How China Misrepresented US Pakistan Flood Aid

Pakistan continues to be reeling from unprecedented floods, which have killed more than 1,600 people this year, displaced millions, ravaged crops, damaged nearly 2 million homes and destroyed roads and other infrastructure.

The World Bank has approved $2 billion in aid – the largest such pledge to date.

Flood-displaced Saima, 23, receives medical assistance as she takes shelter at a school in Karachi on September 22, 2022. (Akhtar Soomro/Reuters)

Amid Pakistan’s woes, US Secretary of State Antony Blinken has pushed for engagement with China on debt relief and restructuring “so that Pakistan can recover faster from the floods”.

This prompted a stern response from Chinese Foreign Ministry spokesman Wang Wenbin.

“The Chinese government has provided 400 million RMB ($55.6 million) in humanitarian aid, and Chinese civil society has also lent a hand. We will continue to do all we can to help the people of Pakistan overcome the floods and rebuild their homes as soon as possible,” he said.

“China and Pakistan have had fruitful economic and financial cooperation. The people of Pakistan know this best. Instead of issuing unwarranted criticism against China-Pakistan cooperation, the US side might as well do something real and beneficial to the Pakistani people.

Wang’s misleading deviation did not answer the question raised by Blinken about Pakistan’s debt to China. He also ignored the fact that the United States provided Pakistan with a lot of aid and assistance in the face of the natural disaster.

First, Pakistan’s estimate of flood damage – $30 billion – is equal to the amount of money the country owes China.

According to Bloomberg, this represents about a third of Pakistan’s total external debt. And some of that debt is tied to what Fortune magazine has described as “opaque” emergency loans.

China, the world’s largest bilateral lender, has provided a total of $32.8 billion in emergency loans to heavily indebted Sri Lanka, Pakistan and Argentina, Fortune reported, citing news reports. ‘AidData at the College of William & Mary in Virginia.

In large part, these loans were used to avoid defaults related to China’s Belt and Road Initiative (BRI) – Beijing’s $1 trillion trade and diplomatic program to connect with Eurasia and the United States. Africa with Chinese-built infrastructure projects, Fortune said, citing a Financial Times report calling China an emerging competitor to the Western-led International Monetary Fund.

Fortune reports:

“[R]The researchers found that the bulk of Chinese lending abroad – about 60% – now goes to low-income countries that are currently mired in over-indebtedness or at high risk. Beijing’s pivot to short-term bailout loans highlights its growing role as an emergency lender of last resort, making it an alternative to the Western-backed International Monetary Fund (IMF).

“Experts worry about what’s next, as many countries that have borrowed from China are facing an extraordinary debt crunch in an era of inflation and climate change.”

Pledged Chinese investments in the China-Pakistan Economic Corridor (CPEC) – a BRI flagship project – have been valued at $62 billion.

VOA’s sister news agency, Radio Free EuropeRadio Liberty, reported in August that “the viability of some projects has been questioned in Pakistan”.

This includes a deep-sea port that China is building in Gwadar under a 40-year lease signed in 2017. The presence of Chinese fishing vessels in Gwadar and their impact on local fishermen has sparked protests there .

Commentators have told Britain’s Financial Times newspaper that China’s bailout loans are only making the problems of indebted countries worse.

“I see them as a major obstacle to resolving the crisis,” Gabriel Sterne, a former chief economist at the IMF, told The Times. “The suspicion is that countries are seeking the loan to avoid going to the IMF, which demands painful reform.”

In May, the industrialized democracies of the Group of Seven (G7) called on China to “contribute constructively” to help “low-income countries facing debt sustainability issues”.

In the meantime, the United States is doing something beneficial.

Blinken recently announced that the United States is providing Pakistan with an additional $10 million in food security assistance, in addition to the $56 million already mobilized for flood-related humanitarian assistance.

Blinken noted that the United States was “able to send about 17 planes full of supplies, like food and materials to build shelters, tents, tarps.”

The U.S. Agency for International Development (USAID), which is providing more than $50 million of total U.S. pledged assistance so far, has deployed a disaster response team (DART) “to lead the U.S. government’s humanitarian response efforts in Pakistan. ”

USAID said “[t]he United States is the largest humanitarian donor to Pakistan.

Local workers unload relief items sent by the US government at Noor Khan Air Base in Islamabad on September 9, 2022. (Pakistani Foreign Ministry News Service/via AP)

Local workers unload relief items sent by the US government at Noor Khan Air Base in Islamabad on September 9, 2022. (Pakistani Foreign Ministry News Service/via AP)

“Since 2009, the U.S. government has committed more than $5 billion in civilian assistance to Pakistan and more than $1 billion in emergency humanitarian response,” reports the website of the U.S. Embassy and Consulates in Pakistan. .

“The United States has also donated more than 61 million vaccine doses to Pakistan, in addition to more than $78 million in direct and in-kind support to help Pakistan respond to the COVID-19 pandemic. »

In particular: “US aid to Pakistan is still in the form of grants, which does not add to Pakistan’s debt burden or balance-of-payments problems.

China routinely tries to dismiss or misrepresent US aid to developing countries.

Chinese diplomats often use crude memes to claim that Beijing is a force for good in the world and the United States is just a force for violence.

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