So now Washington is threatening the IMF. That’s a new one, as it’s typically used as a tool by Washington to keep tight reigns over cash strapped countries, and to push America’s foreign policy agenda. Mike Pompeo went on television to issue threats that any moneys loaned to Pakistan by the IMF ‘must not go straight from Pakistan to China’.
Express reports:
US SECRETARY OF STATE Mike Pompeo warned the International Monetary Fund (IMF) that any bailout money given to cash-strapped Pakistan must not be used to pay off Chinese debts.
Mr Pompeo dramatically told American TV station CNBC that IMF bailout money must not go straight from Pakistan to China.
He warned: “Make no mistake. We will be watching what the IMF does.
“There’s no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself.
A total of 189 countries are members of the IMF which aims to boost the world economy.
Pakistan currently has around $5billion (£3.8billion) worth of loans from China.
Much of this has been used to fund major infrastructure projects.
The Financial Times has reported Pakistan could be about to ask for an IMF bailout of up to $12billion (£9billion).
Key Trump administration figures are angry China is leaving some developing countries with so much debt.
They fear China is using loans and debt to gain influence over poorer states.
During the CNBC interview, Mr Pompeo implicitly criticised China saying: “We’re not looking for dominance.
“We’re looking for partnerships. Others choose to behave differently.”
He added: “We want these to be commercially available projects led by the American private sector.”
It is claimed Imran Khan, the cricket legend who won last weeks Pakistani election, will see a bailout as soon as he forms a government.
Mr Khan’s PTI party has 115 seats in parliament, 22 short of a majority, meaning it will need to enter into a coalition.
Pakistan’s economy is currently struggling due to falling exports whilst rising oil prices make imports more expensive.
The country has foreign reserves of $9billion, not enough to pay for imports over the coming months.
A Pakistani Finance Minister figure told The Times: “Pakistan desperately needs financial help and at the moment an IMF bailout is a possible option.”
With China currently positioned in the American policy psyche as a ‘threat’ and foe in a trade war, Washington doesn’t want to see any money go into the Chinese coffers if they can help it. That’s why a bailout paid to Pakistan is a concern for them. They’re afraid that Pakistan will pay some of their debts to China with bailout funds received from an IMF loan. And America thinks that it is in a position to tell everyone else what they can and cannot do, what debts they can pay, and to whom, and with what moneys. It’s quite brazen. All while Pompeo says that it’s not about dominance.
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