Amid IMF deal uncertainty, Pakistani premier lauds China for aiding struggling economy

Pakistani Prime Minister Shehbaz Sharif lauded China on Tuesday for assisting his country in its current economic crisis, and expressed hope that a deal with the International Monetary Fund (IMF) will be finalized soon.

Speaking at a ceremony to sign a memorandum of understanding (MoU) between Pakistan and China for a $4.8 billion Chashma-5 (C-5) nuclear power project, Sharif also thanked Saudi Arabia, Qatar, and the United Arab Emirates (UAE) for their economic assistance to the country.

"When Pakistan is facing economic challenges and we are engaged with IMF trying to finalize nine reviews and Pakistan has met all the terms and conditions required by IMF (and) we thought this would have been done two months ago three months ago but there has been a delay," Sharif said at the ceremony, which was broadcast live by state-run Pakistan Television.

In reference to the agreement, he said China has once again come to "rescue Pakistan."

He also praised Saudi Arabia, Qatar, and the UAE for assisting Pakistan in its current economic crisis, calling them "great friends."

On Friday, Pakistan's central bank announced that it received a $1 billion loan from China, bringing the country's foreign exchange reserves back to more than $4 billion.

Earlier this month, Sharif said that he is "very hopeful" of reaching an agreement with the IMF in June.

“We are still very hopeful that the IMF program will materialize. Our ninth review by the IMF will match all terms and conditions and, hopefully, we’ll have some good news this month,” he told Anadolu in an exclusive interview in the Turkish capital Ankara.

However, on May 31, State Minister for Finance and Revenue Aisha Ghaus Pasha criticized the IMF for “intervening” in the country’s internal matters.

Her remarks came after Nathan Porter, the IMF’s mission chief for Pakistan, said the monetary agency hoped for a “peaceful way forward in line with the Constitution and the rule of law.”

He was referring to the deepening political turmoil that has gripped the South Asian nuclear nation since the ouster of former Prime Minister Imran Khan through a no-trust vote in April last year.

Islamabad has been negotiating with the IMF since early February to release $1.1 billion as part of a $6.5 billion bailout package signed by Khan's government in 2019. To meet the IMF's stringent demands, Sharif and his coalition government have reduced subsidies, removed an artificial exchange rate cap, increased taxes, and raised fuel and electricity prices.

- Chashma-5

Pakistan and China signed the MoU for Chashma-5 (C-5) nuclear power project. The event was attended by Sharif, senior officials from the Chinese Embassy in Islamabad, and the state-owned China National Nuclear Corporation Overseas Ltd (CNOS).

This will be the seventh nuclear power unit in Pakistan.

Meanwhile, the Pakistani government has constituted a negotiation committee to finalize a deal with the UAE for the transfer of its port terminals in Karachi.

This will be the first intergovernmental transaction authorized by a law passed last year to raise emergency funds, local daily the Express Tribune reported.

The committee will finalize a draft operation, maintenance, investment, and development agreement under the government-to-government arrangements with the UAE for handing over the Karachi port terminals, according to the proposed plan.