Addicted To Chinese Money, Pakistan Owes Beijing More Than IMF Over Next Three Years

Addicted To Chinese Money, Pakistan Owes Beijing More Than IMF Over Next Three YearsPakistani PM Imran Khan and Chinese President Xi Jinping (Representative Image) ( Pic Via PTV World)

Currently in the midst of a financial crisis, Pakistan is heavily indebted to both China and the International Monetary Fund (IMF), but the amount of money it has to repay the former in the next three years vastly outstrips that which has to be repaid to the latter, reports Bloomberg.

In the said time frame, Islamabad will have to make payments to the tune of $6.7 billion to Beijing, while the amount that must be paid back to the IMF will be around $2.8 in this period.

China poured huge sums of money into Pakistan as part of its ambitious Belt and Road Initiative (BRI), but no one knows how exactly Pakistan will be able to repay the huge sums which have been lent to it considering its economic and political troubles.

According to researcher Haz Faizan of the Karachi-based Optimus Capital Management, most of the lending by China to Pakistan occurred very recently.

“A bulk of the Chinese lending happened about two years ago when dollar reserves were dwindling, so the government kept borrowing and borrowing,” he said.

In a report released in 2018, the Center for Global Development including Pakistan among its list of eight countries that could face debt-sustainability problems in the future due to their participation in BRI.

“Enthusiastically taking Chinese money, they looked at the short-term deals for shoring over the nancial crisis, without realizing its medium- and long-term implication, and the Chinese leverage over Pakistan. And it has painfully come home to be realized,” said member of the Centre for the Study of Pakistan at SOAS University of London, Burzine Waghmar.