The China-Pakistan Economic Corridor (CPEC), initially promoted as a transformative economic initiative, has instead burdened Pakistan with $9.5 billion in debt. Delays, cost overruns, and opaque contracts have limited the corridor’s economic benefits, raising concerns over its long-term viability, according to The Diplomat.
Economists point out that reliance on foreign currencies for many CPEC projects clashed with Pakistan’s domestic exchange policies. Currently, Pakistan owes $7.5 billion for power plants and another $2 billion in unpaid energy bills to Chinese producers. The delay in CPEC 2.0 has prevented the creation of an industrial base necessary to drive exports and service debts.
Political infighting has further complicated matters. The PML-N-led government in 2015 faced corruption accusations, while the PTI government in 2018 sought to renegotiate contracts, slowing project execution. Pakistan also had to share CPEC details with the IMF to secure a bailout, agreeing to fiscal measures that further delayed the corridor and frustrated Chinese authorities.
Security threats have added to CPEC’s woes. Between 2021 and 2024, attacks by the Balochistan Liberation Army and Tehreek-e-Taliban Pakistan killed 20 Chinese workers and injured 34. Ethnic tensions and insurgent violence in Balochistan and Khyber Pakhtunkhwa continue to threaten project completion and investor confidence.
