DNA Edit: Pak’s Chinese Folly - Imran Khan drags his country down the debt hole

Pakistani Prime Minister Imran Khan’s desperation to build closer ties with China is understandable but facilitating the construction of the China-Pakistan Economic Corridor (CPEC) comes at a grave cost for India’s western neighbour.

Like with other Asian countries, Beijing is also pursuing debt-trap diplomacy with Islamabad, dragging the latter into the quicksand of reckless borrowing. Pakistan’s US dollar reserves have dropped to $8 billion, only enough to pay for 2 months worth of imports.

In the fiscal year that ended in June 2018, the value of the country’s exports was $23.22 billion while imports exceeded $60 billion. China, on the other hand, has slowly but steadily ensnared Pakistan the way it had enticed Sri Lanka, Malaysia and the Maldives, lulling them into a false sense of security but being generous with investments.

Beijing has pledged about $60 billion in infrastructure funds for the development of the CPEC but Khan is more focussed on social development — building human capital — that hasn’t found much favour with its ally. Pakistan has long been in the vice-like grip of China, a relationship of unequals, which Khan now calls “iron friendship”.

China’s reported $2 billion loan just days after the election of Khan was more than just a goodwill gesture. It was in tune with the Chinese policy of blocking all the exits for Pakistan and increasing Pakistan’s Chinese dependence.

Consider this: Khan will have to divulge Pakistan’s indebtedness to China if he wants an IMF bail-out. He should have looked no further than Sri Lanka, which paid a heavy price for warming up to Chinese friendly overtures. Under heavy pressure and after months of negotiations with the Chinese, the Sri Lankan government handed over the Hambantota port and 15,000 acres of land around it for 99 years.

What will Pakistan have to concede when its back is against the great wall of China?