Pakistan Reaches USD 6.0 Billion Agreement with IMF for Bailout

Pakistan, last month, signed an agreement with Washington-headquartered International Monetary Fund (IMF) for a $6.0 billion bailout package, planned at improving its finances and supporting a sluggish economy, as attempts to overcome a surging balance-of-payments crisis intensify.

“Does treasury just do what they want for checking off some economic boxes or since this is the single most important thing we do with regard to Pakistan do they listen to you?” Congressman Brad Sherman asked.

“Our aid to Pakistan less than a decade ago was $2.0 billion a year; we now have cut it to $70 million. If I did the math quickly, I would just say that’s a 95.0% per cent reduction roughly. Pakistan, I think is very important to the security of the United States. There are those that argue that Pakistan is important because it’s close to Afghanistan and I think it’s just the reverse,” he said.

While the U.S. help is $70 million, the IMF loan is $6 billion. Further, China is investing heavily in Pakistan as a part of the nearly $60.0 billion China-Pakistan Economic Corridor (CPEC).

Further, Mike Pompeo, Secretary of State, in the past cautioned that any possible IMF bailout for Pakistan should not offer funds to return Chinese lender, maintaining, “We will be watching what the IMF does… there is 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”

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