KARACHI: The most repetitive word in Pakistani discourse which met with international acclamation is “CPEC” (China-Pakistan Economic Corridor) but most of the people do not know exactly what they are talking about as the agreements remain shrouded in ambiguity, according to members of the business community and lawmakers.
“The PML-N government did not share the details of the CPEC agreements they signed with China, with parliament and concerned stakeholders,” Senator Syed Shibli Faraz, member of the Senate’s standing committee on planning, development and reforms which is mandated to oversee the CPEC projects, told Arab News.
Senator Faraz, who is representing Pakistan Tehreek-e-Insaf PTI in the Senate of Pakistan, said his government will make all the CPEC agreements public through parliament. “After the formation of the government we will review the projects’ agreement and decide about those which are not in the country’s interest.
“We will honor the agreement but would request friendly countries for ‘further improvement’ to create a win-win situation,” Faraz added.
The PTI, led by cricketer-turn-politician Imran Khan, who has taken over as the Prime Minister of Pakistan, has announced in his election manifesto that he will ensure local Pakistani businesses are fully involved in the implementation of the CPEC project and policy.
Pakistan’s business community has also expressed reservations about the agreement and remains uninformed.
“We are not clear about the CPEC projects because relevant agreements were not shared with us. We cannot do anything at this stage when we lack information,” said Syed Mazhar Ali Nasir, senior vice president of the Pakistan Chamber of Commerce and Industry. “We are in an unstable and uncomfortable position. What incentives will be offered to existing industries as compared with those being offered for setting up units in Special Economic Zones are some of the ambiguities that need to be clarified.”
However, Ahsan Iqbal, the former planning and development minister who spearheaded the CPEC project, negates the impression that parliament was kept in the dark. “All relevant committees of the National Assembly and Senate were on board. These committees are represented by every political party, including the PTI. I have been answering all their queries about CPEC projects,” Iqbal told Arab News.
As Senator Faraz hinted at a thorough review of CPEC agreements and the liquefied natural gas (LNG) import agreement made with Qatar, Ahsan Iqbal warned against the move.
“If you go for a project review you have signed with any foreign country, the move will jeopardize the country’s international standing and credibility. No country will sign any agreement with you in future,” Iqbal said. “The CPEC is the most scrutinized project in the history of Pakistan because scrutiny of each project was ensured, which rules out the possibility of any secrecy.”
Ahsan Iqbal is confident that “nothing will come out if projects are reviewed because everything is crystal-clear ... If they make the CPEC unnecessarily controversial it will hurt investors’ confidence,” he said.
Energy projects were set up under the country’s energy policy, which was open for all investors including the US, the Middle East, etc, but only the Chinese made use of this opportunity, Iqbal said.
The government will not be extending loans on the energy project, while those in the infrastructure sector will be extended at a rate of 2.2 percent and payable in 20 to 25 years, which means there is no burden on the country, Iqbal noted.
However, the PTI election manifesto ensures the completion of the CPEC by encouraging a shift toward partnerships for project completion. “We will utilize expertise from China to supplement domestic manufacturing capabilities and enhance yields in agriculture. We will create more opportunities to promote local value addition through joint ventures and by offering incentives for value-added exports,” the party’s election manifesto reads.
Most commonly referred to as the game changer, the CPEC is a framework of regional connectivity.
The investment made under the CPEC umbrella is estimated at $62 billion, mainly in energy and infrastructure projects in progress throughout Pakistan.
PTI government to open CPEC, Qatar LNG agreements in parliament, says Senator Shibli Faraz
PTI government to open CPEC, Qatar LNG agreements in parliament, says Senator Shibli Faraz
- CPEC and LNG import agreements are shrouded in ambiguity, says senator
- Projects review move would jeopardize country’s international standing and credibility, warns Ahsan Iqbal
IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan
- Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
- Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains
ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.
The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.
Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.
The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.
But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.
The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.
The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.
Despite the progress, Pakistan’s structural weaknesses remain severe.
Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.
The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.
The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.
