I'll focus on last 5 years as an example ... it will get a bit technical but i'll try to be clear.
Instead pak govts have increasingly looked *outside* in what i'd call an attempt at "import-led" growth ... it doesn't work
The latest example starts in 2013, when PML-N comes to power and decides to outsource growth to China. I'd explain why it doesn't work
Real effective exchange rate (pak prices relative to trading partners) increased by 20+ % and total exports DID NOT INCREASE over past 5 years.
Media feeds the frenzy that its a "game changer" & a big bubble develops in the port city (currently largely sand) of Gawadar.
Notice we haven't even gotten into whether the $$ borrowing is "sustainable", the damage is being done before any repayment is due
The first thing to remember is, you are borrowing in dollars, while most revenue from the projects are in rupees (think domestic transportation use and local energy consumption)
This is a big problem for two reasons.
This, again, makes things more difficult given the dutch disease in the first place.
For example, what is the cost of capital in CPEC? A loan contract may report a "concessional" rate of 2%. But is it really 2%? Consider this ...
Guess what, the "true" cost of capital just went up to (2+20)/80=27.5%!
The govt wanted a shiny new road real bad before the next election, which they lost anyways.
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