- Pakistan may get short-term lending of $2 billion from Industrial and Commercial Bank of China
ISLAMABAD: As Pakistan still awaits financial assistance from China, the government expects the good news to come after the meeting of the Joint Coordination Committee (JCC), the highest forum of China Pakistan Economic Corridor (CPEC), this month.
According to sources, Pakistan may get at least $2 billion short-term loans from China after the said meeting of JCC, scheduled to commence from December 20 in Beijing. The short-term lending arrangement could be made with the Industrial and Commercial Bank of China Limited (ICBC), a Chinese multinational banking company. It is the largest bank in China and the largest bank in the world by total assets, deposits, loans, number of customers and number of employees.
According to sources at State Bank of Pakistan (SBP), during the visit of Prime Minister Imran Khan last month, the central bank was asked for a ‘situation analysis’ for the requested financial assistance. The bank has reportedly finalised the report which may also be discussed during the upcoming JCC meeting, they added.
China may extend help for Pakistan’s balance of payment under the CPEC framework, sources claimed.
“So far no development regarding the expected assistance has been made. However, there is a clear signal that the finance ministry has received some commitments from the friendly countries which are boosting Pakistan’s confidence to delay the loan program of the International Monetary Fund (IMF),” a source at the Ministry of Finance claimed, adding that the strategy of ‘going slow’ with the IMF program was on the part of Finance Minister Asad Umar.
“Even Prime Minister Imran Khan, during a recent meeting, made it clear to the finance ministry and SBP officials that since he is not an economist, the Finance Division may speed up matters related to the IMF. However, the finance minister later instructed the concerned officials to keep the IMF engaged and share data, required by the international lender, without any negotiations,” the source said, adding that the finance secretary was presently dealing with the developments related to IMF.
“Since no visible assistance has come from both China and Saudi Arabia, it seems that the committed assistance carries a set of conditions/demands, which may be difficult for Pakistan to fully accept. The assistance may be fully extended to Islamabad once modalities for the same are shared and accepted,” said an analyst on the condition of anonymity.
According to the analyst, it is improbable that China would extend assistance on absolutely no economic-related terms and conditions like Saudi Arabia because “that is not the way China operates”, as it would be tantamount to throwing good money after bad.
“The Khan administration would, therefore, need to reenergize its 10 to 12 task forces to complete their recommendations as soon as possible, have them approved by the cabinet and then proceed to share them with China prior to implementation,” the analyst recommended.
Earlier last month, Prime Minister Imran Khan left for his maiden visit to China. Pakistan was to reportedly receive a $6 billion economic package during the visit to reduce its dependence on the International Monetary Fund (IMF).
A week later, Finance Minister Asad Umar announced that Pakistan’s balance of payment crisis was effectively resolved. “Out of the $12 billion financing gap, $6 billion have come from Saudi Arabia, and the rest has come from China,” Umar told the press, adding that a high-level delegation will visit China to work out the modalities.