Pakistan says debt in CPEC-related projects is just 10%, rejects US’ concern

India has protested over the CPEC which is being laid through Pakistan-occupied Kashmir. (File image)

Pakistan and China on Friday dismissed the US’ criticism of the multi billion CPEC and the issue of “predatory loans”, saying it was an important cooperation project between the two nations who are all-weather friends.

The US’ top diplomat for South and Central Asia Alice Wells on Wednesday said that at a time when the world is reeling from the economic consequences of having shut parts of the economy due to the coronavirus, it is really incumbent upon China to take steps to alleviate the burden this ?predatory, unsustainable and unfair? lending is going to cause to Pakistan.

Responding to the remarks of Wells, who has been critical of the USD 60 billion China-Pakistan Economic Corridor (CPEC), Pakistan’s Foreign Office said that its total public debt relating to the CPEC projects is less than even 10 per cent of the total debt.

Moreover, the public debt obtained from China has a maturity period of 20 years and the interest is 2.34 per cent.

If grants are included, the interest value slides down to about two per cent. The claims made by some of the commentators and public officials on Pakistan’s debt obligations relating to the CPEC are contrary to the facts,? it said in a statement.

The FO reiterated that the CPEC, a long-term project, helped address development gaps in energy, infrastructure, industrialisation and job creation.

Pakistan and China have several mechanisms to discuss matters of mutual interest. Both countries are regularly in touch to address those issues bilaterally,? it said.

The CPEC, a flagship project of the Belt and Road Initiative (BRI) of China, is a transformational project contributing positively and transparently to Pakistan’s national development, the FO said, adding it believes that the regional economic connectivity will provide a critical stimulus for creating a broad-based growth across the region.

The BRI is a multi-billion dollar initiative launched by Chinese President Xi Jinping when he came to power in 2013. It aims to link Southeast Asia, Central Asia, the Gulf region, Africa and Europe with a network of land and sea routes.

India has protested over the CPEC which is being laid through Pakistan-occupied Kashmir.

The FO reiterated that Pakistan and China are ?All-Weather Strategic Co-operative Partners?.

We are engaged in prompting peace, development and stability in the region based on the principles of mutual respect, mutual benefit, win-win cooperation and shared development. Our ties are based on deep mutual trust and understanding,? it said.

Meanwhile in Beijing, Chinese Foreign Ministry spokesman Zhao Lijian accused the US of ?distorting and smearing? mutually beneficial cooperation between China and South Asian countries. Wells had also said that the US hopes Nepal will accept USD 500 million from the Millennium Challenge Cooperation, a US Government foreign aid agency. She hoped Nepal doesn’t take dictation from China.

Reacting to her remarks on Pakistan and Nepal, Zhao said the comments reflect the US’ ?narrow mindedness and bias.? ?China and South Asian countries are good neighbours, good friends and good partners. With mutual respect, equality and joint development, we help these countries enhance their development capabilities,? he said.

Based on their needs, we provide financial support and launch cooperation projects. We never impose on them or attach any political strings. We never ask them to prove anything,? he said. On Thursday, the Chinese embassy in Islamabad rejected the remarks of Wells, saying ?we need no teachers, especially a teacher like the US?.

It said that China will “never force Pakistan to pay back debts” and that “China’s loans have no strings attached”.

The embassy also asked the US that it should not comment on China’s ties with Pakistan as Beijing had no intention on commenting on Pakistan-US relations.

It said that the CPEC is an important cooperation project between the governments of China and Pakistan. It has always adhered to the principles of mutual benefit, win-win cooperation, openness and transparency.

“The planning and implementation of the projects are carried out by the two sides through thorough consultations based on equality and scientific study. The Chinese companies under the project are all leading companies in their respective sectors and operate in full compliance with local laws and regulations,” the embassy said.

It claimed that the CPEC has so far brought USD 25 billion in direct investment and created more than 75,000 jobs in Pakistan, adding that China was the major source of foreign direct investment for Pakistan in the past five consecutive years.

“In the next stage of the project, both sides will strength cooperation on healthcare, industrial development, agriculture and education. The CPEC will give a new impetus to Pakistan’s economic revival even in the post COVID-19 period,? the embassy said.

Wells had also commented on the CPEC in November 2019, when she said that the project was harmful as it would take a toll on Pakistan’s economy in the future.

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