Pakistan Cuts Budget for “Silk Road” Project with China
Pakistan announced on Monday that the budget for its massive infrastructure project with China would be cut by $2 billion, pointing to a national concern over rising foreign debt.
Sheikh Rasheed, Pakistan’s Federal Railways Minister, made the announcement in Lahore, Pakistan at a press conference. “The estimated cost of CPEC (China-Pakistan Economic Corridor) was $8.2 billion. Today, the estimated project cost stands at $6.2 billion,” he said.
CPEC is a mega-initiative developed by both China and Pakistan to renovate a “colonial-era,” 1,163-mile-long train line stretching from Karachi to northwestern Peshawar. This infrastructural pursuit is part of China’s larger Belt and Road Initiative (BRI) and represents China’s largest-ever infrastructural investment in Pakistan.
Launched in 2013 by Chinese president Xi Jinping, the BRI is designed to link China with Europe along the lines of the historical Silk Road. China is massively invested in the policy, and it spends approximately $150 billion a year in the 68 nations that have already agreed to the project.
Many world leaders take China’s huge push towards promoting global interconnectedness as a sign that the nation is ready to act as a world leader. Economists believe that China wishes to establish regional supremacy within Eurasia, similar to the kind the United States enjoys within the Transatlantic region. Investment in this kind of infrastructure, according to Xi and other Chinese leaders, is China’s most important foreign policy.
But while Pakistan and China have shared hopes in establishing CPEC and promoting China’s BRI in the past, current Pakistani Prime Minister Imran Khan has expressed reservations over partnering with China.
Khan’s greatest fear about the project is the potential increase in Pakistan’s foreign debt. The Prime Minister, who has served as Pakistan’s leader for slightly over a month now, has already urged caution in regards to potentially crippling foreign loans. In his press conference, Rasheed said “ultimately, our poor nation will have to pay back the Chinese loan."
Pakistan is not the only nation that has grown cautious in the face of China’s rising economic influence. Sri Lanka, Malaysia, and the Maldive — all with recently changed administrations — have all questioned the legitimacy of BRI deals their predecessors had made with China.
Though Rasheed reiterated Pakistan’s commitment to working alongside China for CPEC, the Pakistani government has expressed a continued desire to review all BRI contracts with China, not only CPEC’s, to ensure that all deals were negotiated fairly.