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Pakistan And IMF At Loggerheads Over CPEC Data : Global : Business Times
Pakistan is at odds with a visiting staff-level delegation from the International Monetary Fund (IMF) over the true extent of Pakistan's financial exposure under the China-Pakistan Economic Corridor (CPEC).
The IMF team consisting of members of the Lending Policy Division wants access to contract details of CPEC projects as a prelude to a proposed bailout package. It raised the issue of the CPEC deals during a recent meeting with the Ministry of Planning and Development (MPD).
Instead of detailed reports about CPEC projects, however, what the IMF got from the Pakistanis was an "overview of the macroeconomic outlook and progress on the CPEC initiative," according to sources privy to the talks. The Pakistani panel negotiating with the IMF is led by Federal Minister for Planning, Development and Reform Makhdoom Khusro Bakhtiar.
The IMF staff-level delegation led by Mission Chief Harald Finger is ostensibly sizing-up Pakistan's macroeconomic situation. It seems keen on finding more about the contract agreements of energy projects under CPEC. Bakhtiar, however, didn't release any information, saying that only the Ministry of Energy can do so.
The IMF seems particularly concerned about Pakistan's ability to service its massive debt associated with CPEC. In 2016, it conducted an in-depth report of CPEC as part of Article-IV consultations.
The IMF report revealed that CPEC infrastructure and transport projects are financed by long-term concessional government borrowings from China. CPEC projects in the energy sector involve foreign direct investments and commercial borrowing from Chinese financial institutions, either by majority foreign-owned joint ventures or Chinese investors.
The size of the CPEC investments has ballooned to $60 billion from $46 billion (when CPEC got off the ground in 2014) due to the inclusion of new projects.
Pakistan has rejected criticism of its growing indebtedness to China on account of CPEC. It affirms its share of the CPEC loans is only $6 billion, or 6.3% of the total outstanding external debt of $95 billion as of June 30.
CPEC deals are "open and transparent," said a statement from the Ministry of Finance. In addition, the IMF delegation was informed that 22 projects worth $28.6 billion are under various phases of implementation in CPEC, said Hasaan Daud Butt, CPEC project coordinator.
Authoritative sources said the government of Prime Minister Imran Khan is under no obligation to reveal details of CPEC contracts to a third party such as the IMF, especially since without a formal arrangement with the IMF. They pointed out that disclosing Chinese financing deals under CPEC is one of the disadvantages of seeking an IMF bailout program.
Its worsening current account deficit almost ensures Pakistan will seek another bailout from the IMF. On Sept. 27, Pakistan shared revised economic growth estimates and other macroeconomic indicators with the IMF delegation visiting the country for week-long talks that might lead to a new bailout.
Economists said the IMF staff-level visit might be a prelude to formal bailout talks, but Islamabad has strenuously denied it wants another bailout package from the IMF to deal with its ballooning current account deficit.
Last week, the Khan administration lowered the country's GDP growth estimate to around 5.2 percent this year from the original target of 6.2 percent. It said a dearth of funds and low outputs in agriculture and manufacturing are among the reasons for the faster than an anticipated slowdown of the economy.
Economists said the deceleration of Pakistan's economy for the first time in six years will negatively impact job growth and the quality of life among Pakistanis.
The Khan administration is also said to be assessing options to arrange $11 billion in loans to deal with current account deficit problems. Among the options are the IMF bailout program; Chinese financial assistance and the purchase of oil on deferred payments from Saudi Arabia.
http://en.businesstimes.cn/articles/103611/20181002/pakistan-imf-loggerheads-over-cpec-data.htm
Pakistan is at odds with a visiting staff-level delegation from the International Monetary Fund (IMF) over the true extent of Pakistan's financial exposure under the China-Pakistan Economic Corridor (CPEC).
The IMF team consisting of members of the Lending Policy Division wants access to contract details of CPEC projects as a prelude to a proposed bailout package. It raised the issue of the CPEC deals during a recent meeting with the Ministry of Planning and Development (MPD).
Instead of detailed reports about CPEC projects, however, what the IMF got from the Pakistanis was an "overview of the macroeconomic outlook and progress on the CPEC initiative," according to sources privy to the talks. The Pakistani panel negotiating with the IMF is led by Federal Minister for Planning, Development and Reform Makhdoom Khusro Bakhtiar.
The IMF staff-level delegation led by Mission Chief Harald Finger is ostensibly sizing-up Pakistan's macroeconomic situation. It seems keen on finding more about the contract agreements of energy projects under CPEC. Bakhtiar, however, didn't release any information, saying that only the Ministry of Energy can do so.
The IMF seems particularly concerned about Pakistan's ability to service its massive debt associated with CPEC. In 2016, it conducted an in-depth report of CPEC as part of Article-IV consultations.
The IMF report revealed that CPEC infrastructure and transport projects are financed by long-term concessional government borrowings from China. CPEC projects in the energy sector involve foreign direct investments and commercial borrowing from Chinese financial institutions, either by majority foreign-owned joint ventures or Chinese investors.
The size of the CPEC investments has ballooned to $60 billion from $46 billion (when CPEC got off the ground in 2014) due to the inclusion of new projects.
Pakistan has rejected criticism of its growing indebtedness to China on account of CPEC. It affirms its share of the CPEC loans is only $6 billion, or 6.3% of the total outstanding external debt of $95 billion as of June 30.
CPEC deals are "open and transparent," said a statement from the Ministry of Finance. In addition, the IMF delegation was informed that 22 projects worth $28.6 billion are under various phases of implementation in CPEC, said Hasaan Daud Butt, CPEC project coordinator.
Authoritative sources said the government of Prime Minister Imran Khan is under no obligation to reveal details of CPEC contracts to a third party such as the IMF, especially since without a formal arrangement with the IMF. They pointed out that disclosing Chinese financing deals under CPEC is one of the disadvantages of seeking an IMF bailout program.
Its worsening current account deficit almost ensures Pakistan will seek another bailout from the IMF. On Sept. 27, Pakistan shared revised economic growth estimates and other macroeconomic indicators with the IMF delegation visiting the country for week-long talks that might lead to a new bailout.
Economists said the IMF staff-level visit might be a prelude to formal bailout talks, but Islamabad has strenuously denied it wants another bailout package from the IMF to deal with its ballooning current account deficit.
Last week, the Khan administration lowered the country's GDP growth estimate to around 5.2 percent this year from the original target of 6.2 percent. It said a dearth of funds and low outputs in agriculture and manufacturing are among the reasons for the faster than an anticipated slowdown of the economy.
Economists said the deceleration of Pakistan's economy for the first time in six years will negatively impact job growth and the quality of life among Pakistanis.
The Khan administration is also said to be assessing options to arrange $11 billion in loans to deal with current account deficit problems. Among the options are the IMF bailout program; Chinese financial assistance and the purchase of oil on deferred payments from Saudi Arabia.
http://en.businesstimes.cn/articles/103611/20181002/pakistan-imf-loggerheads-over-cpec-data.htm
