CPEC: Will It Be A Game-Changer For Pakistan Or A Nightmare? – Analysis


By Jyotishman Bhagawati*

The China-Pakistan Economic Corridor project connecting Kashgar in China’s Xinjiang province to Gwadar in the Baluchistan province of Pakistan has captured a lot of international attention in recent days. Considering the disastrous state of Pakistan’s political and economic situation today, the $46 billion investment that China eventually plans to pour into Pakistan (which is more than twice the amount of FDI that Pakistan has received since 2008) has generated a lot of euphoria and optimism (Devasher, 2016).

However the CPEC is also beset with a lot of scepticism with many experts raising doubts over its viability for the Pakistan economy in the long term. Part of the fear is about the mounting debts that the Pakistan’s power distribution companies are faced with which the CPEC is likely to aggravate. Take the case of the energy crisis in Pakistan. It is not due to lack of any power generating capacity but because of productivity and distribution issues. Even so instead of sorting out those problems, the Government has announced a whopping investment of $34.4 billion of the $46 billion backed by sovereign guarantees for the power sector alone which is likely to exacerbate their debts to such an extent that it will be unsustainable in the long run (Pal, 2016).

Another important development that has raised eyebrows is regarding the possibility of some of the projects in Sindh and Baluchistan getting shelved apparently to benefit Punjab (Maini, 2016). In fact, Baluchistan and Khyber Pakhtunkhwa have accused the federal government of changing the economic corridor for their own political reasons with some even going to the extent of calling it “China-Punjab Economic Corridor” (Devasher, 2016). If these reports are true, then the share derived by Baluchistan of $7 billion and that of other provinces will come down heavily and that of Punjab will increase further, which will aggravate inter-provincial discord more (Maini, 2016).

The Pakistani business community has also expressed its concern about competing with cheap Chinese goods that will flood the market as soon as the CPEC is completed. This development comes after China and Pakistan signed a Free Trade Agreement (FTA) in 2006 which was later criticised by the Pakistan Business Council to be heavily in favour of China allegedly due to the lack of “homework and imagination” by the Ministry of Commerce team and the lack of consultations with the business community (Ahmed, 2016). The CPEC is also allegedly being promoted in such a manner.

Critics have also questioned the veil of secrecy surrounding the CPEC projects. Crucial details of the funding for the CPEC projects regarding how much of it are in the form of loans or grants and the terms of those loans/grants etc are completely opaque, creating more suspicions and concern not only within Pakistan but also in India (Pal, 2016). Moreover although the US has been encouraging China to play a stabilising role in Afghanistan, they are also at the same time sceptical about the rise of China and are expected to counter any such moves that might have an influence in the resource-rich regions of Central Asia and the Middle East in the long run such as the CPEC (www.bbc.com, 2016).

The economic corridor project has also got involved in a very ugly spat of politics with both the army and the civilian government trying to stake their claims for it. Already the civil-military relations regarding the CPEC have gone to such an extent that the Army has been calling the shots lately with the support of the Chinese for whose protection an entire division of over 15,000 strong workforce is being raised through local tax-payers’ money (Khan, 2016).

The government is also accused of putting aside national interest to serve its own political gains. For instance, one project that the government is putting a lot of importance on, brushing aside opposition from all corners — including the UN, is the Lahore Metro, apparently to swing voters towards it in Punjab which is the largest constituency in Pakistan, in spite of its significance being peripheral to the overall economic and strategic objectives of the CPEC (Boone, 2016).

Also, many argue that the Army’s close interest in what is supposed to be a purely economic project reflects its greed to corner the lion’s share of the opportunities that the project is estimated to generate (Pal, 2016). Sanaullah Balloch, a former Senator from Baluchistan, in an opinion-editorial (‘Corridor of Secrecy’, June 30, 2016) for The News has also raised concern about the attitudes of the civil-military elite in Islamabad whose policies are often on the same page in terms of their adverse effect on the smaller provinces (Baloch, 2016).

Moreover, the militancy problem continues to persist despite the high level of security arrangements for CPEC projects with over 200 security-related arrangements taking place in the Baluchistan stretch alone (Devasher, 2016). The corridor, which passes through restive regions like Xinjiang, Gilgit-Baltistan, and Baluchistan, is repeatedly targeted by Uighurs, Balochis and Pakistani Taliban militants.

Such concerns have led the Chinese to directly hold talks with the Pakistani military establishment despite the Army’s differences with the federal government, as for them, the CPEC holds tremendous geo-strategic value giving them the shortest access to the Middle-east and Africa and also providing them with an alternative to the “Malacca-Dilemma” (www.bbc.com, 2016).

To conclude, China and Pakistan’s “All Weather Friendship” only seems to be benefitting China at the moment. Islamabad’s decision of putting all its eggs in one basket also appears to be drawing Pakistan more closely to joining the Chinese bandwagon (Maini, 2016). The wide differences, deep suspicions and the incapacity of the civilian government have added to a lot of controversy to the economic corridor which is spiralling in such a manner that the Chinese embassy had to take the unprecedented step of issuing a statement urging all parties to “strengthen communication… and resolve differences properly” (Amir, 2016).

Therefore, it remains to be seen if the CPEC really holds up to its promise of being a “game-changer” or ends up as a nightmare for Pakistan.

*Jyotishman Bhagawati is a post-graduate student of International Relations at the New Delhi-based South Asian University. Comments and suggestions on this article can be sent to [email protected]

South Asia Monitor

To create a more credible and empathetic knowledge bank on the South Asian region, SPS curates the South Asia Monitor (www.southasiamonitor.org), an independent web journal and online resource dealing with strategic, political, security, cultural and economic issues about, pertaining to and of consequence to South Asia and the Indo-Pacific region. Developed for South Asia watchers across the globe or those looking for in-depth knowledge, reliable resource and documentation on this region, the site features exclusive commentaries, insightful analyses, interviews and reviews contributed by strategic experts, diplomats, journalists, analysts, researchers and students from not only this region but all over the world. It also aggregates news, views commentary content related to the region and the extended neighbourhood.

One thought on “CPEC: Will It Be A Game-Changer For Pakistan Or A Nightmare? – Analysis

  • December 21, 2016 at 11:50 am

    These days, when you read any article about CPEC, you need to first check the nationality of the author. If he is an Indian (by name), it means you can stop reading, cast the article aside and go for a walk instead. This is because the narrative would always be negative and biased.


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