By: | Zain Khan |
As part of the Belt and Road initiative, China invests $62 billion in Pakistan through the China-Pakistan Economic Corridor (CPEC), which the government and the public perceive to be a game-changer for the country’s destiny, and senior government representatives often talk highly of it in local and global forums.
Since its inception in Pakistan over the last five years, CPEC has allowed the nation to deter its energy crisis, as well as constructing silk roads and other infrastructure networks in its multiple areas. With growing energy and decreasing distances, not only has people’s lifestyle altered, but there has also been a phenomenal boost to financial activities.
With fast progress being made through CPEC in Pakistan, several scandalous voices have begun to term the half a trillion dollars project as a “debt trap” for Pakistan, which will demonstrate a back-breaking strain on the country’s economy.
Refuting the false remarks, Noor Ahmed, Pakistan’s Secretary of the Economic Affairs Division, informed Xinhua that the country’s complete foreign debt amounts to about $106 billion and that China’s credit accounts for just 10-11 percent of the total foreign debt, while the remaining 89-90 percent comes from other sources such as the IMF, Paris Club, and other Western organizations.
“China has continued to assist Pakistan greatly and has always come to its rescue during the severe economic crisis. Through CPEC, China is building infrastructure in Pakistan to save its economy and construct its infrastructure, some of the cash that comes into the nation is solely an investment, some are an interest-free loan, and some are very simple and easy.
If China gives Pakistan cash at one of the world’s smallest interest rates, how can it be a debt trap? “China supplied loans to Pakistan while at the same moment investing in Pakistan and scheduled to invest more in the next CPEC stage, a win-win situation for both peace and financial stability in Pakistan. China’s going to profit too, he added.
Back at CPEC critics, the Ministry of Planning Development and Reform said in a declaration last year that China stepped forward to promote Pakistan’s development at a moment when foreign investment had dried up and energy shortages and infrastructure gaps were crippling financial activity.
“CPEC-related public loans have an interest rate of just 2% and a repayment period of 20-25 years, and debt repayment will start in 2021. CPEC does not impose any instant burden on repayment of loans and outflows from the power industry. All debt-related outflows are outweighed by the resulting investment advantages for the Pakistan Economy,’ read the declaration.
Referring to China’s development project, the declaration added that through interest-free or public concessional loans, the infrastructure industry is being created. Gwadar Port is a grant-based investment, meaning that Pakistan’s government does not have to reimburse the investment quantity for port growth.
Pakistan faced the worst energy crisis in its history before CPEC. The early harvest stage of the project has allowed Pakistan to avert the energy crisis from the very own resources of the country, including coal and solar energy by generating electricity.
Not only local but also global rating and financial organizations see CPEC as a major advantage for Pakistan, rather than a debt trap. World’s leading rating agency Moody’s said the continuing execution of CPEC initiatives is probably to contribute 9-10% of Pakistan’s GDP in the 2018-2019 fiscal year.
Another global audit, consulting, and tax services agency Deloitte said CPEC would add up to 2.5 percentage points to the growth rate of the country.
Yasir Masood, Director Media, and Publications from the Centre of Excellence for China-Pakistan Economic Corridor, Ministry of Planning, Development, and Reform and International Relations analyst commented that the CPEC is a lynchpin of the Belt and Road Initiative, because of the strategic location of Gwadar Port which is the centerpiece of regional connectivity carries all the potential to turn Pakistan as the “Zipper of Eurasia”.
However, the more slogans are being attributed to the “all-encompassing” concept of the CPEC, opposition from the enemies of Pakistan are trying in denial to disgruntle this peace-promoting economic venture, which is inclusive, open, transparent with win-win proposition not only for Pakistan but the entire region. The disparagers of the CPEC are panicky and creating innovative threats to impede its success, the reason being that this initiative has enabled Pakistan to divert its attention from the geo-strategic and geo-political realm to geo-economic realities. The opposers of Pakistan are trying tooth and nail to push Pakistan back into geo-strategic and geo-political compulsions so that it can never prosper.
The CPEC is under “hybrid war” tactics which is exclusively devised to fail this gigantic economic program by the external opponents by using the two-pronged strategy i.e. to defame the CPEC by calling it a “debt trap” etc. with fabricated facts and the other is to create chaos in Pakistan so that international inflow can be halted. We have been defeating all such nefarious designs but still, a lot of savvy steps are needed to foil the CPEC from all dimensions and corners.
This must be inculcated by all and sundry that the CPEC has all the connotations in its theory and applications that can take Pakistan out of the dark alley when one the onside we are confronting with the worst financial woes and on the other external threats are growling to intimidate Pakistan. The way out to all our ills lies in the realization of economic progress and the CPEC if planned, utilized, implemented and executed with a visionary mindset, it has all the ingredients to take Pakistan at the pinnacle of success and glory in the comity of nations.