Pakistan has no Chinese debt problem: Finance minister designate Asad Umar
ISLAMABAD - PTI leader Asad Umar, the incoming finance minister of Pakistan has said that Pakistan would need $12 billion in loans - at the very least - just to keep itself afloat.
Umar will have his task cut out.
Inheriting an economy in absolute shambles would be a massive challenge for Imran Khan and his cabinet ministers and all eyes would primarily be on what Umar does. The former head of Pakistan's Engro Corporation said a recent interview to Bloomberg that the loan amount urgently needed would be in the range of $10 billion and $12 billion. He went on to say that the country would need something extra from thereon to move away from the edge. "The decision needs to be taken in the next six weeks, the further you go forward the more difficult, the more expensive the options become," he is quoted as saying.
Pakistan's economy is indeed crumbling.
Rising imports and the volatile oil markets have greatly hurt the country, especially because its exports - mainly textiles - have only seen a trickle of a rise. Relations with the United States are sour and there are accusations of China following an opaque policy towards OBOR in Pakistan.
It is most likely that once Imran Khan and his ministers take oath on August 11, Pakistan would rush to the International Monetary Fund (IMF) for a bailout package that could be to the tune of $12 billion. The last time the country turned towards IMF was in 2013 when it got a $6.6 billion loan for a crisis of lesser proportions than the one existing now. This time, the US could act as a roadblock as well, further complicating the matter.
That China and Saudi Arabia could help is being predicted but loans from either or both could come with riders. But Umar in his interview negated any fears when it comes to Beijing, stating that 'Pakistan has no Chinese debt problem.'