IMF concerned about the China-Pakistan Economic Corridor projects and asks for more transparency in order to build a better Pakistan through CPEC
In a recent conference called by the journalists, IMF asks Pakistan government to be more transparent in the execution of China Pakistan Economic Corridor projects. They also ask for transparent future foreign exchange requirements for serving these debts on the projects.
What IMF Mission Chief said?
The IMF mission chief for Pakistan spoke to the media in a conference call on the inference of 9th review and Article IV consultations with the government. He said, “We believe it’s important that information on contracts should be provided transparently as soon as it emerges so that we can factor it in” “The details and terms are evolving.
We are monitoring the impacts on fiscal and external sector in near to medium term” he stated. The economic corridor is about make Pakistan a new transit trade gateway for cargo to Pakistan and Asian pacific countries.
What IMF was asked about?
During the conference call, the chief of the Pakistan Mission was asked about the standing of the IMF in the CPEC projects. A question asking how far the IMF has been able to build an accurate picture of the usage of debts in the execution of the CPEC projects.
The follow-up remarks given to the media, Mr Finger stated that the funds would “use the occasion of our upcoming program discussions to update our understandings and discuss the outlook and economic implications of the still evolving project”. An earlier analysis report provided by the Fund saying, to get the full benefits of the CPEC, it is very important to manage the risks properly. It is also important to execute sound practices in the evaluation and implementation of public investment projects along with the strong procurement management system.
IMF debt sustainability Review
The IMF has given a sustainability review for Pakistan, it has given the country a clear bill of health for short term. The IMF has pointed that the CPEC projects are divided into two major divisions, a transport wing and an energy generation project.
These two areas are the major focus where transport projects are government to government funded, however the energy sector is receiving the funds in the form of foreign direct investment.
State Bank’s Review of funds
In the annual reports,the state bank of Pakistan has said that the government has estimated disbursements of RS 207 billion equaling $2.7 billion from China in 2015. It is the largest bilateral commitment out of the all so far.
