Defaults imminent, anger builds in Pakistan against China
By Manish Anand
New Delhi, February 18: China accounts for one-fourth of Pakistan’s foreign debt. On the lines of Sri Lanka, China is missing from action in Pakistan. Sri Lanka and Pakistan are signing on dotted lines to avail the bail out packages from the International Monetary Fund (IMF).
Pakistan is now realizing what the strategic experts have long been stressing that China never forgets its money and it doesn’t forgive defaulters. In Sri Lanka, China built the base at Hambantota Port to further its aims to lord over the Indian Ocean. China sold the Dubai dream to Pakistan with Gwadar Port. Both the nations are paying heavy prices for the two deep assets of China, forced upon Sri Lanka and Pakistan to serve Beijing’s strategic interests.
Pakistan is bending back to accept the diktats of the IMF for $1.27 billion loan to avert an imminent default. Sri Lanka had declared default on the serving of the foreign debt last year, and the IMF has not approved the bailout package, which still continues to be work in progress. Sri Lanka has a total of $52 billion of foreign loans, with one-fourth accounted for by China. Pakistan has a total of $126 billion of foreign loans, and China again accounts for one-fourth of the total external debt.
“According to IMF data, China holds roughly $30bn of Pakistan’s $126bn total external foreign debt. This is thrice its IMF debt ($7.8bn) and exceeds its borrowings from the World Bank and Asian Development Bank combined. So why is mighty China awaiting the green signal from American-led IMF before releasing some relief? Shouldn’t it at least reschedule Pakistan’s debt? Or, better, wipe it off,” asked Pervez Hoodbhoy in an opinion piece in Pakistan’s leady daily Dawn.
Now both Pakistan and Sri Lanka have steeply hiked the electricity rates to shore up the revenue to please the IMF. Incidentally, the Pakistani intelligentsia is blaming the Army for chaining the country to the Chinese debt-trap, it was the ruling elites of Sri Lanka such as former President Rajapaksa Gotabaya, who bound the island nation to Beijing’s debt-trap policy with projects which were not required by the country.
Ironically, Sri Lanka and Pakistan are not export driven economy. Both the countries are consumption economy. While Sri Lanka is a plantation economy, Pakistan is agrarian. Yet, the ruling elites of the two countries bound China into ports, which are meant for export driven economies.
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