Pakistan has been going through a crisis in the recent times. Former Prime Minister Nawaz Sharif has been banned by the Pakistan’s Supreme Court from fighting elections. The current Prime Minister Shahid Khaqan Abbasi is not a strong figure and he too is going to leave office on May 31st. The Corruption and mismanagement of funds by the Pakistani administration have added to the woes of Pakistan. A major crisis is looming over our not so friendly neighbor and with help being withdrawn from America, Pakistan is falling further into the net of imperialistic China. From terrorism to fund crisis everything has gone badly for the Islamic Republic of Pakistan and it is also facing serious charges of abetting terrorists on its soil. China has taken utmost benefit of these problems faced by Pakistan under the garb of extending help. Right from developing infrastructure to taking control of the Pakistani ports China has not remained shy. Pakistanis remains helpless as of today and has no other option but to seek more help from the Red Dragon. In the most recent development, Pakistan has taken a loan of $1 billion ‘at a competitive rate’ from banks in China.
According to an interview given by State Bank of Pakistan Governor, Tariq Bajwa has confirmed the news of the loans given to the Pakistani government by private banks of China. The Financial Times newspaper interview quotes SBP Governor saying, “The money strengthens the financial, political and military ties between the two countries”. Pakistan’s foreign exchange reserve have dwindled considerably in the last year. They have come down to a paltry US $ 10.8 billion in May 2018 from the US$18.1 billion it had in April, 2017. Bajwa further added “Chinese commercial banks are awash with liquidity”. His attempts to reconfirm Pakistan’s decision of accepting loans from Chinese banks however cannot hide the fact that the Muslim nation (Pakistan) is facing a monetary crisis. The stoppage of financial aids from the USA has a huge role in the financial troubles of the country. The Pakistani officials hope that borrowing from China would save Pakistan the trouble of approaching the International Monetary Fund. Till now out of the 9 programmes held between Pakistan and IMF since December 1988, only four have been successful, all the rest were abandoned midway. The only programmes which could bear fruit were the ones initiated in the 2000s and 2010s.
China is emerging as the biggest benefiter out of this deal as it helps Beijing in keeping the value of China-Pak Economic Cooperation (CPEC) project disclosed. Islamabad’s growing dependency on Beijing will enable China to maintain a tight grip on the country. After the CPEC project which is estimated to cost about US$ 60 billion, this is yet another boost for the Chinese yuan. According to Pakistani officials China is not too keen to disclose the details of the loans granted to Pakistan as a part of the CPEC project. With China’s appetite to colonize and reduction in Pakistan’s aid from America, Pakistan’s economy might go through its worst phase.
The turbulent government regimes and corruption, as well as scandals like Panama papers have tarnished the trust of the people in the government of Pakistan. The crumbling economy might break down any day as it is evident by the wiping out of almost half of its foreign reserve in just a year. It’s misdirected efforts in ending the crisis has only resulted in deepening the crisis faced by the economy.
