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A hazy corridor

Instead of executing in haste and labelling all concerned voices as non-patriotic, CPEC should be made open to debate — starting from need analysis and ending at political, social and economic implications

A hazy corridor

The Silk Route is a historical trade track connecting the Chinese mainland with Asia, Middle East and Africa. It turned into a modern road in 1974. There have been talks of some grand projects, with hopes for regional integration resulting in regional prosperity.

The idea transformed into a Memorandum of Understanding (MoU) in 2013, formal agreements thereunder finalised in 2015, and the first trade activity took place on November 13, 2016. Reportedly, Chinese will build a 3218-km road from Kashgar to Gwadar, and the corridor will have industrial zones, energy units, rail tracks and many other allied investments which may result in our economic metamorphosis from a third world country into a developed economy. All this will cost about $57 billion Chinese investment, hence tabbed as “fate changer” by the government.

CPEC is first of the six corridors that China has embarked on under One Belt One Road (OBOR) initiative. The second corridor will pass through Central Asia to Turkey, the third through Eurasia, the fourth Mongolia and Russia, the fifth East Asia and the sixth corridor through India.

Isn’t it a bit ambitious undertaking?

Well, even if it is, we will stick to the first corridor since firstly our fate depends on CPEC, and secondly OBOR is a big enterprise — China will complete CPEC before starting others.

It all sounds like too much economics and commerce, but only if real life economics could be bifurcated into economy, politics and sociology like academics. China will have an alternate cheaper route of less than 5000 kilometres as compared to Strait of Malacca; it will develop Western China; improve its exports through the goods exported to Middle East as well as industries supplying material to all the projects under CPEC. Pakistan will get trade tax, industrial zones, add 10,000 MW to national grid, thousands of job and development of all sorts.

China no doubt has been a friend in hard times and an ally to balance our regional and international equations with others, but this does not mean to outsource everything without keeping in view the peoples’ interests.

If it is a “fate changer”, we better take a break and assess if the change in fate is for good or worse, instead of embarking on its hasty implementation and keeping the terms secret. It is an imperialist extension of China or regional integration (to use a euphemism if the word “imperialism” offend your sensitivities and is exclusive for the West only) with ‘they’ as masters and ‘we’ as subjects. The $57 billion is loan with an interest on it.

Back then, it wasn’t Great Britain one was dealing with but the East India Company. Now, it’s Chinese banks and firms.

The project has begun, and the first transit has taken place, yet the governor of State Bank requests the government to inform them about the financial modalities.

So, who will return this loan? It’s we and our future generations.

Our track record in making the best of foreign loan is dubious. And, the government has added further to the foreign debt, which has crossed $70 billion. The major reason for fiscal deficit is debt servicing, yet we embarked on another fate-changer of $57 billion.

To top it all, the terms and conditions are shrouded in secrecy. Even the most informed about CPEC are not clear about the exact conditions for repayments and project execution mechanisms.

Another question is the militarised nature of CPEC. A single institution is posing to be the custodian of CPEC. A special division of army under the command of a major general has been raised besides adding several thousands to other LEAs under the rubric of protecting Pak-China investments. Even financial implications of this new security structure are not clear. Some say the CPEC loans will take care of it, and the running expenditure of this force will be passed on to us through our electricity bills.

To begin the debate, the first question may be about the need for the project. China wants a corridor and that can be fulfilled by just making the route from Kashgar to Gwadar. Why have so many other projects become part of this plan? We can fulfill our energy needs on our own. We require 4000 MW and the incumbent government had earlier promised to meet this need, much before rooting for 10,000 MW of costly electricity under CPEC projects. Besides, the energy projects will be run by private Chinese firms and the government will be contractually obliged to buy from them. We should be allowed a free market competition and choose firms on merit instead of being contractually obliged to buy from Chinese private firms, transact through Chinese Banks and lend contracts to Chinese firms on single bidding. Same goes for other projects comprising CPEC.

In this case, even the government monopoly is not a healthy omen for economy, let alone crowding out to private sector by another private sector entity. We saw a glimpse of this in the telecom sector.

The elitist nature of CPEC too is a cause of worry. The federal government is jealously protecting this fate-changer project without giving proper voice to the provinces. The political and economic elite will get their fair share by aligning themselves with the monopolist Chinese firms. These firms and our elite will take benefits from our pockets, since the aid is a loan. However, the middle class will be happy with job creation, ignoring the fact that they will be fleeced even before jobs are created.

