By Our Special Correspondent
Islamabad: In a move which has sent shocking waves in Islamabad’s power corridors, the Biden administration has advised Pakistan to get debt relievf from Pakistan.
Secretary of State Mr. Blinken urged Pakistan to get relief from China after Islamabad made an appeal to the world for debt relief and restructuring following catastraphic floods which has so for caused damage to South Asian nation’s economy worth $30 Biillion USD.
US Secretary of State Antony Blinken urged Pakistan to discuss debt relief and restructuring with China, its single-largest creditor after the flood-ravaged South Asian nation made a similar appeal to other countries.
Cash starved pakistan has faced yet another flood which has submerged one third part of country and killed 1600 people including women, kids, and infants. The catastrophic levels of climate change-fueled flooding was unprecidented this year which has so far and caused damage estimated at more than $30 billion
“I also urged our colleagues to engage China on some of the important issues of debt relief and restructure so that Pakistan can more quickly recover from the floods,” a US State Department read out quoted Blinken as telling Pakistan’s Foreign Minister Bilawal Bhutto Zardari in Washington.
The two officials also discussed US flood relief, counter-terrorism cooperation and Islamabad’s relations with India. According to Bloomberg, Pakistan owes $30 billion to China, or about a third of its total external debt. Beijing has made nearly $26 billion in short and medium-term loans to Pakistan and Sri Lanka over the past five years as its overseas lending shifts from funding infrastructure toward providing emergency relief, according to AidData, a research lab at William and Mary, a university in the US.
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Pakistan plans to speak with China after talking with the members of the so-called Paris Club, an informal group of wealthy nations that bailed out governments from Argentina to Zambia, Prime Minister Shehbaz Sharif told Bloomberg in an interview last week.
Pakistan is a flagship for China’s Belt and Road Initiative with projects worth more than $25 billion completed that ended the nation’s power generation crisis and helped it mine its coal. The IMF also cautioned Pakistan that investments in the second phase of the China-Pakistan Economic Corridor could raise growth prospects but the project loans could “pose a risk to debt sustainability,” it said in a report released this month
The impact of the historic flooding became more evident by the end of August, about the same time that Pakistan secured a $1.1 billion loan from the International Monetary Fund to help avert a default. Pakistan has spoken with the IMF and World Bank about immediate debt relief as well.
