Pakistan Crisis China: Debt relief to Sri Lanka
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Michael Kugelman, director of the South Asia Institute at the Wilson Center in the US and an expert on Pakistan affairs, tweeted, “China has given Sri Lanka a 2-year moratorium on debt repayment.” China has not yet offered debt relief to Pakistan. That too when Pakistan is a close ally of China and is dangerously on the verge of defaulting. America had also requested Pakistan to seek debt relief from China.
China accounts for 30 percent of Pakistan’s total debt.
Kugelman questioned, ‘What could be the reason for China’s decision not to give debt relief to Pakistan.’ He said that one reason could be that China accounts for 52 percent of Sri Lanka’s total debt. At the same time, China has given only 30 percent of Pakistan’s total debt. Kugelman said that one of the reasons could also be that China wants to hit India, which recently gave financial assurance to the IMF regarding the Sri Lankan loan. At the same time, Pakistan has claimed that China is giving a new loan of $ 9 billion to Pakistan. Although it is not yet clear whether Pakistan has got this loan or not.
An expert on Pakistani affairs said, ‘This cooling in the relations between China and Pakistan in recent months (delay in China Pakistan Economic Corridor project, threat of terrorist attacks) is the reason for this. There could possibly be a factor. He also said that even after this, China cannot be a self-powered source of economic relief for Pakistan. That too when the relationship is good. Earlier, America had clearly told the leadership of Pakistan that it should ask China to get relief in debt. China reacted strongly to this. Pakistan’s foreign exchange reserves have become empty and now only a few days of import currency is left.
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