How much Chinese loans account for in Pakistan total foreign debt?
ISLAMABAD - Pakistan Finance minister, Asad Umar has revealed that Chinese loans account for 10% of Pakistan total foreign loans.
Umer responded to Stephen Sackur, host of the BBC’s HARDtalk who accused his government of refusing to make public details of the CPEC projects and sought an answer from him.
“It’s not true,” Umar said. Details of the CPEC investment (not the loans) is public. The investment is almost entirely in energy. The information is available on the website of the power sector’s regulator. And details of the loans were shared with the IMF when its team came to Pakistan. “After the first meeting, I didn’t hear any questions from them because there is nothing to hide,” Umar said. Reports of a lack of transparency were a function of ‘mistrust’ built by the perception shaped by the media.
Indeed, details of the energy projects have been available on NEPRA’s website—but there is no information about the loans and their terms. Thiswas the case before this government came to power and now that it is at the helm.
The Chinese loans once again hit the headlines after the US, which is in a trade war with China, expressed its concerns that Pakistan’s IMF loan would be used to pay Chinese loans. “The US is the world’s largest debtor to China, owing $1.3 trillion. So it should worry about its own China debt problem,” Umar told the BBC. He added that Pakistan went into 12 IMF programs in 30 years, but no one questions it about its foreign loans. “Why was the same question not asked when the lenders were western banks?”
The finance minister said Pakistan owes only a tenth of our foreign loans to China. However, data released by the Government of Pakistan’s Economic Affairs Division shows that the contribution of Chinese money, as a portion of our overall borrowing, has increased this year.
In the previous fiscal year, Pakistan had borrowed $10.7 billion in foreign loans and more than a fifth of this came from Chinese banks. Their share in the July-October period this year went up to 33%.