Et tu, Brute? Chinese banks looking to end investments in CPEC due to political instability in Pakistan
The multi-billion-dollar project has grabbed eyeballs with China looking to expand its influence in another country, and Pakistan looking for economic modernization
In what comes as a blow for Pakistan, the dream project of the country-China Pakistan Economic Corridor (CPEC) seems to be in a fix as many financial institutions and banks of China are showing reluctance in investing in the project.
The matter was discussed with the Chinese authorities when Pakistan Foreign Minister Shah Mehmood Qureshi visited the country last week.
The multi-billion-dollar project has grabbed eyeballs with China looking to expand its influence in another country, and Pakistan looking for economic modernisation.
However, the project has attracted a fair share of controversies
India has been boycotting the BRI to protest over the CPEC being laid through the Pakistan-occupied Kashmir.
Meanwhile, many Baloch political activists have alleged that the people in Balochistan are paying a heavy price for the multibillion-dollar China-Pakistan Economic Corridor (CPEC). Incidents of enforced disappearances, tortures and killings have seen a sharp rise in Balochistan since the launch of the CPEC project.
Pakistan's army has carried out operations in the areas where the project passes through as they have to provide a clean path to China. Balochistan is a resource-rich region with huge reserves of minerals and gas, but it remains poor because of exploitative policies of Islamabad. It has given birth to freedom movement in Balochistan.
Moreover, Pakistan was hit by a scam of $630 Million scam in May last year.
A committee looking into the losses in Pakistan's power sector dug out the scam.
Two Chinese power sector companies working on the CPEC project--Huaneng Shandong Ruyi energy (HSR) and Port Qasim Electric Power Company Limited were accused of corruption.
They were accused of violating standard procedure and malpractices, by showing excess set-up costs for extra profits, raking up a profit of up to 50 to 70 percent.
Moreover, there were reports of CPEC Chinese workers, most of them belonging to the military, trafficking of Pakistani women to China, and clashing with Pakistani locals.
The CPEC project is crucial considering this comes at a time when Saudi Arabia ending loan and oil supply to Pakistan.Pakistan was also made to pay back USD 1 billion to Saudi Arabia, which was part of a $6.2 billion package announced by Saudi Arabia in November 2018, which included a total of $3 billion in loans and an oil credit facility amounting to $3.2 billion.
The CPEC, worth USD 60 billion, connects Gwadar Port in Balochistan with China's Xinjiang province, is the flagship project of Chinese President Xi Jinping's ambitious Belt and Road Initiative (BRI).