Even as China keeps making deep inroads into Pakistan’s economy through huge loans and huge infrastructure projects, not all’s well as the latter would have to pay up a sum of $6.7 billion to the dragon nation in the next three years. While Pakistan’s economy was showing some signs of revival, the spread of the coronavirus pandemic has hit it hard. As a result, repayment of the debt could become difficult.
The World Bank, in its report, projected a contraction in the country’s GDP growth by 2.6 per cent for the financial year 2019-20 and 0.2 per cent in 2020-21. The report said that the key labor-intensive export sectors were likely to contract sharply while recovery would be slow (<a href="http://www.uniindia.com/pakistan-s-economy-to-perform-worse-than-previous-estimates-world-bank/world/news/2030819.html">http://www.uniindia.com/pakistan-s-economy-to-perform-worse-than-previous-estimates-world-bank/world/news/2030819.html</a>).
To add to this woe, a recently concluded probe revealed high-level corruption and serious discrepancies in the project execution of the much-hyped China-Pakistan Economic Corridor (CPEC). The report has also suggested that six power projects which have been funded by China have been favoring the Chinese.
While a chunk of the loans has been given bilaterally by Beijing, a part of them has also been directed through the China Development Bank, ICBC China, and Bank of China.
Sources said that discontent among the Pakistanis is rising as China’s economic dominance grows. “The economic viability of the projects is often in question as many of them are costlier than they should have been. By the way, this is a problem in quite a few countries where China is investing,” an analyst told IN.
The project cost for CPEC, stretching from western China to the Indian Ocean, too has been increasing since the time it took off. “While CPEC helps Pakistan advance its plans to build a sound infrastructure, it adds to Pakistan’s corruption, which keeps pushing the costs of the project higher by the day,” Forbes in an article said (<a href="https://www.forbes.com/sites/panosmourdoukoutas/2019/07/11/the-problem-with-chinas-investments-from-malaysia-to-sri-lanka-pakistan-and-uganda/#65eb39842e35">https://www.forbes.com/sites/panosmourdoukoutas/2019/07/11/the-problem-with-chinas-investments-from-malaysia-to-sri-lanka-pakistan-and-uganda/#65eb39842e35</a>).
“As of 2019, the cost of CPEC projects is $62 billion, up from the original value of $46 billion back in 2014,” the article noted.
Despite China and Pakistan sharing a close relationship, there is an underlying feeling bitterness between the local Pakistanis and the Chinese. Murmurs have also been rising in the country on how China is laying a debt trap for Pakistan.
Not just in south Asia, China has also been losing its goodwill in other parts of the world including many countries in Africa..