IMF Won't Stop China From Turning Pakistan Into The Next Sri Lanka

[AZ1]

Only one port is developing in the world and that is cha cha cha bahaar

 

[Max]

I don't care what China does with Gwadar within it's forty years lease.

Pakistan must stop borrowing money and cut expenses, increase tax base and utilize free trade agreement with China.

 

[Laozi]

No it can't. What are they going to do? Force us to pay back the loans? Not use the port? OBOR is their power projection tool, not ours. Its in their interests that it continues to function. Obviously they don't want to be punked by people who refuse to pay debts. You should read terms and conditions before you sign agreements.

Sri Lanka had to hand over its port to China when it failed to repay China. Don't underestimate China where recovery of dues is concerned.

 

[055_destroyer]

So many reasonable arguments like these we have dismissed as western propoganda.
Sri Lanka is clearly an example. A 100 year loan. Chinese are deceptive ruthless people.

Of cos Sri Lanka is in great trouble due to its anti-China government install by RAW.

https://www.scmp.com/week-asia/poli...turn-means-china-india-tug-war-over-sri-lanka

If the country in debt remains friendly to China, we can write off.

https://internationalfinance.com/china-writes-off-ethiopias-loan-interest-debt-until-2018-end/​

 

[Cash GK]

IMF Won't Stop China From Turning Pakistan Into The Next Sri Lanka

A $6 billion loan approved from the International Monetary Fund this week will ease Pakistan’s debt problems, for now. But it won’t stop China from turning the country into the next Sri Lanka.

China has been very close to Pakistan in recent years, for a couple of reasons. One of them is that Pakistan is a “natural” ally in Beijing’s long-time efforts to contain India.

The other reason is that Pakistan offers a “natural corridor” between western China and the Indian Ocean, and, therefore, an alternative route to Middle East oil supplies and the riches of Africa.

Pakistan Underperforms Emerging Markets

Koyfin
That’s why Beijing has been helping Pakistan build the China Pakistan Economic Corridor (CPEC), which stretches from Western China to the Indian Ocean.

While CPEC benefits China, this project benefits Pakistan too. It’s a big leap forward, as the country strives to transition from an emerging to a mature economy, creating a lot of jobs in the process.

But China’s involvement in the project hurts Pakistan, too. It adds to Pakistan’s corruption, since it involves state owned companies on both sides of the partnership.

Pakistan's Corruption Index

Koyfin
Meanwhile, corruption keeps pushing the costs of the project higher by the day.

As of 2019, the cost of CPEC projects is $62 billion, up from the original value of $46 billion back in 2014.

And that makes Pakistan more indebted to China, which has been financing the project. In fact, Pakistan’s external debt took off shortly after CPEC was launched.

Growing indebtedness comes at a time when the country is already living beyond its means, as evidenced by persistent current account deficits, government debt, and external debt.

Pakistan vs Sri Lanka Key Economic Metrics

Country/Metric
Pakistan Sri Lanka
GDP $312.57B $88.90 billion
GDP Annual Growth 5.2% 3.70%
Current Account to GDP -5.8% -3%
Government Debt to GDP 72.5% 82.9%
Foreign Currency Reserves $14950.10million 1085177 LKR Million
Government Debt to GDP -6.6% -5.3
Source: Tradingeconomics.com 2/4/2019

Pakistan recorded a Current Account deficit of 5.8% of GDP in 2018, according to Tradingeconomics.com. The country’s Current Account to GDP averaged -2.35% from 1980 until 2018, reaching an all-time high of 4.90% in 2003 and a record low of -8.50% in 2008.

Pakistan accumulated a government debt equivalent of 72.5% of GDP in 2018, up from to 67.20% in 2017. The country’s government debt to GDP averaged 69.30% from 1994 until 2018, reaching an all-time high of 87.90% in 2001 and a record low of 56.40% in 2007.

Pakistan’s external debt jumped to 105841 USD Million in the first quarter of 2019 from 99086 USD Million in the fourth quarter of 2018.The country’s external debt averaged 53029.34 USD Million from 2002 until 2017, reaching an all-time high of 88891 USD million in the fourth quarter of 2017 and a record low of 33172 USD million in the third quarter of 2004.

Meanwhile, Pakistan’s foreign currency reserves and foreign capital flows have been falling rapidly.

That’s why the country had to appeal to China and Saudi Arabia for loans to deal with the situation. But these funds haven’t been sufficient to ease Pakistan’s Current Account crisis so the country had to appeal to IMF for the $6 billion loan.

