Cash-starved Pakistan, in an attempt to mollify “all weather ally” China, has finally agreed to pay $ 11.6 million as compensation to the 36 Chinese nationals, who were killed in a terrorist attack last year. What has irked several Pakistani policymakers is the quantum of compensation.
Quoting government sources, Pakistan based the Express Tribune said that the compensation sought by the Chinese was over 500 per cent “more than what a Chinese national’s heirs would have received if killed in a similar attack in their own country.”
“After the government tried to downplay the terrorist attack as an accident caused by gas leakage, China immediately retaliated and cancelled a scheduled meeting of the Joint Cooperation Committee of the CPEC,” the Pakistan-based Express Tribune said, adding that the Chinese contractor not only stopped work on the project but also demanded a compensation of $37 million.
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Islamabad said that this was a goodwill gesture.
In July last year, more than 10 Chinese nationals were killed in a suicide attack in Dasu.
The ghastly incident took place after an explosive laden car rammed into the bus that was carrying them to the 4300 MW hydropower project work site. The incident also left 26 injured.
Following the incident, the Chinese stalled work at the project.
During the week ended January 14, Pakistan’s foreign exchange reserves fell by $551.7 million – which is 2 per cent of its total kitty.
State Bank of Pakistan (SBP) data showed that the country’s forex reserves fell from $23.9 billion to $23.35 billion owing to external debt and other payments.
This is not the first time Pakistan has had to compensate Chinese nationals
This is the second time that Pakistan has had to cough up money to compensate the Chinese. In 2004, after a Chinese national died while working on the Gomal Zam Dam Project, Islamabad paid a sum of $100,000 to his family. The incident had also left another Chinese national injured, who received $50,000 from Pakistan.
Pakistan’s political situation and issues relating to security have caused concerns for the country’s policymakers. Pakistan has been on the Financial Action Task Force’s (FATF) grey list since June 2018. After remaining subdued for the first few months of its financial year, foreign direct investments into the country witnessed an improvement, rising 20 per cent in the July-December period to $1.06 billion but the figure, when compared to other South Asian countries, is significantly lower. While FDI inflow into India slowed down by 42 per cent in the July September quarter of the current financial year, in the first half of the financial year, the figure stood at $31.1 billion.
Meanwhile, global foreign direct investment (FDI) flows showed a strong rebound in 2021, up 77% to an estimated $1.65 trillion, from $929 billion in 2020, surpassing their pre-COVID-19 level, according to UNCTAD’s Investment Trends Monitor published on 19 January.
