CPEC not an aid to Pak, it ensures guaranteed profits for Chinese enterprises: Alice Wells

Alice Well, US Acting Assistant Secretary for South and Central Asian Affairs on Thursday deemed China Pakistan Economic Corridor (CPEC) a form of financing ensuring guaranteed profits for Chinese state-owned enterprises, and pointed out that the multi-billion dollar project is certain to take a toll on Pakistan's economy at the time of the repayment of the debt and dividend in the coming years. The China-Pakistan Economic Corridor (CPEC) is a huge project which is being made with an objective to extend from the western Chinese city of Kashgar to Pakistan's port of Gwadar, which is situated close to Iran and Persian Gulf shipping regions.

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Addressing the event at the Wilson Center here on China's Belt and Road Initiative (BRI) in South and Central Asia, Wells said that the lack of transparency in the CPEC could foster corruption and increase the project cost, thereby resulting in an even heavier debt burden for Pakistan.

"Because it is clear or needs to be clear that CPEC is not about aid, this is almost always the form of loans or other forms of financing, often non-concessional with sovereign guarantees or guaranteed profits for Chinese State-owned enterprises that are repatriated to China," Wells said.

"Now together with non-CPEC Chinese debt payment, China is going to take a growing toll on Pakistan's economy, especially when the bulk of payment start to come due in the next four to six years. Even if loan payments are deferred they are going to hang over Pakistan's economic development potential, hamstringing Prime Minister (Imran) Khan's reform agenda. The lack of transparency can increase CPEC cost and foster corruption, resulting in an even heavier debt burden for Pakistan," she added.

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Acknowledging the speculation that the CPEC has helped in creating jobs in Pakistan, Wells said that the project relies primarily on Chinese workers and supplies even amid rising unemployment in Pakistan.

CPEC Project

The CPEC is a multi-billion dollar development project, with a planned network of roads, railways and energy projects linking China's Xinjiang Uyghur Autonomous Region with Pakistan's strategic Gwadar Port on the Arabian Sea. This is a noteworthy project of Beijing's more extensive Belt and Road Initiative. Post the 2015 Xi Jinping visit to Pakistan, on April 20, 2015, the initiation of China-Pakistan Economic Corridor (CPEC) was executed. The expense of this project is roughly $62 billion. According to reports, Wang said that out of 22 collaboration extends in Pakistan, nine activities have been finished up until now.

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(With ANI Inputs)