That the Trump administration has taken the ongoing China-US global trade war to the doorsteps of Islamic Republic of Pakistan is a fact that can easily be discerned from Secretary of State Mike Pompeo's absolutely unwarranted and inappropriate remarks that he made about a possible IMF bailout for Pakistan. It is quite interesting to note an IMF spokeswoman quickly made it clear that the Fund can confirm that it has so far not received a request for a Fund arrangement from Pakistan and that it has not had discussions with the authorities about any possible intentions. Pakistan has had 14 IMF financing programmes since 1980, including a US$6.7 billion three-year loan programme in 2013. The Fund intervention has exposed the Trump administration's designs towards the financial health of Pakistan which is struggling to avert a balance of payment (BoP) crisis that has presented the new government with its biggest challenge. Washington is fully aware of the fact that Pakistan, which already has around US$5 billion in loans from China and its banks to fund major infrastructure projects, had sought another US$1 billion in loans to stabilise its plummeting foreign currency reserves. Yet, officials in the Trump administration, including US Treasury Secretary Steven Mnuchin, have been found criticising China's infrastructure lending to developing countries on flimsy grounds.
The country's caretaker foreign minister Hussain Haroon has rightly rejected as "completely inappropriate" the US warning to the Fund against giving Pakistan a fresh bailout, asserting that Islamabad is determined to complete the $56 billion China Pakistan Economic Corridor (CPEC) come what may. There is little or no doubt about the fact that the caretakers whose tenure will be ending in the next few days have articulated a comprehensive response to Washington's growing belligerence against Islamabad. The caretaker foreign minister was spot-on while reminding the US that Pakistan doesn't want any third party intervention in the CPEC. Haroon has also made it clear to the US that it is the stated position of Pakistan government that it is totally wrong to link any IMF package with the CPEC. He has also stated that the present caretaker government does not have a mandate to decide on any IMF package, which is why it made no sense for the US to raise the issue at this point in time. Haroon has also questioned the US about its role in the War on Terror in which "Pakistan has paid every possible price that it could". Haroon, who has served the country at the United Nations for several years, has clearly put the US in an awkward position by raising his country's concerns about issuance of individual licences for high-technology weapons to India while denying Pakistan reimbursements in the head of Coalition Support Fund (CSF).
Be that as it may, it has become quite clear that the US warning about IMF bailout to Pakistan is also influenced, among other considerations, by the ongoing trade war between the world's two largest economies that officially began in July as the Trump administration followed through with its threat to impose tariffs on $34 billion worth of Chinese products, a significant escalation of a fight that could hurt companies and consumers in both United States and China. The penalties prompted quick retaliation by Beijing. The IMF, European and other major economies have strong appreciation of the fact that the US has targeted Pakistan because it happens to be the closest ally of China and the CPEC is the flagship project of China's 'One Belt, One Road' historic infrastructure initiative. Moreover, it is a fact that the IMF has its own standards and operating rules when lending to countries is not lost on any country big or small. The incoming government is expected to look into the possibility of making it clear to all hostile or potentially hostile nations that Pakistan shall brook no intervention in the execution or implementation of the CPEC, a potential game-changer for a nuclear-armed nation of over 200 million people.
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