Planning and Development Minister Asad Umar has stated on Wednesday that Pakistan did not have a “China debt” problem pertaining to loan financing from the China-Pakistan Economic Corridor (CPEC) project.
While addressing a presser in Islamabad, the planning minister acknowledged that Pakistan had a debt servicing and debt sustainability challenge but stressed that “we do not have a China debt problem.”
It is pertinent to note that Asad Umar was responding to a recent report by a US-based international development research lab, AidData.
The report has raised four main issues about CPEC: lack of transparency, imposition of secret loans on Pakistan, loans being expensive and Pakistan’s debt rising to a dangerous level because of CPEC.
While refuting the the claims, Asad Umar said that “Parliamentary oversight is present over it (CPEC),” he said.
Umar further revealed that at the very beginning of the project, the government had provided the significant information to the IMF which was based on the data provided by NEPRA.
Regarding the purported issuance of hidden debt, the planning minister said: “We tried to think about it but [only one thing] comes to our mind that maybe they are calling sovereign guarantees for any loan or project as secret or hidden debt.”
He said that the government, instead of putting up its own cash, utilized measures such as sovereign guarantees or standby credit to support the private sector in making investments.
Asad Umar further added that China had provided various grants as well for different CPEC projects and if they were included then “the average rate of the government-to-government loan is less than 2pc”.
While responding to the reports of Pakistan’s debt reaching a “dangerous level”, he said Chinese debt comprised only 10pc of the country’s general debt (domestic and foreign) and 26pc of its external debt.
“So the 74pc of the [loan] money we took from the rest of the world — mostly from the West and multilateral agencies — [somehow] doesn’t endanger Pakistan but it faces a threat from this 26pc? This is a completely wrong argument,” he maintained.
Umar also refuted the claims that the government is giving preferential treatment to Chinese investors, saying that the same conditions were devised and offered to the world for setting up power projects.
“Only Chinese investors came to set up [power plants] under those conditions […] so this policy was not made just for the Chinese but for the whole world,” he said.
Umar went on to criticize the local media for not questioning the foreign reports and believing them “without due verification and understanding”, adding that “this is neither good journalism, nor are you serving Pakistan.”
While responding to a question on the lack of employment opportunities created from CPEC projects, Umar concluded by stating that the first phase CPEC was not to generate employment.
