- ‘By investing in Pakistan, China is enabling the Pakistani economy to stand on its feet and get out of the debt trap of western organisations’
ISLAMABAD: Pakistan’s total foreign debt is about $106 billion while Chinese loan accounts for a mere 10 to 11pc of the total amount, said Economic Affairs Division Secretary Noor Ahmed on Monday, adding the remaining 89 to 90pc is from other sources including the International Monetary Fund, Paris Club, and other western organisations.
“China has provided loans to Pakistan and has also invested heavily in the country. It plans to invest more in the next phase of the China Pakistan Economic Corridor (CPEC), which provides a win-win situation for both the countries, especially with the increasing peace and economic stability in Pakistan,” he stated in an interview with a foreign media outlet.
During the same interview, Syed Hassan Javed, Director of the Chinese Studies Centre, School of Social Sciences and Humanities at the National University of Science and Technology, said that China has helped Pakistan a lot during the last 10 months by lending its money to save Pakistan from debt distress and by helping it stabilise its foreign exchange reserves.
“Pakistan is so badly entangled in western debt-trap that it has to get a new loan to repay previous loans. By investing in Pakistan, China is enabling the Pakistani economy to stand on its feet and get out of the debt trap of western organisations.”
Unlike western loans with higher interest rates and other painful conditions, Chinese loans are fairly concessional, aimed solely at uplifting the Pakistani economy, he maintained.
“Before CPEC, Pakistan was facing the worst energy crisis in its history. The project’s early harvest phase has enabled Pakistan to avert the energy crisis by electricity generation from the country’s very own resources, including coal and solar energy.
“Through the corridor, Pakistan is utilising its own natural resources to generate electricity which will gradually reduce the country’s dependency on imported fuels. Foreign elements are not happy with Pakistan’s increasing dependency on local resources through CPEC as it will result in the country’s decreasing import of expensive fuels, hence releasing its strain on the balance of payment, and helping it to get out of their debt trap. CPEC is an emerging reality, critics cannot undo it,” Javed said.
In a recent talk with Xinhua, Muhammad Muzammil Zia, policy head of job growth and human resource development in CPEC Centre of Excellence, an Islamabad-based think-tank, also noted that that CPEC has created 70,000 direct jobs in Pakistan and is likely to create 1.2 million more jobs under its presently agreed projects, which will help poverty eradication in Pakistan.
Another international audit, consulting, advisory, and tax services agency Deloitte said that CPEC would add up to 2.5 percentage points to the country’s growth rate.