Pakistan Responds to US Resistance in IMF Rescue

Pakistani officials have criticized what they say are US attempts to use the impending economic crisis of the country to widen a gap between Islamabad and Beijing

. – Pakistan has cut billions of dollars of Chinese investment in its country 's infrastructure as part of a potential rescue package from the IMF.

A Pakistani government advisor told the Financial Times: "The United States is trying to ruin the greatest contribution to our future."

Another added, "The Americans are trying very hard to put pressure on the Pakistan because they have their own interests.But making Pakistan so difficult to negotiate a new program with the IMF makes no sense.In the end, Pakistan will look for other options if the road to the IMF is blocked. "

The Financial Times revealed this week that Pakistani officials had prepared plans to demand a $ 12 billion bailout from the IMF. as the country's new prime minister. Pakistan suffers from a severe shortage of foreign exchange reserves after years of heavy imports and low exports.

But even before Pakistan asks for it, there are signs of resistance from the United States.

Mike Pompeo, US Secretary of State, on Monday warned the IMF not to grant a bailout to Pakistan that would compensate Chinese investors in Pakistani projects.

Mr. Pompeo told CNBC: "We will monitor what the IMF is doing, there is no justification for the IMF's tax dollars, and badociated with those US dollars that are part of the IMF's financing. for those who will bail out Chinese bondholders or China itself. "

Mark Sobel, a former US representative to the IMF Mr. Sobel said:" The fund must have handy comprehensive data on all loans from the Sino-Pakistan Economic Corridor [a showpiece Chinese infrastructure programme] – its terms, deadlines and parties involved. He added: "Otherwise, China should reschedule or reduce its loans, greatly reducing the value of its claims."

Beijing plans to invest about $ 60 billion in its southern neighbor as part of a broader plan by President Xi Jinping to establish a new Silk Road global trade routes. However, he declined to publish details of the terms of these loans.

While Islamabad says that the project will revolutionize Pakistan's infrastructure, there are signs that it creates short-term economic problems, with loan repayments reserves.

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Earlier this month, the Wall Street Journal revealed that Pakistan had fallen behind on some of its payments, including plans to build new power plants

. an IMF rescue plan for Pakistan. Geng Shuang, a spokesman for the Chinese Foreign Ministry, said when asked how the fund would treat Pakistan: "I believe that they will handle it properly."

But the United States asks China to publish the terms of its loans The CPEC loans, as well as the reduction of its investments and even their depreciation, could create a deadly conflict between Beijing and Washington. China is the second largest shareholder of the IMF, but has no veto over its decisions at the board level.

For now, China continues to keep Pakistan afloat with short-term loans. According to local reports, Beijing has agreed to lend an additional $ 2 billion to Islamabad since last week's elections, adding to the $ 5 billion borrowed by Pakistan from Chinese commercial banks in the previous fiscal year.