America and the money trap

Published: August 1, 2018
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Both Pakistan and America are in a time of change, of redefining their bilateral and multilateral relationships, and it is a time of unease. America, in particular, is far from delighted at the way Pakistan is developing its relationship with China at the strategic and fiscal levels and is making its displeasure known. Whilst US Secretary of State Mike Pompeo welcomed the expected elevation of Imran Khan as the next prime minister, he was quick to wrap the welcome in a caveat regarding the likely approach by Pakistan to the IMF for another bailout, possibly as soon as September. His concern is rooted in the fact that the US is a contributor to the International Monetary Fund (IMF) and has no desire to see Pakistan use IMF money to pay off Chinese loans. It is being reliably reported that Pakistan will be seeking $12 billion from the IMF but the request has not yet been submitted.

Separately there is the matter of American reimbursement to Pakistan in respect of counterterrorism efforts and the US National Defence Authorisation Act that was passed by Congress last week, does not link any future payments to Pakistan to such efforts. Given the generally warm reception given to the putative incoming government by the current Afghan government and the persistent activity of the Haqqani Group, this is a matter of some import. The bill requires Pakistan to actively coordinate with Afghanistan on matters of border security, the quality of which has been extremely poor in the last year with frequent exchanges of fire. There are to be quarterly reports on Pakistan’s compliance in this regard but it is unclear as to how much money the Americans are prepared to commit.

Although these two issues have no direct linkage beyond money, they indicate that the US is determined to exercise what control it can, albeit at arm’s length, on the evolving foreign policy of Pakistan. The incoming government is going to need a deft and subtle hand to manage — and balance — the financial and multilateral books. And no cricketing analogies, please.

Published in The Express Tribune, August 1st, 2018.

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Reader Comments (1)

  • cuban
    Aug 1, 2018 - 10:25PM

    Looks like IK’s first major challenge will be repairing a relationship with the USA. Recommend

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