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Chinese whispers

Updated April 19, 2015


The writer is a member of staff.
The writer is a member of staff.

Numbers can be obscure and complicated, but sometimes they tell a tale of their own. So, with fair warning, chew on these figures a minute: $5.4 billion, $3.7bn, $2.1bn, $1.6bn, $820 million, $1.4bn, $1.6bn and $710m.

That’s the Foreign Direct Investment in Pakistan for each fiscal year from 2007-08 to the first nine months of 2014-15. Not very impressive, is it?

Peak FDI was $5.4bn in 2007-08, the year after the highest GDP growth rate of the Musharraf era of roughly 7pc.

In the first nine months of this fiscal year, FDI (basically, foreigners setting up or buying businesses inside Pakistan) from every country of the world, including China, was $710m.

Now, compare that to the figure you’re going to be hearing a lot this week: $46bn.

The Chinese are coming and President Xi is bringing $46bn worth of surprises with him. $46bn is three times the total FDI Pakistan has received from every country in the world put together over the past eight years combined.

$46bn has so many zeroes in it that it would put Nawaz’s bank account to shame. $46bn is so big the PML-N owes the PTI an apology.

For the last time Xi was visiting, back in September, in the midst of the dharna, he was bringing just $34bn with him. Fast forward seven months and Xi’s bag of goodies has grown by $12bn. Thanks, Imran!

They’re going to change the route, raise a special protection force and Gwadar will be more fortified than GHQ.

$46bn also means, if you’re not an N-Leaguer tripping over himself to flog that eye-watering sum, some hard questions need to be asked.

So, let’s start with Turkey. Remember that distant past, some seven years ago, when Punjab was in love with Turkey?

Turkey was the solution to Punjab’s problems and soon there would be so many Turkish people in Punjab and so many Turkish liras sloshing around that you’d think Lahore had become a part of Istanbul’s old quarters. All courtesy the N-League.

But a funny thing happened: nothing. No Turkish people, no Turkish liras, no turning Punjab into a sea of red and white. The PML-N’s economic love affair with Turkey proved such a non-event that you may struggle to remember the frothy nonsense the N-League spouted mere years ago.

Nope, all we got were Turkish soaps.

(If you really want to know the net FDI position, Turkish investors have withdrawn $3.2m from Pakistan this year.)

Is China the N-League’s new Turkey?

The N-League would offer two ripostes. One, Zardari wooed the Chinese too, travelling there so frequently while president that the Chinese ran out of things to show him and places to host him in. Two, the Xi ascension in 2013 marked a shift in Chinese emphasis under the new regime.

Basically, on Zardari, the argument is that he tried but failed because he had no plan or focus, asking the Chinese for investments in anything and everything. There was also the, um, Zardari angle: potential Chinese investors would be approached by middlemen claiming to speak on Zardari’s behalf and looking for a slice of any deal.

The PML-N’s approach is more focused and refined, with the bulk of investments sought in energy and infrastructure and maybe a couple of other sectors thrown in. As for Xi and his team, far west China and its neighbours figure more in their economic, political and regional plans than the team running China the decade before.

Pair ‘more focused’ here with ‘more interested’ there, and ka-ching. A $46bn jackpot. A veritable yellow brick road of trade, electricity and prosperity running the length of the country. All aboard.

But hang on. There’s no real reason to believe any of it. Let’s roam that would-be corridor a bit.

Start with Gwadar. There is an insurgency in Balochistan. The one that the army chief vowed to crush this week. The same one that a two-term army chief and a military dictator were unable to tamp down.

The very same one that has rendered the province into a giant no-go area for over a decade. Anyone thinks twice before travelling to Quetta. No one ever thinks of travelling south of Quetta.

But from there is to rise the phoenix of Better Pakistan. Because, y’know, it’s always economy before security. And because, y’know, we’ve got a winning strategy to pacify the Baloch.

Oh, right. They’re going to change the route, raise a special protection force and Gwadar will be more fortified than GHQ. Which is exactly what every great trading corridor in the world looks like. Or not.

A Punjab-dominated centre creating an economic corridor from Gwadar, through some part of Balochistan and, eventually, to the border with China? That would be like the Northern Alliance in Afghanistan trying to set up a trading hub in Kandahar to service Mazar-i-Sharif.

Try electricity on for size. The Chinese are apparently aching to pump mega dollars and megawatts into the energy sector here. So much money that we can forget the ‘i’ in IPP and start calling them CPPs instead.

Here’s a funny story though. The N-League has been at it for a while. Dreaming up stuff like coal-fired power plants laid out like a string of black pearls across Pakistan. Imported, exported, coal-ported. But stuff keeps happening to that dream. Over and over again.

Like the Chinese balking, the numbers not adding up, the investor demands piling up and the logistics falling apart. And the naughty little rumour that much of it is designed to benefit the Sharif cronies — something that, again according to naughty rumour, has got the Chinese quite skittish.

Turns out when a desperate braggart meets a shrewd rich guy, the desperate braggart usually doesn’t get what he wants. Who knew.

So, if even a few of those already hyped billions ever materialise, be pretty sure they will be flowing from the desperate braggart — that would be us — to the shrewd rich guy — that would be the Chinese.

Oh, and every time you hear $46bn this week, do yourself a favour and think of $710m, the wretched sum Pakistan has attracted from investors in every country of the world combined over the past nine months.

The writer is a member of staff.

Twitter: @cyalm

Published in Dawn, April 19th, 2015

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