As Pakistan’s external debt is piling up and foreign exchange reserve is hitting a ten-year low, Miftah Ismail, former Finance Minister stressed the importance of boosting exports through CPEC in easing Pakistan’s fiscal pressure.
“Under the CPEC framework, we have got power plants and roads that are very much needed in Pakistan. The only problem is that when we doubled the electricity in Pakistan, we did not double our industrial production; we did not double our exports”, he pointed out in an interview with China Economic Net (CEN).
According to Mr. Miftah Ismail, the debt issue has been there for the last twenty to thirty years. In the most recent year, floods have incurred permanent and irreversible losses to Pakistan. Loans are required to recover but will drive the country’s debt further up.
He told CEN that Pakistan is in debt of PKR 50,000 billion. For an average Pakistani, he has a debt of around PKR 250,000. Half of this debt is in foreign exchange, most from countries aside from China, a major infrastructure provider of the country.
“The infrastructure that China has worked on is very important for Pakistan and has proved to be very good for Pakistan’s economy. In the second phase of CPEC, we wish to see that Chinese companies come to Pakistan and set up their businesses here, and together, we can export goods to other countries and help mitigate the financial deficit in Pakistan”, he said.
He cited the example of Pakistan’s first all-steel radial truck/bus tire plant set up jointly by Pakistani and Chinese companies in Nooriabad, where five to ten percent of the products will be sold in Pakistan, and ninety percent will be exported.
“It is important for us to provide easy opportunities to the Chinese factories to open here, then our people will get employment and exports will increase, so we can earn some foreign exchange and return the debt”, he said.
