US Democratic Congressman Brad Sherman has shown concern over USD 8 billion dollar loan that Pakistan has demanded from the International Monetary Fund (IMF). Sherman calls Pakistan’s demand as a convenient way to repay the Chinese loan they have taken.
Pakistan is seeking a $8 billion loan from the IMF to save its economy which faces a crippling financial crisis. While speaking during a Congressional hearing with David Malpass, Under Secretary of Treasury for International Affairs, Sherman said, “I’ve shared with him the concern that any IMF loan to Pakistan cannot be just a convenient way to repay China. China has engaged in a debt trap. We’ve seen it in Sri Lanka. We’re seeing it in Africa. If the Chinese do that, then China has to learn that sometimes they just don’t get repaid”.
Referring to the issue relating to Dr Shakil Afridi who is serving a 33-year sentence for helping the CIA in tracing the Al-Qaeda Chief Osama Bin Laden who was gunned down in in Pakistan’s Abottabad, Sherman said, “The idea that Pakistan would turn to its own people and vilify a man who helped us destroy Osama bin Laden, does not speak well of the future of US-Pakistani relations. Our aid has been cut to Pakistan. I do not think it will be restored to major levels until the Dr (Shakil) Afridi issue is dealt with”.
While addressing the conference organised under the banner of South Asians Against Terrorism and for Human Rights (SAATH) and co-hosted by US-based columnist Mohammad Tagi and Haqqani, Sherman attacked Pakistan, which got $ 43 billion financial aid post-independence, for blocking US websites like Voice of America inside the country.
Sherman, who is on the financial security committee, told that he had a meeting with the Trump administration last week where he raised the issue of IMF loan to Pakistan. He said that the US almost has a veto in the IMF and even the US aid to Pakistan which has been cut by the Trump administration is unlikely to be restored soon.
He also said that the US should instruct American Banks and the American bond rating agencies that “if there is a default on a debt and the debt is part of a Chinese debt trap, it just doesn’t count. And then turn to the Chinese and say that it is not going to be able to use western financial institutions to penalise countries who fall into their debt traps”.
“So if China wants to make these loans, fine. If they don’t get repaid, that’s their business and countries will be then free to engage in other financial transactions with countries hopefully that do not engage in such traps,” he added.
Sherman is working on a legislation which he calls “Chinese Debt Trap Relief Act” that would encourage countries not to repay bad loans.