ISLAMABAD – Pakistan’s total foreign debt is about US$ 106 billion andChinese loan accounts for a mere 10 to 11 per cent of the total foreigndebt, whereas the remaining 89-90 per cent is from other sources IMF, ParisClub, and other western organizations, Noor Ahmed, secretary of theEconomic Affairs Division said.
China has provided loans to Pakistan, and at the same time invested inPakistan and has planned to invest more in the next phase of CPEC, awin-win situation for both as with peace and economic stability inPakistan, China will also benefit, he told Xinhua.
In a talk with the same news organization, Syed Hassan Javed, director ofthe Chinese Studies Centre, School of Social Sciences and Humanities atNational University of Science and Technology said that China has helpedPakistan a lot during the last 10 months by lending its money to save itfrom debt distress by enabling it to stabilize its foreign exchangereserves.
“Pakistan is so badly entangled in western debt-trap that it has to get anew loan to repay previous loans to them. By investing in Pakistan, Chinais enabling the Pakistani economy to stand on its feet and get out of thedebt trap of western organizations.”
Unlike Western loan with a high-interest rate and with other painfulconditions and even global power politics, Chinese loans are fairlyconcessional, devoid of any arm-twisting for the uplift of the Pakistanieconomy, he said.
Before CPEC, Pakistan was facing the worst energy crisis of its history.The project’s early harvest phase has enabled Pakistan to avert the energycrisis by electricity generation from the country’s very own resourcesincluding coal and solar energy.
Read Top Stories
“Through CPEC, Pakistan is utilizing its own natural resources to generateelectricity which will gradually reduce the country’s dependency onimported fuels. Foreign elements are not happy with Pakistan’s increasingdependency on local resources through CPEC as it will result in thecountry’s decreasing import of expensive fuels, hence releasing its strainon 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 jobgrowth and human resource development in CPEC Centre of Excellence, anIslamabad-based think-tank, also said that that CPEC has created 70,000direct jobs in Pakistan and is likely to create 1.2 million more jobs underits presently agreed projects, which will help poverty eradication inPakistan.
Not only local but foreign rating and economic organizations also see CPECas a great benefit for Pakistan, rather than a debt trap. World’s leadingrating agency Moody’s said that ongoing implementation of CPEC projects islikely to contribute 9 to 10 per cent of Pakistan’s GDP in the fiscal year2018-2019.
Another international audit, consulting, advisory, and tax services agencyDeloitte said that CPEC would add up to 2.5 percentage points to thecountry’s growth rate.
