LAHORE: Pakistan is mulling to consider reviewing or renegotiate agreements under the China-Pakistan Economic Corridor (CPEC) as pressure ratchets up over the country’s economic vulnerabilities.
A report in the Financial Times on Sunday said Pakistani advisers and ministers and the new installed PTI government at the centre was going to review BRI investments and renegotiate a trade agreement reached more than 10 years ago, which is advantageous to the Chinese.
According to the adviser to the Prime Minister for Commerce, Textile and Investment Abdul Razzaq Dawood, the previous PML-N government did a poor job of negotiating with China on CPEC and didn’t do their homework properly.
He added, by not negotiating properly, the previous government gave away a lot to China. Mr Dawood said the previous government provided tax breaks to Chinese entities, many breaks which gave them an unfair edge in Pakistan.
Moreover, Mr Dawood said, “this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged.”
Earlier, the Chinese foreign minister Wang Yi who was visiting Islamabad last week hinted at Beijing being open to renegotiating its trade deal with Pakistan.
Mr Yi said, “CPEC has not inflicted a debt burden on Pakistan. When these projects get completed and enter into operation, they will unleash huge economic benefits.”
A nine-member committee to review CPEC projects has been established by Prime Minister Imran Khan and is set to meet for the first time this week.
During the meeting, Dawood said, “will think through CPEC—all of the benefits and the liabilities” and is also a member of the committee.
Also, Mr Dawood believes “I think we should put everything on hold for a year, so we can get our act together,” he added. “Perhaps we can stretch CPEC out over another five years or so.”
As per other advisers and officials in the PTI government agreed extending the terms of CPEC loans and spreading projects over a longer period of time was the favoured option instead of entirely cancelling it.
While speaking to Financial Times, Finance Minister Asad Umar said a plan was being reviewed which would permit Islamabad to avoid an IMF bailout, which according to various individuals near to the government say would see new loans being provided by China and maybe by Saudi Arabia.
However, both Mr Dawood and Mr Umar stated Pakistan would be cautious not to displease China as it mulls to closely review the CPEC agreement signed over the last five years.
Mr Umar said, “We don’t intend to handle this process like Mahathir.”