How pakistan can pay foreign debt

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How pakistan can pay foreign debt

Pakistan's debt, servicing cost to go up

Search Toggle display of website navigation Argument: With oil prices down, the country is unable even to repair rigs or pay workers to generate income, and the government now faces the prospect of a mass uprising.

The reality is more nuanced. No one doubts Beijing cares little for niceties such as human rights, environmental protection, and anti-corruption when working abroad. Until recently, even geopolitical flag planting was relatively unimportant to Chinese technocrats.

But there was still a hard-edged focus on Chinese interests. The driving motivation of Chinese investment and lending since has been an obsession with opening up new export markets and securing access to natural resources.

China lent at exorbitant rates to Venezuela. There was an important catch to this largesse; to guarantee repayment, Beijing insisted on being repaid in oil. To repay Beijing today, Venezuela must now ship two barrels of oil for every one it originally agreed to. If Venezuela collapses and Maduro departs unceremoniously, China faces a large risk of diplomatic and financial blowback.

Opposition politicians are well aware that China propped up the ruinous Maduro rule. A new Venezuelan government could well refuse to honor the Maduro-era obligations entirely and look to Washington for support instead.

That would be both economically and politically embarrassing for China, which in the past has been a vigorous supporter of the right to default — as long as the debts were owed to the West. But a Venezuelan default could have consequences far beyond Caracas and Beijing.

As part of its Belt and Road Initiative BRIChina is planning to extend the same kind of deal it made with Venezuela to many more countries around the world. By leveraging its financial strength and expertise in infrastructure, China saw an opportunity to push its influence farther afield, winning friends and securing assets at the same time.

Many Asian countries talk quietly, and some openlyabout craving greater U. But if the choice is a risky deal with Beijing or no deal at all with the West, many have shown that they will choose the former.

Venezuela collapsed thanks to a malevolent dictatorship pushing disastrous economic policies aided by a benefactor willing to extend near bottomless credit. This same toxic mix is present throughout many of the countries receiving large amounts of Chinese lending under the BRI.

Worried about stagnating economies, autocrats around the world see an opportunity to drive growth by borrowing from China to fund white elephant projects regardless of the long-term consequences.

While China may argue that it makes investment decisions on a purely commercial basis, its history with Venezuela argues otherwise. That has been confirmed by the problems that have already cropped up in BRI-related projects.

China negotiated a swap of its debt for a year leasehold in a Sri Lankan port project along with surrounding business park development interests.

Beijing likes to cite the Marshall Plan when talking about the BRI, but its deals are far more shrewd and self-serving. The borrower countries then have to use Chinese firms, inputs, and workers to build out their railways and ports.

How pakistan can pay foreign debt

China is making the loans not out of a long-sighted vision of a better global order, as its boosters like to claim, but from a calculation of the financial incentives it needs to keep its own over-indebted firms afloat and their workers working.

If this amount actually materializes in practice, it represents a major sum, even for China, whether in absolute terms or relative to GDP.

That means that even relatively small defaults could have a serious cost, economically and politically. Sri Lanka has seen widespread protests and riots over Chinese debt.Pakistan is not just indebted to China.

Government debt, external debt, and internal crisis can create a critical situation in the country. As per Trading in the fourth quarter of , Pakistan’s current account deficit recorded was of USD million.

From to , Pakistan’s current account averaged USD million. Apr 15,  · External Debt in Pakistan jumped to USD million in the fourth quarter of from USD million in the third quarter of The country’s external debt averaged USD Million.

These are good times for the Pakistan film industry, at least in terms of the number of films that are being made. Sep 23,  · Pakistan’s recent decision to review its economic agreements with China, if implemented successfully, will pay dividends for promoting regional and global stability.

Planning Commission of Pakistan, “The Causes and Impacts of Power Sector Circular Debt of Pakistan,” project funded by U.S. Agency for International Development, February 1, President Dr Arif Alvi said that there is a huge potential of exports and employment generation in the Information Technology and Telecommunication Industry.

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