What Happened: Cuts to Pakistan's state spending in the coming fiscal year will reduce government contributions to several infrastructure projects being constructed under the China-Pakistan Economic Corridor, the Nikkei Asian Review reported June 17. Key projects to receive less funding include a highway linking Lahore and Karachi; an airport at Gwadar and a railway connecting Peshawar with Karachi.
Why it Matters: Prime Minister Imran Khan’s fiscal spending on development projects is limited. This means that the longer it takes to complete projects under the CPEC, a flagship program of China's Belt and Road Initiative, the longer it will take for Pakistan’s economy to reap the benefits.
Background: Pakistan's government has implemented a budget for the fiscal year starting in July that features spending cuts in a number of areas as it moves to erase its fiscal and current account deficits with the help of an International Monetary Fund loan.
In the Arabian Sea, Competing Ports in Iran and Pakistan Fuel Ambition and Mistrust (June 10, 2019)
Pakistan: The Political Cost of Islamabad's New IMF Loan (May 13, 2019)
Pakistan Trudges Along a Familiar Economic Path (Sept. 21, 2018)