CPEC—challenges and prospects
Dr. Zafar Nawaz Jaspal
China and Pakistan have been struggling to complete the multibillion dollar economic corridor project in the prescribed time frame despite the COVID-19 pandemic. With the easing of lockdown restrictions, the work on the project is expected to gain pace. However, recent trends in global politics and internal socioeconomic developments have resulted in some misgivings about progress related to the China-Pakistan Economic Corridor.
From the outset, CPEC has faced internal discontent and external criticism. The two voices occasionally create an impression that the project may not be completed on time. Nevertheless, the Pakistani ruling elite has never stopped advertising the dividends of CPEC or forecasting its optimistic outcomes and timely accomplishment.
The Chinese have been equally determined to implement CPEC since it is the flagship project of China’s Belt and Road Initiative that involves more than a trillion-dollar of infrastructure projects or loans in more than 60 countries. They are also aware of internal and external pressures on the Pakistani government related to the corridor.
On May 7, CPEC Authority Chairman and Special Assistant to Prime Minister on Information Lt-Gen (r) Asim Saleem Bajwa announced that the project was progressing at a rapid pace. He also maintained that the country would not accept any external pressure to scuttle the project.
Bajwa’s reference to external pressure endorsed speculations that some global powers were not only uncomfortable with the progress on CPEC but also hatching conspiracies against it.
India’s anxiety over the project is understandable since it cannot reconcile with Pakistan’s economic progress. This is because New Delhi understands that financial stability not only entails political stability but also contributes decisively in solidifying the defensive fence of a country.
However, it is the systematic obstructionist approach of the United States, rather than India, that can disrupt the project. In the beginning, the Americans opposed CPEC indirectly, but now they are denouncing it quite publicly. The US administration is seemingly convinced that CPEC can frustrate its geo-economic and geopolitical pursuits in Asia.
The current tussle between Beijing and Washington over the origin of coronavirus is problematic for Pakistan since it is an outcome of brewing tensions between China and the United States in a fast-changing environment of global politics. The American strategic enclave has already declared China as a strategic competitor in the 21st Century, and the Trump administration considers China’s containment essential for enduring US leadership on the world stage.
Pakistan is unable to accommodate American concerns over CPEC. Islamabad desires to build on the recent improvement in its relations with Washington without denting its strategic cooperation with Beijing.
The Americans will use the international financial institutions to coerce Pakistan. Despite these tactics, however, Pakistan is not likely to act as its front line state against China.
The pessimistic views about CPEC can be intensified among the Pakistani public by the pro-American lobby in the country that has already started declaring the project as part of the Chinese “debt trap.” Many Pakistani analysts express their concern over the project’s cost, payment schedule, and mark-up on debt. They believe that various CPEC agreements, especially related to the power sector, are likely to increase Pakistan’s financial difficulties.
However, a majority of Pakistanis accept the official narrative on CPEC and agree that it is an economic game-changer for the country. This is because a bulk of $30 billion energy projects have already been completed and a few remaining ones are still under construction. Most people also believe that CPEC will lead to robust trade among the Eurasian, West Asian and South Asian nations through a network of roads, railways, and pipelines that will generate $6-8 billion in annual tax and toll revenue for Pakistan.
It is pertinent to mention here that Pakistan recently approached China to meet its debt payment challenge. During President Arif Alvi’s visit to Beijing in March, the Chinese government was requested to ease payment obligations of over $30 billion worth of 12,000-megawatt power projects. Pakistan wanted to decrease the mark-up on debt from the existing Libor+4.5 percent to Libor+2 percent and an extension in debt repayment period in the tariff from the existing 10 years to 20 years.
Instead of granting immediate relief, the Chinese government left the matter for deliberations at CPEC’s Joint Working Group. It is in the interest of both countries that the Chinese government accommodate Pakistan’s demands as soon as possible to address the negative publicity against the economic corridor.
CPEC is gradually advancing. The work plan related to two routes from Khunjrab to Gwadar has been completed, and the authorities will begin to focus on link routes in the next few months.
Besides, the construction of the second phase of CPEC will also begin soon. The focus of this phase will be on agriculture, industries, trade, and science and technology. It will also create jobs and business opportunities for the common man.
Without the development and operationalization of economic zones, the common man will be deprived of CPEC’s benefits. The project will therefore be exposed to propaganda related to China’s increasing influence in the country. Faced with these challenges, the government needs to chalk out a multipronged strategy to nullify the constraints and maximize the prospects of the corridor project.
CPEC—challenges and prospects