China has been investing billions of dollars in Pakistan, but the debt is starting to become a problem. Pakistan is now in a difficult situation, with no easy way out. Can China continue to bail Pakistan out, or will the debt ruin the country? ask Pakistani was physicist and writer Pervez Hoodbhoy.
Hoodbhoy points out that the ‘great expectations’ that CPEC would transform Pakistan’s economy, with $62.5 billion of Chinese investments in infrastructure and electricity generation bringing a new era to Pakistan’s development. Yet Pakistan is in a state of default, seeking $1.1 bn in IMF bailouts. Hoodbhoy contended that the planned development had not worked because infrastructure alone is insufficient; it must be accompanied by human capital, good governance and transparency. Where was the investment used, what were the terms of the agreement, the interest rates, he asked? Much was in the hands of the Pakistan army, which insisted on being the controlling authority of CPEC. There is no evidence of new industries sprouting up and local employment has been small. And while, to counter this, 30,000 Pakistan students were sent to China, they did not acquire the skills necessary for employability in science and engineering.
Hoodbhoy also highlighted China’s ‘invisible’ presence in Gwadar, and Pakistan army machine guns along CPEC highways, a source of resentment for the Baloch people, who feel colonised by Punjab. As for the Chinese, they are very sequestered, with little local interaction. CPEC hasn’t delivered on its promises, and Pakistan has a $30 bn loan to pay, interest unknown. Looking to the future, Hoodbhoy did not envisage Chinese influence in Pakistan growing to the extent once surmised.