Pakistan Drowning in Debt Swamp, Receives $1.5 Billion Emergency Aid from China

Increase in Debt During Infrastructure Construction
Difficulties Worsened by Political Turmoil and COVID-19

[Asia Economy Reporter Naju-seok] Local Pakistani media reported that China has provided an emergency aid of $1.5 billion (approximately 1.64 trillion KRW) to Pakistan, which is suffering from an economic crisis. The Pakistani government, burdened with debt from the China-Pakistan Economic Corridor (CPEC) infrastructure projects, is said to have barely managed to put out the urgent fire with China's support.

On the 13th, the Pakistani daily Express Tribune reported, citing a government official, that China recently provided emergency relief funds to Pakistan. This fund is expected to be used to repay the $2 billion loan Pakistan borrowed from Saudi Arabia. Half of the repayment for the $2 billion is due on the 14th, and the rest must be paid by next month.

The Pakistani government is raising funds by obtaining loans not only from the International Monetary Fund (IMF) bailout but also from China, Saudi Arabia, and the United Arab Emirates (UAE). In particular, since Prime Minister Imran Khan took office in August 2018, Pakistan has received $6.7 billion in funding from China until last year.

Pakistani citizens participating in opposition-led anti-government protests [Image source=EPA Yonhap News]

In addition to infrastructure projects, Pakistan is facing increasing turmoil due to the COVID-19 pandemic and political instability. The opposition parties in Pakistan are holding daily anti-government protests and campaigning for the resignation of the administration.

More than ten opposition parties, including the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Peoples Party (PPP), formed a coalition organization called the Pakistan Democratic Movement (PDM) last September. After holding protests in major cities nationwide, they are planning a march within the capital Islamabad next month.

This content was produced with the assistance of AI translation services.