China’s Belt & Road initiative is a yet another debt trap! Three years into the project, Pakistan finds self waist deep in debt

Aug 05, 2018 News

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By Abena Rockcliffe-Campbell

Nothing is free. But sometimes the price to be paid is more than what was bargained. Several countries that signed onto China’s Belt and Road initiative are finding this out the hard way.
The glitters that China flaunts are now becoming less attractive as China’s intention to “trap” countries and influence their politics and diplomacy are becoming clearer. In a nutshell, these countries have, in Guyanese parlance “dig their own grave.”
This newspaper recently highlighted the fact that while some countries are regretting the pen used to sign onto the initiative; Guyana recently signed a Memorandum of Understanding (MoU) with China, thus making Guyana the 71st country to be listed as part of the initiative.
Kaieteur News will highlight how China has been targeting weak and corrupt governments to sign onto its initiative and how the people of those countries are suffering as a result. All the countries that have signed onto the project thus far have something that China wants.
For Pakistan, it’s a route to heighten China’s trade activities.
China has a US$62B plan in the making for Pakistan and has already pumped several billion dollars into the country through loans over the past three years.

But, with all this money floating around, the people of Pakistan are crying out as they are no better off. In fact, the Wall Street Journal recently reported that Pakistanis are complaining about the shortage of jobs and even basic essentials like drinking water.
Relations between China and Pakistan on this initiative have been described as opaque, corrupt and set only to benefit China and Pakistan’s ruling politicians.
Imran Khan, Pakistan’s recently elected Prime Minister, quoted, “The real reason for building these loss-making megaprojects has always been massive kickbacks.”
On July 22, last, the Wall Street Journal reported that Pakistan’s first metro, the Orange Line, was meant to be an early triumph in China’s quest to supplant U.S. influence and redraw the world’s geopolitical map.
The Journal reported, “Financed and built by Chinese state-run companies, the soon-to-be-finished overhead railway through Lahore City is among the first projects in China’s $62 billion plan for Pakistan.”
According to the Journal, China hoped the $2B air-conditioned metro “would help make Pakistan a showcase for its global infrastructure-building spree. Instead, it has become a (symbol) of the troubles that are throwing China’s modern-day Silk Road initiative off course.”
However, it was reported that three years into China’s programme there, Pakistan is heading for a debt crisis, caused in part by a surge in Chinese loans and imports for projects like the Orange Line, which Pakistani officials say will require public subsidies to operate.
Some ministers in the recently replaced government said in interviews that they should have negotiated better terms with China, and been more open about details.
Pakistan is now one of several countries grappling with the financial and political fallout of taking on so much Chinese debt. All these loans given thus far have been contingent on using Chinese contractors.
U.S. officials have called China’s Belt and Road Project, “debt-trap diplomacy.”
The European Union and Indian officials also have stepped up criticisms of the Belt and Road initiative, saying it lacks transparency and sustainability and is designed to expand China’s strategic influence.
With the U.S. freezing all security aid and winding down economic support this year, Pakistani officials now say its financial future lies in emulating China’s emergence as a low-cost manufacturing hub.
Some diplomats believe China will keep throwing money at Pakistan, regardless of the returns. China and Pakistan have had close ties since the 1950s, when each saw the other as a counterweight to India.
Many Pakistani and Chinese business leaders are skeptical about Pakistan’s potential as a trade route, especially if railway upgrades are cancelled.
The only land route across the border into western China is a two-lane road over the 16,000-foot Khunjerab Pass. It is closed four months of the year by snow, and passes through a region claimed by India. On a recent visit, a Journal reporter saw little traffic.
At the other end of the proposed route, Gwadar has failed to attract significant cargo traffic.
Beijing had hoped the Orange Line and other early projects would have been finished in time to help secure victory for Pakistan’s ruling party in July, last, according to people involved.
This did not happen. The country now has a new Prime Minister, Imran Khan. He was elected just two weeks ago.
Last year, the old Prime Minister, Nawaz Sharif, was dismissed as prime minister and in July, was sentenced to 10 years in jail for corruption.

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