Dar says no special debt-rescheduling deal with China

WASHINGTON: Pakistani Finance Minister Ishaq Dar said he would not approach China any differently than he would other countries as his government

seeks to reschedule debt, and he expressed confidence in Pakistan's ability to repay loans despite a struggling economy ravaged by devastating rains and floods.

Dar was in Washington to participate in annual meetings of the International Monetary Fund and the World Bank. Finance ministers from many countries and multilateral lenders gather in the U.S. every year to discuss the state of the global economy.

Speaking to VOA, Dar said, "God willing, there will be no possibility. Pakistan will not default."

Credit rating agency Moody's recently downgraded Pakistan, casting doubt on the country's ability to make loan payments. Dar, however, told VOA that he's sure Pakistan can meet its financial obligations.

"I am very confident. … We are mobilizing resources; we are having commitments,” he said.

“That was the reason I [came] here, to engage the multilateral donors, the bilateral donors," he said.

While the finance minister expressed openness to rescheduling Pakistan's debt, he said he would not go to multilateral donors and would instead work

with bilateral donors or individual

countries, emphasizing that he would

not seek any reduction in debt principal, calling it "morally and contractually wrong."

Asked if he has discussed debt rescheduling with China, to which Pakistan owes the biggest chunk of its external debt — roughly $30 billion — Dar said he was not worried about the size of that debt.

He said that there was a lot of speculation that Pakistan might do a "special deal or soft handling with China and some other countries," but he aimed to have the same understanding with all bilateral creditors.

"We'll talk to all bilaterals, you know, creditors and lenders. But the treatment will be based on the principles of just [justice] and equality," he said.

According to a Reuters report, Pakistan is planning to reschedule nearly $27 billion of its debt.

Pakistan's external debt is more than $130 billion, and its debt-to-GDP ratio is close to 75%. Its current foreign reserves of $13.25 billion are barely enough to support the import-reliant economy for a few weeks.

Its currency, the rupee, however, has bounced back a bit after losing almost 30% of its value against the U.S. dollar this year.

In August, the IMF approved a much-needed $1.17 billion loan disbursement after tough negotiations to prevent Pakistan from defaulting on loan repayments. Additional support from traditional allies such as China, Saudi Arabia, Qatar and United Arab Emirates also helped stave off the crisis.

Dar said that the IMF had not responded to Pakistan's request to ease the conditions of that loan in the wake of the floods. However, the three-time finance minister said that he was committed to completing the program.

This is Pakistan's 13th bailout program with the IMF. The country completed only one such program successfully by bringing necessary reforms

in 2016, when Dar was the finance minister. Overall, Pakistan has gone to the

international lender 23 times since

becoming a member in 1950.