18 March 2019 | By GCR Staff
Pakistan is at least $10bn in debt to China for work carried out on the China–Pakistan Economic Corridor (CPEC), one of the centrepieces of the China’s Belt and Road Initiative (BRI), according to evidence given to the Senate Armed Services Committee last week.
General Joseph Dunford, chairman of US Joint Chiefs of Staff, said the debt was evidence of Beijing’s use of “predatory economics” to expand its global influence.
He said: “Pakistan owes China at least $10bn for the construction of Gwadar Port and other projects … China is diligently building an international network of coercion through predatory economics to expand its sphere of influence.”
He also alleged that participation in BRI schemes come at “a steep cost” when promises of investment go unfulfilled and international standards and safeguards are ignored.
Gen Dunford also cited Sri Lanka’s decision to grant China a 99-year lease and 70% stake in the port of Hambantota in 2017 and the $1.5bn construction debt built up by the Maldives.
General Dunsford, seen in Times Square after speaking at the UN (Public Domain)
Dunford warned that if China’s “predatory” loans were left unaddressed, it would have serious implications for the US military.
The official website of the CPEC argues that the investment in infrastructure will pay for itself through increased economic growth brought by improved communications and industrial investment and greater flows of goods and labour.
The official CPEC plan argues that Chinese capital and technology complements Pakistan’s “rich human and natural resources, huge potential for economic growth and broad market prospects besides a geostrategic location”.
Altogether, China has invested $60bn in BRI projects in Pakistan as part of roughly $340bn in spending between 2014 and 2017, according to a count kept by the American Enterprise Institute. The institute estimates that China’s total spending on BRI-badged schemes will pass the $2 trillion mark some time in the 2030s.
Top image: The strategic Balochistan port of Gwadar on the Arabian Sea links northern Pakistan to western China (GNU)