The Pakistani leader goes to China seeking help with the debt crisis

The Pakistani leader goes to China seeking help with the debt crisis

Pakistani Prime Minister Imran Khan and Chinese President Xi Jinping held a meeting in Beijing as Pakistan faces a debt crisis and expects additional financial support for China.

Imran Khan, who was greeted by Xi in the Great Hall of the People on November 2, said he came to learn from China's experience of fighting poverty and corruption.

Imran Khan, who took office in August, said his government had "inherited a very difficult economic situation."

Xi said he is "ready to work with the Prime Minister to strengthen the strategic all-weather partnership between China and Pakistan and build a new era of China-Pakistan destiny." None of the leaders, however, announced offers.

Pakistan has already raised billions of dollars from China in recent years to finance major infrastructure projects, including a major new Pakistani port and transportation and energy links that are part of Xi's belt and road initiative.

In total, China has pledged more than US $ 60 billion to Pakistan to provide loans and investments in roads, ports, power plants and industrial parks.

In response to the debt crisis, Pakistan is seeking a US $ 8 billion rescue loan from the International Monetary Fund, which will send a team to Pakistan next week.

In order to limit the IMF's lending, Islamabad is also seeking new loans from Saudi Arabia and China, whose discussion is likely to dominate Khan's visit to Beijing.

In the background, US objections to any steps by the IMF to grant loans to Pakistan that would serve to refinance its debt substantially to China. Washington holds the largest share of voting rights in the IMF and strongly influences the decisions of last resort's international lender.

China and Pakistan refer to themselves as "all-weather friends". They have a common rival – India – and have built up a network of military, political and economic relations over the years.

Pakistan was among the most enthusiastic supporters of Xi's belt and road projects, which want to re-establish China as the center of world trade by rebuilding and expanding economic and transport links to Europe, Africa, the Middle East and South Asia.

Pakistan's financial crisis put pressure on Imran Khan since taking office in July. He had to deal with increasingly unsustainable debts, trade deficits, a falling currency and public anger over rising commodity prices.

Imran Khan initially pledged to slow borrowing, but was forced by the burgeoning crisis this month to catch up with another round of IMF rescue loans.

As an opposition politician, the former cricketer asked if Islamabad's partnership with China would benefit Pakistan. Since taking office, his government has re-evaluated some aspects of the China-Pakistan economic corridor, including reducing the development of the Pakistani port on the Arabian Sea in Gwadar.

But Imran Khan has mitigated some criticisms of China-sponsored projects, and his Finance Minister, Asad Umar, said a review of the contracts signed by the previous government has not revealed any irregularities.

Other countries, including Malaysia, have also withdrawn from China-funded projects, and much concern has been expressed about the Sri Lanka case.

The Government of the Indian Ocean Island State has lent billions of China to build a port and an airport. However, when it was unable to make payments, it signed an agreement that gave a Chinese company an 80 percent interest and a 99-year lease for the failing port.

Chinese Foreign Ministry spokesman Lu Kang said on October 31 that economic projects in Pakistan are "mutually beneficial" and "play an important role in improving people's livelihoods and promoting economic development."

Lu claimed that Pakistan does not see projects as the main cause of the "financial difficulties it is currently facing".

With reports from AFP, AP and Reuters
Leave a comment

Send a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.