Pakistan Should Beware an Easy Chinese Bailout

As former cricket star Imran Khan prepares to take his oath as Pakistan’s new prime minister Saturday, there’s one thing he must be clear about: Pakistan may be China’s friend at the moment, but the relationship could quickly turn sour. In the next month or so, Islamabad may have to take another bailout package from the International Monetary Fund — the country’s 13th, a Bloomberg View reported. The State Bank of Pakistan now holds just over $10 billion in foreign exchange reserves, giving enough room to buy only two months’ worth of imports. But the IMF route is tedious. A rescue package from the Fund would mean the usual round of economic austerity and pro-market reforms, for a prime minister who came to power promising an “Islamic welfare state.” The U.S., the Fund’s largest shareholder and most important decision-maker, has already said that any bailout money can’t be used to pay off China, whose ambitious Belt and Road Initiative is turning Pakistan into another Venezuela. Read more.