'China came to our help...': Pakistan PM waxes lyrical about Beijing as IMF delays bailout package

Pakistan Prime Minister Shehbaz Sharif is waxing lyrical about China asInternational Monetary Fund (IMF) continues to delay the release of bailout funding. Sharif hailed Beijing for "outstanding" financial support amid the 'inordinate' delay by the monetary body.

Sharif was speaking after Islamabadsigneda memorandum of understanding with Beijingfor the 1,200 MW Chashma-5 (C-5) nuclear power project.

“It is a great occasion and a great moment between two great friends, China and Pakistan.Hopefully, we will kickstart it without further delay," said Sharif, adding thatinvestment from China, to the tune of $4.8 billion, had sent a “loud and clear” message.

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Sharif's statement also came in the backdrop of his government announcing that$2.3 billion in Chinese loans would be rolled over before the fiscal year ends on June 30.

Our friendship sweeter than sugar and honey: Sharif

“Our friendship is higher than the Himalayas, deeper than the deepest ocean, sweeter than sugar and honey, and stronger than iron and steel,” said Sharif.

As for receiving the bailout money from IMF, Sharif said Pakistan had met all the terms and conditions and yet was unable to make any progress in the discussions.

“We thought this would be done two months ago, three months ago but there has been inordinate delay...China, once again, came to our help and rescue. This is friendship. A friend in need is a friend indeed.”

“But at this point and time, at this juncture, Chinese financial support has been outstanding.We are deeply obliged to President Xi Jinping, to the Chinese leadership and to the Chinese finance minister," he added.

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Pakistan on risk of default

Earlier this month,credit ratings agency Moody's said time is running out for Pakistan to convince IMFto release the remaining tranche of the $2.2 billion of the $6.7 billion payout.

“There are increasing risks that Pakistan may be unable to complete the IMF program that expires at the end of June,” Grace Lim, a sovereign analyst with Moody's Singapore was quoted as saying by Bloomberg.

“Without an IMF program, Pakistan could default, given its very weak reserves," Lim added.

The deadline to reach a deal on the financing programme is approaching and the Pakistani government is nowhere near securing the funding. Despite finance minister Ishaq Dar holding several rounds of discussions with the top IMF officials, Islamabad hasn't been able to lock dates for a board meeting, a pre-requisite for the disbursement.

Notably, conducting a board meeting on the review of the programme would require a prior staff-level agreement. However, the deal has been delayed since November last year, the longest delay since at least 2008.

Islamabad needs to satisfy IMF on three counts, includingthe budget for the fiscal year 2023-24 (FY24). However, over a week since the budget was tabled in the National Assembly, IMF remains unconvinced.

(With inputs from agencies)

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