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ISLAMABAD: US Secretary of State Mike Pompeo assured Pakistan last week Washington would not try to block any request for a bailout from the International Monetary Fund (IMF), Information Minister Fawad Chaudhry said on Tuesday.
The remarks, which the minister said Mr Pompeo made during his visit to Pakistan on Wednesday, came in stark contrast to the US secretary’s warnings in July that the United States had serious reservations about the IMF giving money to Pakistan due to concerns Islamabad would use the cash to pay off Chinese loans.
Those comments rattled Islamabad, which is facing a financial crisis and may have no option but to turn again to the IMF to prop up its foreign currency reserves.
Mr Chaudhry said that relations between the United States and Pakistan were “broken” before Mr Pompeo’s trip to Islamabad but the visit had “set many things straight” and re-invigorated ties.
“He assured Pakistan that... if Pakistan opted to go to IMF for any financial help, the USA will not oppose it,” he said.
The US embassy in Islamabad did not have any immediate comment on the matter.
The government of Prime Minister Imran Khan, who took office in August, is trying to avert a currency crisis caused by a shortage of dollars in an economy hit by a ballooning current account deficit and dwindling foreign currency reserves.
Pakistani officials say they are discussing taking drastic measures to avert seeking a bailout from the IMF, which has come to Pakistan’s rescue 14 times since 1980, including most recently in 2013.
Pakistan’s relations with the United States have soured in recent years over the war in Afghanistan. Ties dropped to a new low when President Donald Trump in January accused Pakistan of “lies and deceit by playing a double game on fighting terrorism”.
Islamabad denies aiding militants in Afghanistan and lashed out against Mr Trump’s remarks, which were followed up by Washington suspending US military aid.
At the United States’ urging, a group of Western countries in February convinced a global body to put Pakistan on a terrorism financing watch list, a move that triggered concerns the United States might also seek to block Islamabad in other forums.
In July, Mr Pompeo said there was “no rationale” for the IMF to bail out Pakistan. His worries that Islamabad would use the IMF money to pay off Chinese loans echoed concerns by other US officials that China was saddling many emerging market countries with too much debt. Beijing staunchly denies such claims.
But during last week’s visit Mr Pompeo said he was hopeful of “a reset of relations” long strained over the war in Afghanistan.
Published in Dawn, September 12th, 2018
Comments (65) Closed
Great! Fingers crossed that there isn't a u-turn on this statement somewhere down the line..
Simply its a confirmation about going to IMF.
Forget Pompeo, what is your own plan? What operative plans you had prepared in anticipation of your accession to power? It seems no working paper was prepared. What is your justification of increasing cabinet especially hiring cabinet without the allocation of portfolio? Let me be productive here. 1: terminate all ambassadors including UN rep. Scale down all embassies 1 open dollar account with strict promise and guarantee of no control and strict integrity 2: stop all imports of all kind 3 Give complete and unobstructed access to all Afghan trade 3 triple all the taxes on tvs: 4 all military secretaries go back to army 5: give PIA, Railways and steel mill to private sector: give Karachi circular to private sector7 stop all imports of luxury goods,6: cut down all special appointments, cabinet members, advisors—your cabinet should barely fit in a small room: 7 combine all ministries and divisions not more than 10: do your best to do trade with India on a barter system, more later.
A high school kid can talk smarter than this fellow. US never said it will block... just not use the money to pay China loans instead use for Pakistan only
There could be an oversight comittee to ensure the loan money is spent on the people.
Why go to IMF when Pskistsn can ask their Chinese neighbour . USA will not block Pakistan request but will not support it either
Sorry, it is difficult to believe you, especially you, after the Atif Mian fiasco.
Do You mean a U turn by US foreign minister?
Fawad is bluffing
What a relief. This is what we want
Don't trust a word he says
Not sure what are we facing here? Imran Khan used to say US aid is a curse to Pakistan and Fawad Chaudhry is proudly announcing US will be pumping AID to Pakistan ?
This made me smile and will keep me smiling rest of day....this was same party whose leader was promising his nation that ...I would die but will never go to IMF....and now they are celebrating and considering their triumph to get permission to IMF. .....What a double standard.....
Why should USA? The IMF bailout is in the favorable tool for USA. Pakistan will be in more problem because of this bailout package by IMF. The conditions will be really horrible. So don't be so happy.
Imagine what you would have compromised with Pompeo to get the IMF funds.
It is the job of Finance Minister to deal with IMF issue; why Interior Minister is getting involve; he should worry about his own job.
It is hard to have faith in such utterances
There was no press release when he was met PM IK.
I appreciate the hard work which PTI is doing and hope they will avoid going to IMF. It will give confidence to our country that we can survive without loans. It will put us and teach us to live within our means.
Pompeo never said US will block IMF loan for Pakistan. This is yet clear indication that Pakistan is going to IMF. It is better Finance minister issued statements concerning finance matters and not the information minister.
Another u-turn coming up!
IMF option is and should be the last resort option. IK govt should try to take every measure to avoid IMF. Actually it is in US interest to have Pakistan under IMF conditions to further pressurize them and Pompeo when noticed that IK govt is seeking other options, he quickly changed his tone regarding IMF for Pakistan.
@saksci
He just informed us regarding this development being info minister. Going to IMF or not is the job of Asad Umer and IK.
@Wahab It may be a longish wait Wahab saheb.
Pompeo said US won’t block Pakistan plea for IMF bailout: Fawad... but who have a say so.... definitely not Pakistan... and who controls IMF... His statement means nothing just a diplomatic approach... For diplomacy to be effective, words must be credible - and one can now doubt the word of America. especially when D T is in charge...
Best of luck Pakistan!
Dead sure China will not help a bit to bailout but will wait for IMF response.
