By Yigal Chazan
The next government in Pakistan, saddled with mounting debts and a severe foreign currency shortage, is facing a dilemma over whom to turn to for critical financial assistance. Both the main options could undermine some of Prime Minister-elect Imran Khan’s social and economic goals.
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Pakistan has welcomed Chinese investment, seen as crucial to spurring development and growth. But Pakistanis, like other recipients of BRI loans, have become wary of the largely opaque terms of projects, which are believed to be putting the country’s finances under severe strain. The NGO Center for Global Development warned in March that Pakistan’s economic problems were compounded by the infrastructure developments. It said big-ticket BRI projects and the relatively high interest rates being charged by China add to Pakistan’s risk of debt distress.
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