United States should worry about its own debts to China, says Pakistan’s next finance minister

Pakistan Tehreek-e-Insaf (PTI) leader Asad Umar has said that the United States should pay heed towards paying off its own loans to China instead of worrying about Pakistan.

Umar, set to be Pakistan’s next finance minister under Imran Khan’s premiership, told the media on Saturday that he categorically rejected US secretary of state Mike Pompeo’s statement pertaining to capital from the International Monetary Fund (IMF) being used to pay off Pakistan’s debt to China.

He said the PTI government will bring all China-Pakistan Economic Corridor (CPEC) agreements to the fore to show no such issue will take place.

“One friendly advice to the Americans, we’ll worry about our Chinese debt, but I think they better handle their own Chinese debt first,” Dawn quoted him as saying. “We have a serious external debt problem, I’m not saying we don’t, (though) we don’t have a Chinese debt problem.”

Umar said Pakistan is facing a conundrum in the guise of foreign loans and the country needed to decide from where to “conjure up” $10-12 billion dollars within the next six weeks. “Either the nation can go to the IMF or friendly countries or sell bonds to overseas Pakistanis and raise the amount,” he added.

Pakistan is expected to seek a bailout of about $12 billion from the IMF or China to avert a currency crisis. China has pledged $57 billion in loans for CPEC, deepening economic ties at a time when relations between Pakistan and the US are fraying over Islamabad’s action against terrorists.

Pompeo has said that the US will be “watching” what the IMF does. “There’s 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,” Pompeo had said.

Pakistan has said that concerns that any new IMF bailout for the country could be used to repay Chinese debt is “totally wrong”.

On Saturday, Umar, while explaining the economic policy of the incoming government, said that privatisation of state enterprises is not the answer.

“Neither Pakistan International Airlines nor Pakistan Steel Mills will be privatised,” he said, adding that PTI will turn government companies into wealth funds so that they cannot be politically influenced.

“Currency alignment should be decided by the state (central) bank based on economic fundamentals, not by finance ministry based on political considerations. I don’t think the IMF wants free-float for Pakistan, it’s such a thin market,” Umar added.

“To make businesses more competitive with regional countries, the new government plans to decrease taxes on energy supply factories and agriculture. We will cover up the lost revenue by introducing a wealth tax,” he said.

First Published: Aug 05, 2018 22:09 IST