Dragon does not give any relief in debt waiver and interest rates
Dragon does not give any relief in debt waiver and interest rates: 20 debtor countries including Pakistan in trouble due to China's strict conditions
Pakistan's problems are increasing. On the one hand, he has agreed to a relief package from the International Monetary Fund (IMF) on strict terms. On the other hand, businessmen have also come out against the tax hike proposed by the government to meet these conditions.
He said that the government should not implement them, otherwise they will go on strike. By the way, the real problem of Pakistan is the debt trap of China. For the last two decades, China's assistance to other countries including Pakistan has increased. The economic condition of such countries that have taken loans from China is bad. China has given maximum loans to about 20 out of 38 countries including Pakistan sitting on the verge of bankruptcy. According to the World Bank, in 2017, China's debt to poor countries was equal to 11% of its GDP. This figure is increasing.
Covid 19 and rising interest rates have added to the difficulty. Before China became a creditor, Western countries had created a framework for settling bad debts. The creditor countries together used to fix the schedule of payment afresh on the old terms. A loan waiver was given priority. In this way, countries that took loans from western countries were saved from worse situations. But China is refusing to implement the old rules.
The G-20 countries have created a new framework in 2020 to bring it under their purview, but China is not implementing it. After the epidemic, the system like reducing the interest rate stopped. China is not even ready for a loan waiver. The major problem with its debt trap is that China works alone. China talks alone with the intention of promoting bankruptcy.
According to the World Bank, after 2008, China changed the loan terms of 71 countries. But he did so on his own terms. At the same time, the Paris Club of Western countries has restructured the debt of 68 countries. China often accepts debt repayment in kind. The borrower has to share the income of the infrastructure created by taking the loan.
Pakistan has a debt of more than Rs 22.50 lakh crore. According to the IMF, 30 percent of this debt is from China. It has borrowed about $30 billion from China. This is three times the total debt of the IMF. For years, Pakistan's friendly countries kept getting it out of trouble.
Money was available during the crisis, so Pakistani politicians are expecting a miracle at the last moment, but this time China has not given any help. Saudi Arabia has remained silent after suggesting a package. IMF alone cannot rescue Pakistan from the crisis.
According to Pakistan's Sustainable Development Policy Institute, China's debt is up to 2 percent costlier than organizations like the Council for Economic Cooperation and Development (OECD). Stringent conditions become a noose for the borrower country.
The rupee of Pakistan continues to fall in value. Despite this, Finance Minister Ishaq Dar is careless. He says that the prosperity of Pakistan is in the hands of God. Divine help often comes in the form of the IMF. After 1960, funds or western governments bailed out Pakistan 21 times.
For Latest Update from Sangri Today Like us on Facebook and Follow on Twitter. Fore Latest Video News Subscribe our channel on YOUTUBE. Also Join Our Telegram Channel