WASHINGTON – 16 US senators urged the Trump administration to block theInternational Monetary Fund (IMF) from bailing out the countries that haveobtained loans from China under its infrastructure development plan.
The letter to Secretary of State Michael Pompeo and Treasury SecretarySteve Mnuchin mentions Pakistan, Sri Lanka and Djibouti among the countriesthat have accepted billions of dollars in loans from China but are unableto repay.
The loans come from the $8 trillion Belt and Road Initiative (BRI) thatChina says is meant to develop infrastructure in friendly countries forlinking them to global trade routes.
But US senators disagree.
“We write to express our concern over bailout requests to the IMF bycountries who have accepted predatory Chinese infrastructure financing,”the 16 senators said in the letter they sent to the two secretaries earlierthis week. They claimed that China was using the debt to control thepolicies of the borrowing nations.
The IMF is an international lending institution and the United States isits largest contributor with some $164 billion in financial commitments. In2016, the IMF agreed to pay Sri Lanka a $1.5 billion bailout loan to coverdebts the country owes China.
Recently, reports in the international media claimed that Pakistan may soonseek up to $12 billion from the IMF to overcome a widening foreign exchangedeficit.
But media reports claimed that Pakistan may use that money to repay theloans it borrowed for the China Pakistan Economic Corridor (CPEC), which islinked to the BRI. Pakistan rejected the claim, saying that it had nointention of using IMF money for repaying China.