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((PLAYBOOK SLUG: China Pakistan Debt
HEADLINE: Does Pakistan Have a Chinese Debt Problem?
TEASER: TEASER: As China-Pakistan Economic Corridor celebrates 10 years, impact of massive debt burden on Pakistan raises questions
PUBLISHED AT: Wednesday, 08/02/2023 at 8:15am
BYLINE: Sarah Zaman
CONTRIBUTOR:
DATELINE: Islamabad, Pakistan
VIDEOGRAPHER:
VIDEO EDITOR: Malik Waqar Ahmed, Jon Spier
SCRIPT EDITORS: MAS, Reifenrath, DJ (ok)
VIDEO SOURCES: Courtesy Pakistan Television, VOA, AFP, AP, Reuters
PLATFORMS: WEB __ TV X__ RADIO _X_
TRT: 3:22
VID APPROVED BY: pcd
TYPE: TVPKG
EDITOR NOTES:
((INTRO))
[[Pakistan and China are celebrating as the China-Pakistan Economic Corridor, the centerpiece of Beijing’s global Belt and Road initiative, completes 10 years. The investment project has grown to over $60 billion and provided Pakistan with crucial infrastructure, but it also has added to the country's ballooning debt. VOA’s Pakistan bureau chief Sarah Zaman reports.]]
((NARRATOR))
Special ceremonies, a commemorative coin and stamp, and Pakistan’s highest civilian honor for the visiting Chinese vice premier, as the two countries celebrate a decade of the China-Pakistan Economic Corridor, or CPEC, part of Beijing's so-called Belt and Road initiative.
[[FOR RADIO: Pakistani Prime Minister Shehbaz Sharif]]
((Shehbaz Sharif, Pakistani Prime Minister)) ((Male, English))
“I think this was a game-changer. And this was the result of vision, and commitment, and friendship.”
[[FOR RADIO: Chinese Vice Premier He Lifeng]]
((He Lifeng, Chinese Vice Premier (Male, Chinese)))
“It has set an example of common trust and mutual development.”
((NARRATOR))
Both governments say China has so far invested close to $25 billion in the project, launched in 2013 to revive Pakistan’s economy and create a new market for Chinese companies.
((FOR RADIO: Mustafa Hyder Sayed, Executive Director of the Islamabad-based Pakistan-China Institute, says Beijing worked with Islamabad when others shied away.))
((Mustafa Hyder Sayed, Pakistan-China Institute)) ((Male, English))
“At that time, we had a lot of terrorism. There was a lot of turmoil, and it [Pakistan] wasn’t seen as one of the best places to invest in, particularly. And China reposed its trust in Pakistan at that time.”
((NARRATOR))
The Pakistani government says CPEC has so far created 200,000 jobs, built more than 1,400 kilometers of highways and roads and added 8,000 megawatts of electricity to the national grid. And in the past 18 months, the country’s deep-sea southwestern port of Gwadar has handled 600,000 tons of cargo.
But, observers say, CPEC has not turned Pakistan’s economy around, and now Islamabad owes nearly one-third of its overwhelming external debt to Beijing.
((FOR RADIO: Economist Ammar Habib Khan says one reason for that is the financial burden that came with the mega-project.))
((Ammar Habib Khan, Economist)) ((Male, English))
“A lot of that infrastructure came at a fairly high cost, and a lot of that borrowing was essentially in dollar terms and fairly higher than market terms. Because of that, Pakistan continues to make significant dollar payments for the Chinese debt. Because of that we continue to have a current account crisis and some serious debt issues.”
((NARRATOR))
But Khan, like many others in Pakistan, rejects the idea of a Chinese debt-problem. Instead, he blames Islamabad for mismanaging resources.
Beijing also denies Washington’s accusation that it traps countries in debt in the guise of investment.
Sayed says Pakistan has plenty of say in CPEC projects through the Joint Coordination Committee that includes both Chinese and Pakistani officials.
((Mustafa Hyder Sayed, China-Pakistan Institute)) ((Male, English))
“So, this perception of China coming in by predatory financing and weakening a host country and gaining political influence is unfounded.”
((NARRATOR))
Khan says Pakistan chose development over debt.
((Ammar Habib Khan, Economist)) ((Male, English))
“The choice was simply whether to have a power plant or whether to have 12 to 15 hours of electricity shutdowns. So yes, CPEC did provide Pakistan with a base of necessary infrastructure required for industrial growth. Meanwhile, Western countries have not been able to provide the same over the last many years.”
((NARRATOR))
A 2021 report by U.S.-based research lab AidData found that China spends over eight times more in Pakistan than the United States does. Chinese loans are geared toward hard infrastructure, while the U.S. spends more on governance and social infrastructure, according to the report.
Experts say to lessen the debt burden from CPEC, Pakistan must efficiently use the energy and infrastructure it acquired through the mega-project and strengthen its domestic production and exports.
((Sarah Zaman, VOA News, Islamabad))
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