The work ethic and remuneration of Chinese firms are also well known to us. Will the labour laws be applied in their operations?

Pakistan is already isolated internationally. CPEC will also impact our foreign relations. Rest of the region will want a fair share which neither us nor our sponsors will like to extend. India-Iran and India-Afghanistan relations in context of CPEC have surfaced of late. And then that vicious cycle of “foreign enemies of CPEC helping the internal enemies of CPEC” will start, which may lead to another round of political oppression, and God forbids, some Raah-e-Gwadar or Zarb-e-China Operation.

The provincial issues too need to be addressed. The eastern route has been propped up for vested and electoral interests thus causing technical glitches with missing links and lengthy routes besides alienation of smaller provinces. The western link is the natural route and also beneficial for the projected trickle-down effect upon the marginalised Pashtun and Baloch communities.

The provincial governments are gleeful at grant of a few projects of roads in their recent visit, though they won’t bother to get into the details and implications of the whole enterprise. Why modern train for Lahore through Chinese loan. Can’t we wait for our domestic resources? Similarly, why a train from Peshawar to Mardan on Chinese loans? Are these questions simple enough or perhaps we the people are simpletons and incapable to comprehend the grand vision of our government.

If the project materialises, it will also accentuate the class divide across the country — right from Kashgar to Gwadar. The rich will get richer, the powerful will grab more power and the marginalised will lose more space in the name of fate-changing development.

China no doubt has been a friend in hard times and an ally to balance our regional and international equations with others, but this does not mean to outsource everything without keeping in view the peoples’ interests. Besides, it’s a benign beginning which may unfold more fateful events and agreements once CPEC is completed. China did not interfere much in our internal affairs before, but would be obliged to do so in the post-CPEC scenario. China has a different political philosophy and system, unlike our previous masters. That peculiar system will be reflected in their dealings with us in the post-CPEC scenario which must be reckoned with accordingly.

Instead of executing in haste and labelling all concerned voices as non-patriotic, CPEC should be made open to debate — starting from need analysis and ending at political, social and economic implications. We don’t need the whole package of $57 billion, unless all the components are direly needed. As for China, we do honour our friendship and hope that the Chinese government will opt for transparency and respect for our laws and sovereignty.

Fahad Ikram Qazi

998E72BC-3517-4EA2-ACCC-A21F396CAB0E
PMS Officer at Govt of KP. Tweets @fahadikramqazi1

4 comments

  • The 57 billion dollars are not going to be a gift for Pakistan from China. Most of the amount is going to be spent on infrastructure including the China Pakistan Economic corridor and the Gwadar Port. Second, the Chinese will oversee and monitor the financial resources themselves. Third, the amount that will be spent on energy projects will be provided as a loan to Pakistan.The federal govt should cooperate with kpk and Balochistan coz these provinces are more affected due to terrorism and nationalist governments.

  • excellent insight with solid arguments that is what is needed ,and not hasty decisions which God forbid may ultimately turn into liabilities.
    Do read another remarkable cost-benefit analysis report by Dr qaisar ,a must read for all who make sweeping statements without solid analytical tools at hand.
    1.western route is 700 KM shorter than eastern route
    2.eastern route more costly in terms of a.opportunity cost of land acquisition
    b.dislocation costs/population displacement
    c.Total area under cultivation
    * average population density= west:98,east:264
    *Total area under cultivation(000 ha) = west:2933,east:10322
    *Production of 4 major crops wheat,sugar-cane,rice,cotton (000 tonnes)=west:7430,east:30928

    3.western route will openup economic opportunities for a vast swathe of abjectly backward/underdeveloped region.

    4.The area covered in western route is relatively unproductive and population density is low.The cost of land acquisition and population dislocation compensation is lower.

  • CPEC “Herald towards prosperity”
    1.increase in GDP at 1.5 percent in next 3 years.
    2.700,000 new jobs over the next 15 years.
    3.It is estimated that if all the planned projects are implemented, the value of those projects would exceed all
    foreign direct investment in Pakistan since 1970.
    4.After the completion of China Pakistan Economic
    Corridor; economic, commercial as well as geostrategic
    environment will improve in Pakistan. It will help Pakistan
    in dealing with the problems of poverty, unemployment and
    inequities of undeveloped provinces.
    5.overcome energy crisis
    6.infrastructure development
    7.economic development

  • An eye opener article about the details of CPEC. I have seen many articles on CPEC but of the points here are totally new to me. The authur study on the topic is amaizing. I think our think tanks need to do more work on CPEC before we become slaves of a new master.

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