Financial and economic experts in Pakistan have said that budget proposals announced for fiscal 2017-18, have a clear and visible Chinese footprint. A majority believe the budget is more or less an extension of the China-Pakistan Economic Corridor (CPEC) initiative, reports the Dawn in an op-ed. They see it as an attempt by the government to complete as far as possible all CPEC-related energy and road development projects before heading into the 2018 elections to secure an endorsement from voters.
Using the federal Public Sector Development Programme (PSDP) as a medium to divert funds for the CPEC-related projects, Pakistan’s Finance Minister Ishaq Dar has, according to these experts, set aside Rs.180 billion — or slightly less than a fifth of the total budget outlay for CPEC projects. A detailed study of the budget clearly indicates that energy and road development projects, directly or indirectly linked with the CPEC, will consume a better part of the cash allocated for the PSDP.
The highest priority has been given to the transport and communication sector with an allocation of Rs.411 billion, including Rs.320 billion for highways. The energy sector has been allocated Rs.401 billion. China has also emerged as the single largest lender of money to Pakistan ever since the two countries decided to undertake the CPEC project a little more than two years back.
Beijing will provide loans of Rs.168.3 billion, including Rs.1.3 billion as grants for the international airport and a vocational training centre in Gwadar. Over 55 percent of the Chinese loan, or Rs.93.4 billion, is meant for the Orange Line Metro Train project in Lahore. The amount of Chinese loans booked in next year’s budget is more than 26 percent greater than the loans of Rs.132.8 billion received from Beijing in fiscal 2016-17.
“The Chinese footprint on Pakistan’s economy is expanding as the CPEC initiative nears completion. I don’t consider it a bad thing for the country as long as the government decides to make public the details of the cost of the deals made with China’s government and its firms to trigger a healthy debate, and protect the interests of the local businesses and investors,” the Dawn quoted a Lahore-based financial analyst, as saying.
The analysts have, however, warned the establishment to ensure that there are no slippages in tax and non-tax revenues, as this could affect the balance between what they called “expansionary development spending and fiscal sustainability” in the election year.