not given, and that gives China a lot of leverage within its program and it’s something that we’re pushing back on very hard in the Paris Club, in the OECD, in the IMF, the World Bank, at the G20 and in the G7.”

Speaking about Chinese nature on giving loans and showing concerns over the Chinese debt model, Malpass said, “They’re not made public, they’re not available to the international committee, but sometimes they’re not even available to certain parts inside the government itself. That’s an issue because China may make a loan, but not really want the terms of the loan to be disclosed even within the government that it’s lending to.”

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