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Pakistan: What Does a Loan From China Mean for the Already Indebted Country?

MIN READAug 14, 2018 | 20:49 GMT

(Stratfor)

China has reportedly agreed to give Islamabad a loan to shore up Pakistan's plummeting foreign exchange reserves as its import bill grows. Although the two countries have yet to sign a deal, the prospective loan -- reportedly on the order of at least $10 billion -- would enable Pakistani Prime Minister-elect Imran Khan's incoming administration to avoid turning to the International Monetary Fund (IMF) for help, as Pakistan has done 12 times in its history. The IMF attaches conditions to its loans, and austerity measures such as spending cuts, tax hikes and structural reforms would undermine Khan's ability to fund his populist vision for Pakistan: to turn the country into a social welfare state aimed at improving the lives of the poor. ...

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