NEW DELHI: Senior US Congressmen in a significant move have urged Secretary of State and Secretary to the Department of Treasury to prevent IMF bailout package to Pakistan as such can be misused by Islamabad to repay Chinese loans incurred under the China-Pakistan-Economic-Corridor (CPEC).
In their letter US Congressmen expressed deep concern over attempts made by the Pakistani government to seek an IMF bailout deal to relieve debts incurred “largely from predatory Chinese infrastructure projects”, ET has learnt. The letter was written by Congressman Ted S Yoho, Ranking Member Subcommittee on Asia, The Pacific and Non-proliferation, Ami Bera and George Holding was marked to Treasury Secretary Mnuchin and Secretary of State Mike Pompeo.
Referring to the fact that China is investing $ 62 billion for the CPEC, the US Congressmen noted that China’s debt repayment and profit repatriation terms are not transparent and have understandably raised concern within Pakistan. In this context the letter referred to China’s debt diplomacy in Sri Lanka and how Colombo was unable to pay debt for the Hambantota project.
Sri Lanka, finally handed over 15,000 acres of land, under heavy pressure from China, the letter further alleges. The impact of Chinese predatory funding in Pakistan on the lines of Sri Lanka cannot be ruled out, according to the Congressmen. They suggested there is a critical need for transparency in CPEC loans and contracts. Pakistan may use alleged IMF bailout package to repay China, the Congressmen felt.
The Congressmen raised queries on Pakistan’s history with IMF spread over a period of 30 years and Islamabad’s failure to carry out structural reforms and claimed that another bailout will only enrich China.
“It is critical that we continue to work to counter China’s attempts to hold hostage countries that are unable to repay unfavourable loans in an attempt to further their geo-strategic goals,” the letter read.