No way out. This will only be to service the existing loans. the previous gov have created this mess and have left a mountain of debt behind. Cant expect pti to sort this out in 2 weeks.......c'mon guys you have to give them some time. National debt is a humongous issue facing the country plus the dams.
Even if IMF refuses to lend Pakistan money, Imran Khan could go to overseas Pakistanis. If overseas Pakistanis could send at least $1000 a week for the next 5 year. then Pakistan could come out of recession.
Great
We will let Pompeo know our thoughts on this. Bad Idea.
The United States Government should decide about releasing all types of blocked funds to Pakistan, most importantly the US $300 Million which have been held back recently.
Stay far far far away from IMF!
Most times in foreign diplomacy silence is far more valuable than just talk.
@BANGASH It is regarding IMF loan and not US Aid.
It is great that Government i still looking for alternative instead of loan from IMF.
yup in case you shut down CPEC Project.
Pakistan must avoid IMF bailout.
The present Government is faced with financial crisis as the state is under heavy debts because of plunders by the previous rulers and they are looking for the possible solutions to run the affairs of state. Instead of criticizing them it will be better to suggest them ways and means to overcome this difficult situation.
@RUMI "Even if IMF refuses to lend Pakistan money, Imran Khan could go to overseas Pakistanis. If overseas Pakistanis could send at least $1000 a week for the next 5 year. then Pakistan could come out of recession."
Wow! What idea! Do you what is $1000 per week? Even if overseas pakistanis had that kind of money to spare, do you think they would throw away their hard earned money?
@Malik you sound like you ‘know it all’. Mr know it all.
@J marfatia U Turns are for avtive people - consistency is for inactive minds.
So an IMF Bailout is still necessary??
No help from the Chinese friends, Saudi brothers or other Oil rich kingdoms??
Sure.but we need to know what did you commit to that he wont block it.
Is IMF giving him some money to pay his taxes?
Why there was no joint press conference like it was done in India?
So they want you to remain in debt.
Before asking overseas Pakistanis, why dont you pay your taxes first? I am not giving donations for it to be squandered. Where is a plan? An economic strategy?
Just my observation,i find that this government is making lot of bold statement with no back planning.Bold statement to settle down the nerves of the people rather then doing some ground work,taking some real hard decisions and informing the public. However i may be wrong and only time will tell.
US would not want Pakistan to fall completely in the Chinese camp hence they are not going to oppose an IMF bailout for Pak. They will let it be with stringent conditions thats for sure
@RUMI Do you really believe that overseas Pakistanis are all so well to do to send 1000$ a week? Even all those living in US, UK or Canada are not that well off to be able to send that kind of money. Do you think all those taxi drivers and people working in convenience stores or petrol pumps earn that kind of money. And for those doctors engineers and chartered accountants earning big money will they take the risk of sending their money into a blackhole?
Hope this at least is true.
@AKB "The present Government is faced with financial crisis as the state is under heavy debts because of plunders by the previous rulers" The present government is faced with financial crisis because it doesn't have a plan to reverse that crisis, or is not ready to implement it.
I think Mile Pompeo met FM SMQ and had detail discussion. This announcement must be made by SMQ and not by Fawad Chaudhry. Finally IK will also go to IMF for bailout, because chinese FM asked for money during his recent visit to pakistan.
One thing is sure, IK is just a PM without any knowledge as to how to run the country. Only big big statements without any pilicy in hand. Enjoy ur 5 years.
Stop immediately imports of all luxury and unnecessary goods (cars, food, phones, cosmetics, clothes and others) for the next 3 years. Ban money exchange businesses for the next 5 years.
Recover looted money immediately. Be strict to NAB criminals under investigation. Handcuff them.
Only allow import of machinery for industry.
Let us determine NOT to take more loans from IMF and World Bank.
See some very interesting and polarised responses to this statement. Some feel the govt should already in a couple of weeks have turned the economy around so we would not have to go to the IMF. Some feel before coming to power they shouldve done their homework. Its true at times IK sounds as if he has a magic wand in his hand but the reality is that is not the case. We have to give them some time to come up with a short term and long term plan. Then we can choose to critique. I believe the short term plan is being brought to parliament in a couple of days whereas the long term plan is work in progress. Hopefully good things are around the corner. Those who feel PTI should already have a plan in place need to understand that before coming into power you dont have access to the information and the experts running the show.
@Ravi what's that? oh, it doesnt matter because it's fake news! (whatever it means)
Fire this guy.
US says one thing but at the same time does the opposite. They would want IMF to take hold of Pak economy as they try with other countries.
@javed "Stop immediately imports of all luxury and unnecessary goods (cars, food, phones, cosmetics, clothes and others) for the next 3 years. " No need to stop imports. Make them pay in foreign exchange with proof that it was earned abroad or by export of manufactured products, and impose heavy duty.
USA AND ISRAEL love to see Pakistan in IMF trap rather than to go and get any other loan. Pakistan should increase industrial production and build infrastructure of Pakistan. IMF is always with conditions and goes in non productive expenses.
Why to go to IMF?.This was not PTI agenda.
transcript coming soon.
1-Reduce Imports to match exports 2-Revise CPEC, so that Pakistani workers are employed first, only hire advisors from China with view to transfer technology. Unfortunately there was no progress or even mention of revision during Chinese FM visit, instead it seems we have agreed to do more? 3-Have incentives for Pakistanis overseas to return and retire in Pakistan. For this you need peace and rule of law. Medical facilities, assurances in writing to be allowed to return with their money if things don't work out. There are thousands of Pakistanis looking for a place to retire but a peaceful place. 4-Review of foreign exchange trading, must trace large transfers (over $10000) as in most countries. 5-Simplify and regularise property buying to minimize crime in such transactions.