America’s top diplomat in South Asia Alice Wells just stopped short of calling China a loan shark today. In a message to China, the US said take some pity on Pakistan and, stop the “unfair and predatory” lending.
America has criticised China of crippling Pakistan with multi-billion dollar loans which would keep Pakistan in servitude to China not for years, but for decades.
The corruption-shrouded China-Pakistan economic corridor(CPEC) has become a big flashpoint.
Alice Wells, the United States’ point person in South Asia enumerated America’s concerns over the CPEC connected projects.
Firstly, there is no transparency as it is the case with China’s shenanigans, secondly, unfair profits to Chinese firms. Recently, Chinese power companies scammed Pakistan of $680 million. Chinese investments under CPEC is valued at over $60 billion.
It is not the first time Alice Wells has warned that China’s friendly loans to Pakistan are a debt-trap. In four to six years when the repayments for these loans begin, Pakistan may have to empty its coffers each time an interest payment is due to China.
Pakistan will not able to help itself, so, Alice Wells said China must either waive debt or renegotiate the loans and create a fair and transparent deal for the Pakistan people.
However, it seems Pakistan and China have written a response together to the criticisms over a con-call.
Both countries said it is an “all-weather friendship”, the timing is just right with the two countries celebrating the anniversary of 69 years of friendship.
From Pakistan’s standpoint, Alice Wells’ comments on Pakistan’s debt obligations are contrary to the facts. Pakistan claims that total public debt relating to CPEC projects is less than even 10 per cent of the total debt.
It comes with a maturity period of 20 years meaning there is no need to payback China right away. Pakistan was quick to reiterate the terms of the deal perhaps, it is too big a burden to talk about in public and the US is too big a power to offend.
On the other hand, China’s response was characteristic – it called Alice Wells irresponsible, her speech totally baseless and just a repetition of her same old tune after that followed the mention of the “all-weather relationship” with Pakistan.
In its defence, China said it will never force Pakistan to pay back the debts and China’s loans have no strings attached.
Recently, the G20 members had adopted a debt service suspension initiative for the poorest countries, China says it supported Pakistan to be included and is ready to provide relief, then, China listed its contribution in helping Pakistan.
The release said since its implementation, the CPEC has brought $25 billion in direct investment and created more than 75,000 jobs for Pakistan. China has been the major source of FDI for Pakistan in the past five consecutive years. It indirectly accused America of not doing enough to help Pakistan.
The US foreign direct investment was just over $1 billion dollars between 2012 and 2019. In the end, China said we need no teachers, especially a teacher like the USA.