Daily Briefs

Photo : Dawn

23 January 2020, Thursday

Blacklisted companies got CPEC projects: US Assistant Secretary Alice Wells

Fears CPEC will make Pakistan debt-ridden

PR Daily Brief | Lakshmi V Menon

23 January 2020, Thursday

US Assistant Secretary Alice Wells warned Pakistan that the multi-billion-dollar China Pakistan Economic Corridor would further Islamabad’s stifling debt burden and flame corruption while ousting profits and employment to the Chinese. Dawn (23 January 2020) quoted Ms Wells as raising vital concerns and long-term effects while pitting Chinese financing against US grants.

Wells said that CPEC was a financing arrangement ensuring benefits to the Chinese at Pakistan’s cost. She stated that economic distress during repayment would prove detrimental to Pakistan’s economic developmental potential and PM Imran Khan’s reform agenda; while unemployment would persist as CPEC’s primary reliance is on Chinese dealers and labour. Chinese Ambassador Yao responded by stating that Beijing would never ask Pakistan to repay during economic suffrage. 

Wells used Pakistani railway minister, Sheikh Rasheed Ahmad’s announcement (October 2018) regarding the budget reduction of Karachi-to-Peshawar railway project from $8.2 billion to $6.2 billion to illustrate that Pakistan was feeling overburdened. In 2019, the budget had shot up to $9 billion, she added.

Wells’ unveiled criticism of lack of transparency of CPEC projects was coupled with New Delhi’s accusation of the project being a part of China’s ‘String of Pearls’ military agenda to encircle India. An indifferent China and Islamabad have awarded various CPEC contracts to blacklisted entities. This would peak corruption and push Pakistan into deeper debt. 

Presently, Pakistan owes the Chinese government $15 billion in debt and an additional $6.7 billion in commercial debt. To disprove the USA, the duo will have to fix unemployment, contain inflation, and crack foreign currency exchange crisis in Pakistan. Impossible in the near future. 

At a time when the ‘all-weather friends’ are attempting a US-Pakistan rapprochement, Wells underlined that China was providing loans with sovereign guarantees or guaranteed profits for Chinese enterprises; unlike US grants. She further urged Islamabad to embrace the US offered model – an amalgam of grants and US private investment – to revive Pakistan’s economy. The Assistant Secretary’s address constitutes a part of the larger anti-Belt Road Initiate offensive launched by Washington recently. 

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