By Imtiaz Gul
Attempts to project the China Pakistan Economic Corridor (CPEC) in a negative light or caste aspersions on it that it is a new way of colonising countries like Pakistan are nothing new. Neither are they surprising. The chatter about ‘Chinese debt trap through exorbitant projects’ often resonates at diplomatic and official functions. Increasing presence of Chinese nationals across Pakistan, too, is a recurring subject matter in the western media and conversations of foreign visitors and consultants during their Pakistan visit. Recent reports, particularly those in the Financial Times and the Wall Street Journal, have generated more gossip on the subject. The echo chamber containing like-minded people, largely ignorant of the nature of the Pakistan-China relationship, is to be held responsible for this. Lack of information is another issue that makes such reporting appear suspect and motivated, intended – on the face of it – to send jitters among Chinese decision-making circles. These reports have also been conflating state-to-state loans and Chinese investments in Pakistan to raise the specter of the ‘debt trap’.
Agreed that lack of transparency by the Sharif government fueled speculation and fed lopsided reporting , or led to skewed views on CPEC related financial matters, but despite all of that, the issues need to be properly contextualized.
This is happening at a time when the Senate Standing Committee on Planning, Development and Reform was recently informed that Pakistan obtained a total of $6 billion concessional loans from China for infrastructure projects at an interest rate of 2.29 percent with a seven-year grace period and a 25-year repayment period. Another loan worth $8.212 billion – on more or less similar conditions – for the rail network is still pending finalisation.
Additionally, Chinese companies made $36 billion worth of investment on 22 projects, including 15 energy projects, Hassan Daud Butt, a government focal person for CPEC, told the Senate committee.
As many as 10,000 Chinese and 65,000 Pakistanis are working on various CPEC projects, all being looked after by nearly 10,000 troops and 4,502 civilians.
With all these facts – which is not the complete truth one would assume – why blame the Chinese for the stupidity, selfishness and shortsightedness of our own politicians? Despite blowing the trumpet of CPEC as a ‘game changer’, the former government, for example, was painfully slow in responding to issues on ground i.e. water and electricity shortages in Gawadar. Even the operationalisation of the $259 million grant for the construction of Gawadar’s new airport took nearly two years.
The progress on water and electricity is still extremely slow, with only about 300,000 gallons of water being supplied against a daily demand of six million.
This situation stems from three systemic problems
- a) the tardy governance structures that impedes, instead of expediting work,
- b) little provincial and central government attention to these core issues, and,
- c) the politically connected suppliers – the tanker owners’ mafia – who pocket millions of rupees daily but provide less than half of what is promised.
Orange Train is one such venture, and in fact part of the three major projects which accrued the $6 billion loan. Then Punjab Chief Minister Shehbaz Sharif literally begged the Chinese for the Orange Train, officials privy to the project tell us. Beijing was reluctant in funding the project since it does not fall in CPEC’s vision of national and regional infrastructure connectivity and industrial zones.
Officials say the younger Sharif was so desperate that he even offered interest rates higher than those set for other projects. A former official recalls that Sharif’s ‘expression of gratitude to President Xi for granting the Orange Train was nothing but a sheer embarrassment for any self-respecting individual’.
Pakistani officials and cabinet members need to remember that CPEC came to us as a bail-out, if not as a game-changer. Not a single country or foreign groups ventured to risk even a single dollar in Pakistan, always using the security situation as the primary pretext. And here, we are speaking of a portfolio of nearly $50 billion that has generated economic activity in many parts of Pakistan.
Secondly, prioritisation of projects always rested with Pakistani officials and was not imposed by the Chinese. When President Xi introduced the notion, his officials were ready to go to any length to accommodate Pakistani concerns and wish-lists.
Lastly and most importantly, Pak-China relations simply transcend financial considerations. Little doubt though that CPEC has served as an unusual shot in the arm – a geo-economic embrace that is mutually beneficial.
We must not forget that Pakistan is the only country that the Chinese at large refer to as “Patia” which translates into: iron brother. Inseparable neighbours and ‘blood brothers’ are other expressions that often resonate in conversations with friends in China. Most Pakistanis, and more so western media and officials, rarely appreciate the depth that comes with this terminology, specific to Pakistan only.
Let us not be misled by misleading reports and speculation. Nor should we unnecessarily jitter the Chinese leadership. Recent discussions in Beijing and Shanghai made it abundantly clear that the Chinese officials understand Pakistan’s present predicament and limitations.
They are also aware of the domestic political dynamics. Perhaps they would themselves review terms of their engagement with Pakistan in a way that would be beneficial to both countries. Our leadership needs to talk to Chinese friends quietly but openly behind the scenes, instead of delivering unguarded and unmeasured public statements that will only work to the disadvantage of Pakistan.
Published in Daily Times, September 12th 2018.