Pakistan could turn to China for a bailout to avoid a full-fledged balance-of-payments crisis if the International Monetary Fund (IMF) continues to postpone its $6.5 billion program.
Given the prevalent economic issues, the cash-strapped country may have no choice but to request that China devise a mechanism to bail out the ailing economy, according to a report in a national daily.
“Amid deepening political and economic crisis in the country, the IMF has adopted a wait-and-see policy but this cannot be pursued for a longer period. Either the IMF program will have to be revived through the completion of the ninth review or the program will be scrapped. We will share no more data with the IMF without completion of the ninth review,” the paper said citing official sources.
People familiar with the situation are now recommending that the government make last-ditch efforts to revive the IMF program or clearly look to China for a bailout. Former Finance Minister Dr. Hafiz A Pasha told the paper that if the IMF does not move forward, Pakistan will have no choice but to request China to help Islamabad avoid a full-blown crisis.
Pasha said the Asian Infrastructure Investment Bank (AIIB) could be used as a tool to assist Islamabad in averting the balance of payment crisis and that any institution assuming the role of an ‘Asian IMF’ should be considered.