Pakistan Accumulates $40 Billion Chinese Debt, China Claims Amount Is Lesser
In Spite of clear warning by India, a few countries have still fallen in the trap set through OBOR concept. The CPEC is a corridor that links Pakistan’s Karachi and northwestern Peshawar and runs through the populated provinces of Sindh, Punjab and that part of Indian territory of Kashmir which is presently under Pakistan’s illegal occupation. This corridor is supposed to highlight energy, transport, industrial cooperation and Gwadar port construction, and seeks to expand economic cooperation between China and Pakistan.
The 8th Joint Cooperation Committee meeting of the CPEC was held in Beijing on December 20. China and Pakistan signed a memorandum of understanding at the meeting on industrial cooperation, and agreed to jointly promote the construction of special economic zones. Thus Pakistan has been further entrapped in debt unknowingly.
However a few Economists in Pakistan have woken up to this nightmare and are trying to tell the Government and also the people of Pakistan to take suitable measures. Pakistan newspaper The Express Tribune reported last week that Pakistan will need to pay $40 billion of debt and dividends to China over 20 years for infrastructure and development projects under CPEC.
Naturally the Chinese Embassy in Pakistan has come to the defence of CPEC and refuted media reports regarding $ 40 billion debt. It cleverly says that Pakistan only needs to pay $6.017 billion to Beijing for relevant projects under the China-Pakistan Economic Corridor (CPEC). This includes concessional loans of $5.874 billion which China offered to Pakistan for major transportation infrastructure projects, at a composite interest rate of about 2 percent on 20 to 25 years loans.
The Embassy has not included the 22 projects under CPEC which have been preliminarily finished or are under construction with a gross investment of $18.9 billion. In addition Chinese companies have invested $12.8 billion in energy projects in Pakistan, including $9.8 billion from commercial banks with an interest rate of about 5 percent. These are business activities between companies and may not involve the Pakistani government but the pay back will have to be done by the people of Pakistan.
So instead of talking about $ 40 billion, Chinese are trying to mislead the poor people of Pakistan by harping on the fact that China has also provided $143 million interest-free loans for the construction of the Expressway East Bay in Gwadar and free aid for some livelihood projects. It has further emphasized that CPEC is the significant economic cooperative project between the two countries and all projects are based on consensus and relevant laws.
