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BRI not a ‘debt trap’ but a boost for world economy

2019-06-12 09:35:05 China Daily

Accusations of China''s infrastructure financing ''absolutely wrong'', analysts say

Accusations that China's infrastructure financing under the Belt and Road Initiative, or BRI, are causing huge debts to countries involved and pushing them into a "debt trap" are absolutely wrong, reports and analysts have pointed out.

Since last year, some senior officials from the West, including US Vice-President Mike Pence and Secretary of State Mike Pompeo, have made such allegations without offering any evidence. These false allegations have been refuted by a number of global studies and analysts recently.

The Express Tribune, a major daily English-language newspaper based in Pakistan, published an article on May 27, saying the China-Pakistan Economic Corridor, or CPEC, a project under the BRI, is not a "debt trap" but a boon for Pakistan.

It said China is investing $62 billion in Pakistan through the CPEC, which has enabled the country to avert its energy crisis and has helped build an elaborate network of infrastructure in various parts of the country for the past five years. The CPEC has greatly boosted the economic activity and improved people's life, it said.

Despite several hostile voices saying that the project is a "debt trap" for Pakistan and will hurt the country's economy, Noor Ahmed, secretary of the Economic Affairs Division of Pakistan, said that the country's total foreign debt is about $106 billion. Of which Chinese loans account for only 10 to 11 percent, while the remaining are from the International Monetary Fund, Paris Club, and other Western organizations, according to the Express Tribune.

Ahmed said that China has greatly supported Pakistan and always help the country during tough economic crises. Through the CPEC, China is building infrastructure in Pakistan to save its economy, and some of its money coming into Pakistan are purely an investment, some are interest-free loans, and other loans are on very easy and simple terms.

"If China lends money to Pakistan at one of the lowest interest rates in the world, how can it be a debt trap?" Ahmed said.