New Delhi, Sep 22 (NationPress) The China-Pakistan Economic Corridor (CPEC), which was expected to be a transformative economic project for Islamabad, has instead become a burdensome endeavor, entrapping the nation in a staggering $9.5 billion debt. Initially hailed for its potential to invigorate Pakistan's economy, the initiative has faced significant setbacks and has become embroiled in numerous controversies.

As it stands, CPEC presents very few tangible results. The delays in vital energy and infrastructure projects, coupled with cost overruns and allegations of dubious contracts, have severely undermined the project's feasibility, as highlighted in an article from 'The Diplomat' news magazine.

Economist Ali Hasanain, an Associate Professor at the Lahore University of Management Sciences, argues that CPEC's fundamental flaw was its reliance on foreign currency for many projects. This reliance conflicted with Pakistan's domestic exchange rate and industrial policies, subsequently constraining the fiscal space available to Islamabad.

At present, Pakistan owes over $7.5 billion for the establishment of power plants and an additional $2 billion to Chinese energy producers due to circular debt, as per the article.

The delays associated with CPEC 2.0 have hindered Pakistan's ability to create the necessary industrial framework to shift towards an export-driven economy and effectively address its debt. As a result, Pakistan has found itself in a cycle of borrowing to settle previous loans, exacerbating its debt crisis.

The article also points out that political strife in Pakistan has significantly impeded CPEC’s progress. In 2015, the Pakistan Muslim League Nawaz (PML-N) was in power, positioning itself as the primary proponent of CPEC. However, the opposition, led by Pakistan Tehreek-e-Insaf (PTI), accused the PML-N of corruption and inflating project costs.

Fast forward to 2018, the PTI assumed control and sought to mitigate Pakistan's financial vulnerabilities by requesting a review of all contracts with the Chinese government, concerned that previous deals were either excessively costly or biased in favor of China. Unfortunately, Beijing agreed to reassess only those projects that were yet to commence.

In 2019, the PTI government sought a financial bailout from the International Monetary Fund (IMF) to address the Balance of Payment crisis. This required Pakistan to disclose CPEC details to the IMF, which necessitated compliance with conditions such as fiscal consolidation, inadvertently slowing down CPEC and leading to discontent from the Chinese side, according to the article.

Ethnic and provincial tensions have also played a role in stalling CPEC's progress, resulting in security challenges. The Balochistan Liberation Army (BLA) and Tehreek-e-Taliban Pakistan (TTP) have mounted armed assaults against CPEC projects, with 14 attacks recorded between 2021 and late 2024, resulting in the deaths of 20 Chinese nationals and injuries to 34.

Most of these assaults have been claimed by the BLA, while the TTP has also targeted Chinese interests in Khyber Pakhtunkhwa. Following the U.S. withdrawal from Afghanistan, the TTP has notably escalated its attacks in Pakistan, as noted in the article.