The trouble is that the CPEC project is far from over, and the costs of completing it keeps on rising.

And that makes it very likely that Pakistan will have to reschedule its debt several times before it’s over, and share the same fate with Sri Lanka -- swapping debt with equity, which in essence will hand CPEC to Beijing.

That’s the model China used in rescheduling Sri Lanka’s debt, turning the country’s Hambantota port officially into China’s own port, for 99 years. A milestone deal signed early last year gives China Merchants Ports Holdings—an arm of the Chinese government—70% stake in the Indian Ocean’s prominent outpost.

Like CPEC, the Hambantota port construction began with loans from China. But when Sri Lanka could not repay the loans, Beijing converted these loans to equity, in essence turning Sri Lanka into a "semi-colony," in a subtle way.

That’s what will eventually happen to Pakistan when China assumes ownership and control of CPEC, and collect tolls from vehicles that pass through.

https://www.forbes.com/sites/panosm...akistan-into-the-next-sri-lanka/#64663fbd4cc7

Why your *** is burning

 

[Crystal-Clear]

western propaganda. cia paid article.

 

[Sine Nomine]

Where the Iraqis not wise and ignoring the noise, avoiding the clutter when their nation was destroyed and millions dead upon the say so of false allegations? The same people who made those allegations are now claiming that CPEC will damage Pakistan.

Iraqis themselves and their neighbours are too be blamed.

 

[khail007]

For success of CPEC Pakistan is completely dependent on China.

To some extent true, as this project is China specific; but not whole truth, there is no condition in any of the CPEC projects that Pakistan should not be beneficial of any specific project.
It is will and planning of Pakistani authorities, businesses and investors to take advantage. The projects benefits are unlimited only the brain of planners will have limitations.

Right now Pakistan has excellent diplomatic and strategic relations with China. But CPEC can be used by China as a stranglehold against your nation if you decides to toe U.S. lines again.

In present scenario no more line towing for US, now it will be give and take, so called free lunch for both parties are over.
Now the line towing responsibility which was previously Pakistan's responsibility transferred to India and that is perfectly suits both nations.

 

[nahtanbob]

The US Greek author of this article is a paid journo. Rent Gwadar to the US and this author will do a 360.

CPEC is here to stay. The same applies for Gwadar. US opposition won't change that fact one bit.

why does US need Gwadar ?

 

[khanmubashir]

Gwadar will ultimately turn into another naval extension port for China...Because In the same region...Gwadar and Gulf ports can not be rich and prosperous together....If Gwadar succeeds the nearest Gulf port will go down.

Actually gwadar is meant to receive and deliver goods from gulf ports and transport em via cpec to and from China and latter cas so it ain't competing with gulf ports but complementing and even increasing there business my child

 

[Zibago]

IMF Won't Stop China From Turning Pakistan Into The Next Sri Lanka

A $6 billion loan approved from the International Monetary Fund this week will ease Pakistan’s debt problems, for now. But it won’t stop China from turning the country into the next Sri Lanka.

China has been very close to Pakistan in recent years, for a couple of reasons. One of them is that Pakistan is a “natural” ally in Beijing’s long-time efforts to contain India.

The other reason is that Pakistan offers a “natural corridor” between western China and the Indian Ocean, and, therefore, an alternative route to Middle East oil supplies and the riches of Africa.

Pakistan Underperforms Emerging Markets

Koyfin
That’s why Beijing has been helping Pakistan build the China Pakistan Economic Corridor (CPEC), which stretches from Western China to the Indian Ocean.

While CPEC benefits China, this project benefits Pakistan too. It’s a big leap forward, as the country strives to transition from an emerging to a mature economy, creating a lot of jobs in the process.

But China’s involvement in the project hurts Pakistan, too. It adds to Pakistan’s corruption, since it involves state owned companies on both sides of the partnership.

Pakistan's Corruption Index

Koyfin
Meanwhile, corruption keeps pushing the costs of the project higher by the day.

As of 2019, the cost of CPEC projects is $62 billion, up from the original value of $46 billion back in 2014.

And that makes Pakistan more indebted to China, which has been financing the project. In fact, Pakistan’s external debt took off shortly after CPEC was launched.

Growing indebtedness comes at a time when the country is already living beyond its means, as evidenced by persistent current account deficits, government debt, and external debt.

