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A CPEC which stumbles on The Excelsior 31 Aug 2023
In a meeting, last week, with Pakistan’s former federal minister, Ahsan Iqbal and a Pakistani delegation, Chinese ruling Party Secretary, Ma Xingrui, stated in Urumqi, that the Chinese President, Xi Jinping, desired to make the CPEC (China-Pakistan Economic Corridor) an ‘exemplary’ project of the BRI (Belt Road Initiative), with Xinjiang playing a central role. Pakistan and China had recently celebrated 10 years of the CPEC. The Chinese Vice Premier, He Lifeng, had visited Pak for three days as part of the celebration.
Xi Jinping also sent a message mentioning ‘China will work with Pakistan to constantly improve overall planning and expand and deepen cooperation to make CPEC high-standard, sustainable and people-centred, and further build it into a demonstration project of high-quality Belt and Road cooperation.’ He added, ‘China will always stand firmly with Pakistan.’
Around the same time, the Italian Defence Minister, Guido Crosetto, stated in an interview, ‘The decision to join the (new) Silk Road was an improvised and atrocious act.’ He justified this by mentioning that the BRI multiplied China’s exports to Italy but did not have the same effect on Italian exports to China. Crosetto expanded concerns of most nations stuck in the BRI, by adding, ‘The issue today is: how to walk back (from the BRI) without damaging relations (with China).’
Currently almost a dozen countries, including Pakistan, are facing instability and possible economic collapse largely due to unsustainable debt from China. Simultaneously, Beijing is unwilling to forgive while remaining secretive on the quantum loaned and terms of repayment. In Maldives, when the government of Mohamad Nasheed took power in Sept 2018, it was unaware of the amount owed to China. The Chinese embassy gave the figure as 1.4 billion, which was almost 30% of the GDP.
As per inputs from Pakistan, the CPEC has thus far led to USD 25.4 billion in direct Chinese investment in various transport, energy, and infrastructure schemes. This is in addition to loans and currency swap agreements made over the years. Most of the projects and investments have come under scrutiny due to lack of transparency and provision of tax benefits to Chinese investors. The IMF believes that China holds 30 billion of Pakistan’s 126 billion debt. No one is certain of true figures as agreements forbid sharing details.
The CPEC would have been viable if it was exploited by other nations in the neighbourhood, including India, as also if it was extended to Afghanistan. The Chinese appear to be developing their own direct access to Afghanistan, ignoring Pakistan. Simultaneously, Indo-Pak relations are at a level where India will not exploit the CPEC. With no means to generate funds, China has slowed or almost halted further investments in the project. Other reasons for China to slow down its investments include high levels of corruption, internal politicking and heightened security threats in Baluchistan.
Simultaneously anger against the CPEC is growing in the province which largely impacts it, Baluchistan. The suicide attack on a Chinese convoy by the Baloch Liberation Army (BLA) in Gwadar recently was the latest in the series. While Pak and China claimed there were no casualties, the BLA announced that there were four Chinese and nine Pak soldiers killed, as also both the suicide attackers. Inputs mention an exodus of Chinese from Gwadar.
The attack in Zhob on 12th July, in which nine Pak soldiers were killed was also indirectly connected to the CPEC. The town forms a vital link on an alternative and shorter route being built to connect Gwadar. This attack was carried out by the TTP (Tehreek-e-Taliban Pakistan), whom Pak accuses of being backed by the Taliban government in Kabul. With the TTP extending its operations into Baluchistan and possibly operating in conjunction with the BLA, the CPEC will face greater challenges.
While Pak has raised two division worth troops only for the security of the Chinese, attacks continue unabated. For once, Pakistan cannot blame India aware that Indian presence in Kabul is very limited. Post the attack in Gwadar, China demanded that Pakistan ‘severely punish the perpetrators and take practical and effective measures to prevent similar incidents.’ In the same voice it advised its citizens in Pakistan to be mindful of their security.
Where do terrorist attacks on the CPEC leave Pak and China? Abdul Basit, Pakistan’s former High Commissioner to India and currently associated with the Rajaratnam School of International Studies at Singapore states, ‘The Chinese know what they have gotten themselves into, and are learning the ropes on how to muddle through.’ He added that the CPEC ‘will continue alongside terrorism.’ The question remains whether China is sinking in its own swamp?
The CPEC is Xi Jinping’s flagship program and stopping it will be a major diplomatic and financial setback. This implies that China will continue pumping good money after bad, though in reduced quantities. Options open to China include employing its own troops in Pak to guard its workers but that could only increase attacks, embarrassing the Chinese. The other option is to bribe the Taliban government to rein in the TTP and BLA. This is possibly what China would do.
For Pakistan, there is no option but to become a Chinese puppet, despite its talk of balancing ties between Washington and Beijing. Islamabad is aware that if China does not extend loans, its economy may collapse. Its dependence on Chinese military equipment have reached alarming proportions and it again has limited options. Whatever China pumps into the CPEC comes as a blessing to Pak.
Pak also has limited global friends. West Asia, on which it banked, has changed direction. They will invest in Pak but demand returns. The days of unlimited charity are over. The west looks at Pak with suspicion. Afghanistan does not trust its intent and would prefer ties with India, which can provide it with aid. The only benefit to Pak is that growing India-China discord reduces India’s military threat, as Delhi concentrates northwards.
The CPEC will stumble on because China cannot withdraw and Pak cannot invest its share. Both are stuck in a swamp from which they cannot extricate.