Islamabad is set to review deals concluded under Beijing’s Belt (BRI) and Road Initiative, the Financial Times claimed in a Sunday report.
Top government functionaries said the Pakistan Tehreek-e-Insaf (PTI)-led government will look into BRI investments and renegotiate a trade agreement inked a decade earlier. The agreement extends unfair advantages to Chinese firms, they said.
Prime Minister Imran Khan has constituted a nine-member committee to evaluate CPEC – the most ambitious part of BRI. The $62 billion-initiative includes a grand revamp of Gwadar, road rail links and power plants worth US$30 billion.
“The previous government did a bad job negotiating with China on China-Pakistan Economic Corridor (CPEC) — they did not do their homework correctly and did not negotiate correctly so they gave away a lot,” industrialist Abdul Razak Dawood, part of the committee said. The team will “think through CPEC – its benefits and liabilities.”
Dawood, an adviser to the prime minister on commerce, textile, industries and investment, said Chinese companies received undue advantages. “It is one of the things we are looking at…,” he said.
Chinese Foreign Minister Wang Yi hinted at Beijing’s willingness to renegotiate the 2006 trade deal over a recent weekend visit. “CPEC has not inflicted a debt burden on Pakistan. When these projects get completed and enter into operation, they will unleash huge economic benefits.”
Dawood suggested placing “everything on hold for a year” till the government got its “act together. “Perhaps we can stretch CPEC out over another five years or so.”
Many functionaries support the idea of extending debt terms and spreading projects over a longer period of time in place of a blanket conclusion.
Islamabad is in the throes of a financial crisis. The government is mulling over a 13th International Monetary Fund (IMF) bailout with an under-pressure rupee rendering debt servicing arduous.
Finance Minister Asad Umar said he was “evaluating a plan that would allow Islamabad to avoid an IMF programme.” New loans from China and possibly Saudi Arabia may present an alternative.
Both, Umar and Dawood emphasised Islamabad would tread with caution over the CPEC review to not offend Beijing. “We don’t intend to handle this process like Mahathir,” told the publication.
Parts of this article originally appeared in the Financial Times.