The United States has said it will review Pakistan’s bailout request to the IMF from all angles, including the country’s debt position, as it appeared to have held the huge Chinese debt responsible for it.
“We understand that Pakistan has formally requested assistance from the International Monetary Fund (IMF). In all cases, we examine that closely from all angles of it, including Pakistan’s debt position, in evaluating any type of loan programme,” State Department spokesperson Heather Nauert told reporters at a news conference Thursday.
This is something the United States has been tracking fairly closely.
“The secretary had spoken about this a few months back, I know, in some interviews not that long ago. I think part of the reason that Pakistan found itself in this situation is Chinese debt, and the fact that there is debt that governments have incurred that they maybe thought wouldn’t be so tough to bail themselves out of, but has become increasingly tough,” Nauert said in response to a question.
The State Department response on Pakistan’s IMF bailout request appeared to be in sync with the statement made by IMF Managing Director Christine Lagarde.
Responding to questions on this issue in Bali, Indonesia, Lagarde said she would require absolute transparency on Pakistan’s debts, including those owned by China.
“In whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, and terms of the debt that is bearing on a particular country,” she said.
“To really understand the extent and composition of that debt, both in terms of sovereign, in terms of state-owned enterprises and the likes of it, so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a programme,” Lagarde said.