Pakistan Puts a Spotlight on China’s Opaque Loans

Imran Khan, Pakistan’s former cricket captain and newly elected prime minister, is on a sticky wicket. His victory in last week’s polls was secured in part on a pledge to ramp up spending on public services. Yet the coffers are empty and a balance of payments crisis looms, the Financial Times reported. Instead of the “Islamic welfare state” he hoped to create, his aides are forced to ponder the prospect of an IMF deal. Even that safety net may not be at hand. Mike Pompeo, US secretary of state, says Washington will oppose any bailout that pays off Chinese loans on grounds that this would be unfair to US taxpayers. For years, a dispute between China and the west has been simmering over the terms of development financing. Unfortunately for Mr Khan’s new government, Pakistan is where it threatens to boil over. There is no doubt that the country needs help. Exports have dwindled and rising oil prices have pushed up import cost. Read more. (Subscription required.)