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Is Pakistan finally waking up to Chinese debt trap?

TFI Desk by TFI Desk
3 October 2018
in Trending
chinese debt pakista

PC: hindustantimes.com

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Pakistan has reportedly cut the Chinese investment in railways in the country by a whopping US $ 2 billion. The Pakistani government led by the newly elected Prime Minister Imran Khan has cited a huge burden of loans on the country as the reason for cutting back on the investment from China. PM Imran Khan is likely to scrutinise afresh the deals which constitute the multibillion dollar China Pakistan Economic Corridor (CPEC) deal. The recent cuts announced by Pakistan have been in the railways, the total budget after the cut now stands at US $ 6.2 billion as compared to the US $ 8.2 billion which was originally proposed by China. Railway Minister of Pakistan Sheikh Rasheed Ahmad spoke to the press after the cuts were announced, speaking to reporters in Lahore Ahmad said, “Pakistan is a poor country that cannot afford huge burden of the loans. Therefore, we have reduced the loan from China under the CPEC for rail projects from USD 8.2 billion to USD 6.2 billion. The CPEC is like the backbone for Pakistan, but our eyes and ears are open.”

The cuts announced were originally proposed to be used for developing the infrastructure of railways from Karachi to Peshawar. The upgradation of Main Line-1 (ML-1) is important for Pakistan as there is a colonial era network being used in the 1,872 kilometres stretch of Railways in that network. The upgrading of the ML-1 is important for increasing the number of trains running per day to over 100 against the measly 32 trains which run as of today. Railway Minister Rasheed Ahmad said that the Imran Khan government is looking for more ways to do cost-cutting under CPEC. The government is also looking further to reduce the sum allotted as loans for Railways to US $ 4.2 billion from the existing US $ 6.2 billion after the cut. This would mean an almost halfway cut in the loan amount received from China for developing the railways in Pakistan. Some sense finally seems to have prevailed in the minds of the Pakistani government led by Imran Khan which is trying to get out of the clutches of China, China has pledged US $ 62 billion in total for the key Belt and Road Initiative. The government is also asking China and its investors to participate in the BRI or CPEC through the build-operate-transfer model to lessen the burden of debt on Pakistan.

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India, United States and other European countries have already warned the Pakistani government of the intentions of China to create a debt trap for the poor country. The Beijing administration has however always denied these claims, stating that it is a profitable situation for both China and Pakistan. In reality, the CPEC is a flagship project of the multi-billion dollar BRI of China which is aimed at increasing the influence of China around the world in the long run. Many countries such as Sri Lanka and Malaysia have rejected investments under the BRI initiative of China once they got to know about the nefarious intents of the Chinese. China’s acquisition of the Hambantota port in Sri Lanka after the Lankan government failed to pay back its debt served as a rude awakening for all the prospective countries which had been approached by the country for the BRI. Pakistan needs to seriously rethink its priorities if it wants to maintain sovereignty over its soil, CPEC is not the way to go as it will lead to domination of the country by the Chinese in the long run.

Tags: ChinaExternal debtPakistan
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