Pakistan vs Sri Lanka Key Economic Metrics

Country/Metric
Pakistan Sri Lanka
GDP $312.57B $88.90 billion
GDP Annual Growth 5.2% 3.70%
Current Account to GDP -5.8% -3%
Government Debt to GDP 72.5% 82.9%
Foreign Currency Reserves $14950.10million 1085177 LKR Million
Government Debt to GDP -6.6% -5.3
Source: Tradingeconomics.com 2/4/2019

Pakistan recorded a Current Account deficit of 5.8% of GDP in 2018, according to Tradingeconomics.com. The country’s Current Account to GDP averaged -2.35% from 1980 until 2018, reaching an all-time high of 4.90% in 2003 and a record low of -8.50% in 2008.

Pakistan accumulated a government debt equivalent of 72.5% of GDP in 2018, up from to 67.20% in 2017. The country’s government debt to GDP averaged 69.30% from 1994 until 2018, reaching an all-time high of 87.90% in 2001 and a record low of 56.40% in 2007.

Pakistan’s external debt jumped to 105841 USD Million in the first quarter of 2019 from 99086 USD Million in the fourth quarter of 2018.The country’s external debt averaged 53029.34 USD Million from 2002 until 2017, reaching an all-time high of 88891 USD million in the fourth quarter of 2017 and a record low of 33172 USD million in the third quarter of 2004.

Meanwhile, Pakistan’s foreign currency reserves and foreign capital flows have been falling rapidly.

That’s why the country had to appeal to China and Saudi Arabia for loans to deal with the situation. But these funds haven’t been sufficient to ease Pakistan’s Current Account crisis so the country had to appeal to IMF for the $6 billion loan.

The trouble is that the CPEC project is far from over, and the costs of completing it keeps on rising.

And that makes it very likely that Pakistan will have to reschedule its debt several times before it’s over, and share the same fate with Sri Lanka -- swapping debt with equity, which in essence will hand CPEC to Beijing.

That’s the model China used in rescheduling Sri Lanka’s debt, turning the country’s Hambantota port officially into China’s own port, for 99 years. A milestone deal signed early last year gives China Merchants Ports Holdings—an arm of the Chinese government—70% stake in the Indian Ocean’s prominent outpost.

Like CPEC, the Hambantota port construction began with loans from China. But when Sri Lanka could not repay the loans, Beijing converted these loans to equity, in essence turning Sri Lanka into a "semi-colony," in a subtle way.

That’s what will eventually happen to Pakistan when China assumes ownership and control of CPEC, and collect tolls from vehicles that pass through.

https://www.forbes.com/sites/panosm...akistan-into-the-next-sri-lanka/#64663fbd4cc7

When other countries are blocking funding for our damns and hydroelectric projects China is helping us
Forbes should write down how US government went out it's way to make IMf deal tougher than diamonds for us

For success of CPEC Pakistan is completely dependent on China.

Right now Pakistan has excellent diplomatic and strategic relations with China. But CPEC can be used by China as a stranglehold against your nation if you decides to toe U.S. lines again.

Our relationship with US post Afghanistan will be purely financial in nature with very few strategic deals
As for cpec well it's a key future route for China to develop it's western areas

 

[Laozi]

In present scenario no more line towing for US, now it will be give and take, so called free lunch for both parties are over.
Now the line towing responsibility which was previously Pakistan's responsibility transferred to India and that is perfectly suits both nations.

When other countries are blocking funding for our damns and hydroelectric projects China is helping us
Forbes should write down how US government went out it's way to make IMf deal tougher than diamonds for us

Pakistan should not expect free lunches either from U.S or from China.

It should re-negotiate CPEC which are detrimental to it's economic interest.

America has always looked after its own interest so do not expect China to be any different.

 

[Zibago]

Pakistan should not expect free lunches either from U.S or from China.

It should re-negotiate CPEC which are detrimental to it's economic interest.

America has always looked after its own interest so do not expect China to be any different.

No free lunches pur infrastructure will pay for itself when it will help us decrease oil imports

 

[blain2]

And China will not turn Pakistan into the next SL either and neither will the GoP allow that. Apples and oranges comparisons that leave out a lot of differences between the two countries and their situation vis-a-vis China.

 

[khail007]

Pakistan should not expect free lunches either from U.S or from China.

At least, never from US; Pakistan paid a heavy price but the general impression was and is that Pakistan was beneficial, a wrong concept.

It should re-negotiate CPEC which are detrimental to it's economic interest.

There are re-negotiated priorities on some projects, which were not much feasible at this initial point of time.

America has always looked after its own interest so do not expect China to be any different.

Definitely, any nation will safeguard her interests but lot also depends upon negotiator that how he presents the case for win win situation for both ends.