United States is seeking transparency of the Chinese debt on Pakistan, which has reached out to the International Monetary Fund (IMF) for a multibillion-dollar bailout package, the Trump Administration told lawmakers.
“The IMF team just came back from Pakistan. One of the things we’re pushing hard for is full transparency of the debt,” Under Secretary of Treasury for International Affairs David Malpass told lawmakers during a Congressional hearing.
Malpass was responding to a query on Pakistan-specific Chinese debt from Senator Jeff Merkley during a hearing of the Senate Foreign Relations Subcommittee on Multilateral and International Development, Multilateral Institutions, and International Economic Energy and Environmental Policy.
Senator Merkley, a ranking member of the subcommittee had asked if IMF funds are essentially being used to repay Chinese debt.
“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,” the Senator from Oregon said.
“Is that IMF money essentially going to help Pakistan repay Chinese banks? Why is that a good economic development strategy?” Merkley asked.
“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,” he said.