Umar rejects US diplomat's assertion

Federal Minister for Planning, Development & Reform Asad Umar on Saturday rejected the statement of US diplomat that China would be sole beneficiary of China-Pakistan Economic Corridor (CPEC), which would push Pakistan into debt trap.

Addressing at press conference at Karachi Press Club, Asad Umar brushed aside the perception, arising from the statement of senior US diplomat Alice Wells that China alone is the beneficiary of CPEC and declared that Pakistan is also an important beneficiary of this umbrella project in terms of energy and infrastructure.

"The assertion of US Acting Assistant Secretary Alice Wells regarding CPEC-related loans is not based on facts," the minister categorically stated.

He said the CPEC-related debt out of 18 billion dollars from China is 4.9 billion dollars and added that public debt taken from China has a maturity of 20 years with average interest rate of 2.34 percent.

Umar said that foreign debt of the country has reached a level that was impeding the growth of economy. He said the loans were taken in the past as imports exceeded exports of the country and trade deficit was increasing. He said total public debt of the country stands at 74 billion dollars.

The federal minister also stated that a three-fourth of the debt is from countries or multilateral institutions other than China. He said Chinese institutions funded Pakistan at a difficult economic time due to deep friendship bonds between the two countries.

The minister said that CPEC is integral to Pakistan's long-term economic development, so much so that successive governments have taken the ownership of this bilateral project. "We have also taken it forward with special focus on industrialisation, agricultural growth and social security," the minister added.

Umar said the first phase of CPEC focused on road infrastructure and energy-related projects.

He said that besides being a huge investment portfolio, CPEC is bringing in commercial debt in Pakistan, which is only 1/4th of overall public debt. But this commercial lending from China will be decreasing within three to four years time once our own economy stabilises.

Pakistan is going to get technology transfer from China under the CPEC. There is even debate within USA that China will be the future giant in global technology, he added.

The minister said that Pakistan welcomes USA and Europe to invest in CPEC and build up a multilateral partnership. "China is our all weather friend but we welcome all to be a part of CPEC," he said.

The minister also exhorted on peace and security as the essentials for the culmination of CPEC ongoing energy and infrastructure projects.

Umar hoped that economic growth will improve with the loans pay-offs.