Written By: Lt Gen Talat Masood (R)
China and Pakistan have been cooperating closely at the strategic and political level since the middle of 1960s. China has also been a major supplier of military weapons and hardware to Pakistan and the cooperation in the defence field has been growing as U.S. distances itself from Pakistan and gets closer to India. It is in the economic field that the two countries are embarking on a major journey. And CPEC is a clear manifestation of this giant stride in economic collaboration.
The China-Pakistan Economic Corridor (CPEC) has been one of the most discussed and written topics in Pakistan. It has been subject of great interest and also apprehension by friends and foes of Pakistan. Few enterprises have been viewed so dramatically different as CPEC both within country and abroad. Described as a “game changer” – the most wonderful gift that China could give to Pakistan. The diehard opponents have described it as another version of East India Company. These versions aside, it is important to look at this extremely important project more objectively and assess its value for Pakistan and China.
China and Pakistan have been cooperating closely at the strategic and political level since the middle of 1960s. China has also been a major supplier of military weapons and hardware to Pakistan and the cooperation in the defence field has been growing as U.S. distances itself from Pakistan and gets closer to India. It is in the economic field that the two countries are embarking on a major journey. And CPEC is a clear manifestation of this giant stride in econimic collaboration. For Pakistan it would be a project that will bring the highest foreign investment in form of loans and grants.
The CPEC essentially aims at building Pakistan’s energy capacity and constructing national highway linking China’s Southern Xinjiang via Kashgar with Pakistan’s Gwadar seaport. Its other essential feature is the modernization and upgradation of the port and the channel.
Initially the CPEC constituted fifty-one projects having a total value of $46 billion that has since been upscaled to $56 billion and the figure keeps going up. Both countries are of the view that successful completion of these projects will strengthen the economy and contribute towards Pakistan’s internal stability. Balochistan that has remained a highly neglected and underdeveloped province should be the main beneficiary of CPEC. In addition, it should re-energize Pakistan’s economy as projects materialize. And China expects that CPEC should boost the economy and well being of Xinjiang province with an overall positive impact on its Western region.
Despite India’s attitude and U.S.’ reservations, China and Pakistan have repeatedly emphasized that CPEC is not directed against any country and is essentially meant to improve the economy of two countries with its associated positive fallout on the political stability of the region.
Initially, Pakistan allowed China to define the parameters and contents of CPEC. It was understandable as its main component is the development of Gwadar Port and the route that links China’s West with the Indian Ocean reducing its proximity to the sea.
Pakistan needs to finalize its priorities in the implementation of the project that have remained largely unattended. It goes to the credit of the Chinese that two third of the projects relate to energy as it is a critical impediment in Pakistan’s industrial, agricultural and overall development. There has been criticism of the government that the terms of the Chinese loans have been high and will create problems of repayment. The government, however, maintains that the loans extended to them are on concessional terms and are highly favorable. As regards the loans to the private sector these have been governed by international market rates, which is the normal practice.
Although not that widely known, Pakistan has imposed on China some politically expedient projects such as the Orange Line. The under construction rapid transit line built as part of Lahore Metro, is considered as an extension of CPEC. However, the Punjab Government claims it is being financed separately.
Pakistan is expected to earn five billion dollars in transit fee annually from CPEC and this would progressively increase as the facilities and infrastructure improve.
What has not been a subject of serious discussion is that nearly 70% of the energy projects contracted with China are coal fired in the private sector. Pakistan’s energy capacity based on coal is being increased from 119 Megawatts to 10,000 Megawatts. Another important factor is the condition of the plants that are being supplied to Pakistan. Whether this will multiply Pakistan’s environmental problems and how is it being addressed are genuine concerns. Coal would be transported in open wagons polluting the environment.
Chinese claim that soon they would be converting their coal plants on the principle of “super critical technology” which is presumed to be a clean coal extraction technology. But this will be in the future, provided China is able to master the technology and integrate it in its production plants.
China as of now is switching over to cleaner technologies – solar, wind and hydropower projects although coal still remains the major source of energy.
We also need to seriously plan on the Human Resource Development. Is there a strategy to have Pakistanis associated with Chinese engineers and managers so that they benefit from this invaluable experience as CPEC projects pass through various phases of implementation? The Pak-China working groups should be professionally manned and truly representative so that they could take right decisions and monitor the program effectively.
China and many countries have introduced the concept of industrial parks. Pakistan should take a cue and set up a few along the CPEC route to build interest and understanding of modern technologies, products and processes.
To foster better understanding and greater confidence in the success of CPEC, we have to take the people into confidence. The CPEC website is too general and vague. It has to be more professional and reflect the precise implications of each major project. This will prevent the enemies of Pakistan and China from spreading false rumors about it.
U.S. and more so India have been opposed to CPEC and trying to create several hurdles in its implementation. It is an open secret that Indians are supporting dissident elements within Balochistan and in other provinces of Pakistan to subvert the project and create misgiving about it. Opposition by India is a clear manifestation of its designs. It cannot see Pakistan and China benefit from the project economically, also enhance their strategic profile and get closer politically. India’s frustrations also emanate from the geographic reality that it does not have the advantages that Pakistan enjoys being placed so centrally at crossroads of Central Asia, South Asia and proximity to the Middle East. By contrast, India’s access by land remains restricted to Burma and Bangladesh. Despite India’s attitude and U.S.’ reservations, China and Pakistan have repeatedly emphasized that CPEC is not directed against any country and is essentially meant to improve the economy of two countries with its associated positive fallout on the political stability of the region.
The writer is a retired Lieutenant General from Pakistan Army and an eminent scholar on national security and political issues.