CPEC: It is estimated that approximately $60 billion of direct and indirect investment is supposed to come into Pakistan from this mega project in the next decade. For its Belt-and-Road Initiative, China called Pakistan as a key peg
In a major development, Pakistan government has decided to shelve off the investment for biggest Chinese ‘Silk Road’ project, citing concerns on the country’s mounting debt burden. Pakistan’s Railway Minister Sheikh Rasheed announced on Monday that the government, led by Prime Minister Imran Khan, is cutting the share of the China-Pakistan Economic Corridor (CPEC) in the railways from $8.2 billion to $6.2 billion.
The mega project was to revamp Pakistan’s about 1,900-kilometer colonial-era railway line from Karachi to the northwestern city of Peshawar under an ongoing bilateral economic development mega project being funded by China. While speaking to reporters in Lahore, Rasheed said that Pakistan is a poor country and it cannot afford the huge burden of the loans, despite the fact that CPEC is like the backbone for Pakistan. He also added that the government is planning to lower the costs further so as to reduce the burden of Chinese debt, according to several media reports.
It may be noted that the changes by the new government led by Khan are part of the efforts to get a handle on the country’s budget as well as to scrutinise infrastructure and power projects worth $62 billion, by the Chinese government, which were initiated under the CPEC by the PML(N) government.
It is estimated that approximately $60 billion of direct and indirect investment is supposed to come into Pakistan from this mega project in the next decade. For its Belt-and-Road Initiative, China called Pakistan as a key peg, while Chinese president Xi Jinping has hailed the initiative as “the project of the century” and compared it with the ancient Silk Road that made the country a hub of international commerce.
Interestingly, the US government has criticised the Belt-and-Road Initiative projects, while showing concerns that these loans could turn into debt traps for poor countries, which are unable to pay them back. And apart from Pakistan, Malaysia’s prime minister Mahathir Mohamad also cancelled some $22 billion worth of Chinese-backed infrastructure projects last month.