• Saturday, September 22, 2018

Pakistan in danger of falling into China’s “debt trap”

Discussion in 'Strategic & Foreign Affairs' started by Men in Green, Mar 9, 2018.

  1. Men in Green

    Men in Green FULL MEMBER

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    Foggy financing.
    Last year, with more than $1 billion in debt to China, Sri Lanka handed over a port to companies owned by the Chinese government. Now Djibouti, home to the US military’s main base in Africa, looks about to cede control of another key port to a Beijing-linked company, and the US is not happy about it.

    Beijing “encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty, denying them their long-term, self-sustaining growth,” said US Secretary of State Rex Tillerson on March 6. “Chinese investment does have the potential to address Africa’s infrastructure gap, but its approach has led to mounting debt and few, if any, jobs in most countries,” he added.

    Some call this “debt-trap diplomacy“: Offer the honey of cheap infrastructure loans, with the sting of default coming if smaller economies can’t generate enough free cash to pay their interest down. In Sri Lanka, acrimony remains around Hambatota and projects like “the world’s emptiest airport.”


    China has characterized its “Belt and Road” initiative as a win-win for its aspirations to become a global trade leader and developing economies’ desire to fund transportation infrastructure. It has certainly filled the vacuum created by a shrinking American presence in global institutions. But as with Western internationalist projects, China is also facing accusations of imperialist behavior when its debt plans go wrong.

    The Center for Global Development, a non-profit research organization, analyzed debt to China that will be incurred by nations participating in the current Belt and Road investment plan. Eight nations will find themselves vulnerable to above-average debt: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan.
    [​IMG]

    The researchers note that they did not estimate how this debt would effect growth, and that they needed to assemble much of their data from media reports. But they still say their evidence should raise concerns about economic distress stemming from debt that would undermine development efforts altogether. In the past, China has responded to the debtors inconsistently and hasn’t followed best practices adopted by international lenders working with poor countries. Sometimes, the debt has been forgiven; other times, disputed territory or control of infrastructure has been demanded as recompense.

    They argue that China should work to bring other countries into their investment programs to spread debt more equally, and adopt stricter standards and more transparency about how sustainable its support for developing economies really is. Some countries aren’t waiting on China to take action: Pakistan and Nepal turned down Chinese infrastructure loans last year in favor of other sources of funding.

    https://qz.com/1223768/china-debt-t...verloads-from-chinas-belt-and-road-plans/amp/

    https://mobile.reuters.com/article/amp/idUSKCN1GK114
     
    Last edited: Mar 9, 2018
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  2. shahbaz baig

    shahbaz baig SENIOR MEMBER

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    We can understand why they are putting pakistan into account. The Djibouti Port. US kindly stay away from pakistan and compete china without force and without propaganda. We as pakistani believe on china's dream but not blindly we know what to do. We are looking for other countries to join us and invest in pakistan rather then putting pakistan into debt Trap country. But yeah it's US who put pakistan in a list of dangrous countries so other countries dont go to invest in pakistan except china. US Stop your hypocrisy..
    Thanks China.
     
    Last edited: Mar 9, 2018
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  3. takeitwithyou

    takeitwithyou BANNED

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    OMG, were you guys taught only to structure a noun, verb, and "U.S." in English class? Where for the love of God does U.S figure in this article?
     
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  4. shahbaz baig

    shahbaz baig SENIOR MEMBER

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    You mean uncomfortable state (US) ? even a love of God cant satisfy to uncomfortable state.
     
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  5. Kaniska

    Kaniska SENIOR MEMBER

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    I think China and Pakistan's interest allign with each other in long run. So irrespective of potential debt situation, China is the best bet for Pakistan to improve its economic situation.
     
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  6. Vortex

    Vortex FULL MEMBER

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    Guys, remember there is no friend in politics or geopolitics affairs.

    So we should stay very carefull with loans. But in the case of China and Pakistan, I think that we understand that China needs Pakistan and Pakistan needs China.

    But at the end, it will be the ability of China to support Pakistan's debt "cost" in the time. And that will also depend on their economical situation. I read somewhere that most Chinese companies have big debt, and per western standard these companies would have been bankrupt long time ago. So we should stay very careful.

    And It remind me that we don't know the real contracts signed with them and... knowing our politicians, I have some reservations and concerns about this point.

    Anyway, water and debts will be the next starter for world war.
     
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  7. Kaniska

    Kaniska SENIOR MEMBER

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    I feel that in case Pakistan, it should be fine. China need Pakistan in equal term as Pakistan need China too...China has dependency on Pakistan which is not related to only economy only....So this will help you to gain some additional cushion with respect to China at the time of negotiation of any deals.
     
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  8. Majid Awan

    Majid Awan FULL MEMBER

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    competing your competitor by propaganda and force, do you even have any idea what propaganda means, because we know what propaganda is and no country mention its name when doing it. :azn:
     
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  9. takeitwithyou

    takeitwithyou BANNED

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    @shahbaz baig I found you your spirit animal. Do me a favor and decode his post for me. On second thought don't- nvm.
     
  10. Signalian

    Signalian SENIOR MEMBER

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    All of Pakistan should be given on lease to China for 25 years, so the desi-corruption and Political system from pre-Mughal upto British era upto now should end forever.

    After 25 years, the old system will be dead, the new generation will lead the country through new policies and system.
     
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  11. protest

    protest BANNED

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    So basically Pakistanis can't run their own country right.
     
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  12. Signalian

    Signalian SENIOR MEMBER

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    wrong. 71 years and still going. Things can ofcourse get better.
     
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  13. Divergent

    Divergent SENIOR MEMBER

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    Debt is modern day slavery.
     
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  14. shahbaz baig

    shahbaz baig SENIOR MEMBER

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    Yup i am the eagle whats your animal spirit?
    Well mostly donkey doesn't understand.
     
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  15. gutto786

    gutto786 FULL MEMBER

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    The problem is we are emotional people. May be people on PDF know what Pakistan needs to do. But in reality is Pakistan govt. really acting upon protecting Pakistan's interest. I am not too sure we are protecting our interests. Diplomacy is like chess, chanting deeper than oceans and higher than mountains is OK and good diplomacy but protecting interests when doing contracts is a must must
     
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