China Pakistan Economic Corridor (CPEC), with an investment envelope of $46 billion, has attracted the attention of development, political and security circles of the country. As foreign direct investment has faltered and foreign debt is bloating, an investment injection of this proportion is a heaven-sent opportunity.
The enormous scale of the CPEC has overwhelmed the policy makers to an extent that they are not ready to accept any sort of criticism, and dissent is equated with treachery. With the CPEC being projected as a monument of patriotism, the government is not willing to answer many questions.
No one knows how much of this cache of money is grant, credit and direct investment. In case of credit, what is the mark-up tag and what are the terms of investment.
Local employment, environmental hazards, use of obsolete coal power technology and resettlement of people to be displaced, entailing socio-political implications are some of the critical issues being glossed over. Its political dimensions could be even more devastating.
Pentagon’s recent annual report on China’s security and military development has specifically mentioned Pakistan as a likely naval logistics hub of China. In other words, the report alludes to Gwadar Port being used as a naval hub for China in the region. Pakistan has paid a heavy price for being a surrogate ammunition depot for international powers. Although the report does not level explicit charges, if any such option is being contemplated, the CPEC could become an unbearably exorbitant deal for the country.
No one is mulling over the consequences that may potentially stem from this scheme. Policy makers are more interested in lofty proclamations. Federal government is basking in the economic gains from the project and has no time to consider the fallout of any judgmental error or mishandling of the scheme.
The CPEC is not confined merely to development projects. It has far reaching geo-strategic and political implications. While Pakistan would certainly benefit, one should not underestimate that China’s gains will be manifold and perhaps it needs this corridor more than Pakistan does.
Provincial governments have primary responsibility to safeguard the interests of their respective provinces. However, the provincial governments have hardly any role in the course of selection, designing and execution of the CPEC projects. Although Planning Commission is constitutionally subservient to the Council of Common Interests (CCI), the CPEC affairs are kept out of the CCI’s ambit. The CCI has been virtually rendered a non-entity in complete contravention of the constitutional stipulations.
Only recently, the Senate of Pakistan had to adopt a resolution demanding restoration of sanctity of the CCI. Skirting the role of constitutional forums and taking decisions through freshly manufactured committees is obfuscating matters and breeding skepticism among provinces. The CPEC has emerged as a fresh bone of contention.
The federal government’s inexplicable haste for completion of the CPEC schemes without allaying the concerns of the provinces is stoking apprehensions among the federating units. Provinces are jostling to grab their share in the scheme which is being professed as a harbinger of prosperity.
Khyber Pakhtunkhwa and Balochistan have already locked horns with the federal government, accusing it of reducing the CPEC into a Punjab development package. Both provinces have compelled the federal government to prefer the western route over the eastern option. The former traverses through these two provinces potentially ushering into a new era of economic development in the chronically marginalised areas.
Ironically, the leadership of Sindh is muted on this highly important strategic development. Sindh, sitting over a mammoth stash of coal flanked by a shoreline of approximately 350 kilometres, has greater stakes in the CPEC. The provincial government has not demonstrated any seriousness to secure its due share and address the concerns of the people of Sindh.
Allocation for the CPEC projects under the current year’s public sector development programme of the federal government favours Punjab. Out of Rs149.5 billion earmarked for the CPEC projects, more than half i.e. Rs80.7 billion have been earmarked for projects in Punjab with KP trailing behind with Rs39.8 billion. Balochistan was allocated Rs18.1 billion whereas Sindh got a measly Rs6.5 billion.
The share of Sindh in the CPEC revolves mostly around energy sector projects, mainly the development of Thar coal for power generation and a string of wind power projects. Although these projects will be located in Sindh, the power will be transmitted to the national grid. Sindh will not be receiving any exclusive benefit accruing from these projects. Under the constitutional provisions, coal is purely a provincial subject whereas electricity falls under the remits of the tooth-less CCI. The provincial government should negotiate its due share for Sindh such as preferred share and concessional tariff on the power to be generated from Thar coal power.
KP has adroitly fought its case for royalty on hydropower; Sindh could also use the precedent for similar benefit for the province. Similarly, Sindh can also negotiate for including Keti Bunder project in the CPEC. The project was shelved by the then PML-N government in a fit of vengeance against the PPP government in the 1990s. Attempts were made to resuscitate the project but the federal bureaucracy found ways to keep it frozen for nearly two decades.
Pakistan, a country of more than 200 million people, has only two major ports and the third one is likely to become operational through the CPEC. Economic potential of the country justifies having more such ports. India has 12 major and 185 small ports and Thailand also has 20 ports. Even Bangladesh and Sri Lanka have four ports each.
Pakistan requires at least 7 per cent GDP growth to bridge the need-gap of an increasingly young population. New ports can give new impetus to the economy and Keti Bunder would be a very pertinent consideration. Keti Bunder possesses all attributes of a modern port. It can be mainstreamed through national railway network at Jhimpir in Thatta district, which is hardly 140 kms away. Karachi, the largest economic hub of the country is only at a distance of 170 kms and the national highway is less than 100 kms away.
Two major ports of Pakistan — Karachi Port and the Port Qasim — are operating at their maximum capacity and handling 90 per cent of the national cargo. Keti Bunder will open new vistas of marine trade. According to some technical assessments, the Keti Bunder Port has the potential to serve much bigger vessels. Keti Bunder Port can easily be linked with the proposed Lahore-Karachi Motorway (LKM) at Nooriabad which is only 170 kms from the port site. Alternatively a new highway along the eastern border of Sindh can be constructed to connect Keti Bunder with Sukkur and onwards to upcountry. The new road would also act as an alternative to the existing national highway and the new motorway in case of riverine floods or any other disturbance. It will also help develop a new development corridor in Sindh along its eastern border.
Sindh has to struggle on two fronts. While the CPEC may bring new economic opportunities for the province, it can also unfold critical demographic complexities. The CPEC has the potential to change economic complexion and alter socio-political texture of Sindh.
Absence of necessary legislation and policy framework to secure economic and political rights of native communities can stoke a new wave of conflict in the province. The Sindh government ought to take a critical stock of opportunities and challenges for Sindh in the CPEC.