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A welcome CPEC benefit

Updated Mar 18, 2017 09:12am

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GIVEN its magnitude, the China-Pakistan Econo­mic Corridor (CPEC) remains the subject of considerable debate in the country, with several experts weighing in with their figures of how much the $50 billion-plus projects are going to eventually cost Islamabad.

Over a 30-year repayment period, these figures, which do not differ wildly from one another, put the cost of CPEC at around 4.5 to five per cent per year. This means Pakistan will have to repay the $50bn plus interest at around $3bn to $3.5bn a year for the period.

Experts are right in asking whether the projected growth in economic activity as a result of CPEC generate enough national wealth for the country to service and repay annually for 30 years what seems not an insignificant amount of money, totalling about $90bn.

The Sri Lankan example has also been pointed out, where a large Chinese investment did not necessarily generate enough income or revenues for Colombo to successfully service the debt. This led to erosion of ownership of key assets such as a seaport and loss of ‘sovereignty’ over some 15,000 acres (6,070 hectares) of land earmarked for an industrial zone.


The benefits of this investment can only be accurately assessed if its impact on terrorism can be calculated.


Apart from raising the matter of annual cost, my Dawn colleague Khurram Husain, with an enviable grasp over economic and business issues, has also highlighted the matter of ‘exclusive’ economic zones for Chinese companies along the corridor and asked whether such exclusivity is desirable from the Pakistani point of view.

Social media has taken this debate to a different level altogether, where some analysts have asked if the large sums to be repatriated mean that China may come to represent in Pakistan in the 21st century what the East India Company was to India in the 19th.

Examine: CPEC is not another East India Company. Here's why

Whether this argument is valid or alarmist I will leave to the reader. What I do wish to say is that there can be no denying that Pakistan, with its huge defence and debt-servicing allocation, has very little left over for infrastructure development.

And it is also not rocket science to say that an economy can only grow to a point with poor or obsolete and creaky infrastructure in this day and age, and no more. Nawaz Sharif critics may deride the prime minister for being obsessed with building multi-lanes motorways. But they will also acknowledge that even with the major ports in the country, the road and rail infrastructure along the north-south axis exists more or less in a time capsule.

This may have been expanded but nowhere near the needs of a country with a population of 200 million. One need only drive from Karachi to Peshawar, for example, or take a train to understand how little has been done in any real way since the colonial plunderers left over 70 years ago.

Also important is to examine how many investors were prepared to sink in the required investment of the magnitude that the Chinese are pledging. China’s imperative for doing so is clear as its western part lags in the pace of development attained by the rest, particularly its east.

CPEC provides western China with a quick connection, access to the rest of the world via Pakistan and, therefore, it is sinking in what from Islamabad’s perspective is an unimaginably huge investment.

However, for any cost-benefit analysis of this investment to be all-encompassing and meaningful it needs to include factors generally excluded from such analyses. The benefits of this investment can only be accurately assessed if its impact on religious militancy, even terrorism, can be calculated.

The Chinese have long been concerned with the extremist Islamic movement in the western reaches of the People’s Republic and also understand where some of its own militants find common cause, go and train themselves only to return and cause unrest.

Sources say the Chinese leadership has repeatedly raised this issue with both civilian and military leaders in Pakistan. Although they have found sympathetic ears, they also realise that this is one area where the civilians’ ability to deliver is very limited.

Against the backdrop of newly shaping realities in the region, where India sees itself as equal to China regionally (of course with Washington’s encouragement), the Chinese leadership is moving closer to Pakistan, particularly in military cooperation.

As western sources of armaments appear more and more challenging and expensive for Pakistan, its reliance on China is increasing. Latest reports in the media suggest a deeper commitment between the two to enhanced defence production, among other areas.

Who would have been surprised to see the photo of Chief of Army Staff General Qamar Javed Bajwa meeting his counterparts in the People’s Liberation Army high command? But the fact that he also met the foreign minister for face-to-face talks is significant.

One can (and with justification) just focus again on the civil-military balance in the country’s power structure, or perhaps look at a wider, global perspective and its impact on us. To me, the only institution in the country capable of taking religious extremism and terrorism head-on is the army.

After all, for years and years, GHQ has nurtured and used such elements to project its power beyond our borders and considered them as a second line of defence for our nuclear-armed country. In the process we have all witnessed the disaster that has unfolded.

If it takes Chinese persuasion to convince our key decision-makers that it may have been a bad idea all along and, in any case, that it is definitely not viable any longer, it would be a huge, possibly incalculable, benefit of CPEC. Who would not welcome it?

The writer is a former editor of Dawn.

abbas.nasir@hotmail.com

Published in Dawn, March 18th, 2017

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Author Image
Abbas Nasir is a former editor of Dawn.

He tweets @abbasnasir59.

The views expressed by this writer and commenters below do not necessarily reflect the views and policies of the Dawn Media Group.



Comments (22) Closed



wellwisher Mar 18, 2017 08:20am

Only an intelligent person like you could have pointed the "real" benefit of CPEC

khaled Mar 18, 2017 09:22am

Aptly analyzed, 'Whether this argument is valid or alarmist I will leave to the reader' I think dawn readers are intelligent enough to differentiate between the two.

Secular Pathan Mar 18, 2017 10:45am

Excellent and Thank You China, you are helping us fight extremism

Jubeir Mar 18, 2017 11:16am

China has bet big on the 3'rd world laggards especially Africa and the strategy is slowly but surely failing . Chinese are set to lose approximately 100 bln $ in their African adventures to write downs . Moreover India has not invested much in Africa but still manages to get minerals and natural resources at the same prices as the Chinese and also controls the gold and diamond trade much to the world's envy . Chinese build the roads ,Europeans build the cars and Indians appear to be the ones driving . Bottom line is Chinese prefer state to state contact with dictators and Indians tend to be people to people with some great entrepreneurial skills . No propoganda intended just sharing honest observations from my numerous visits to Kenya,Ghana,Tanzania,Nigeria an SA.

naji Mar 18, 2017 11:28am

We are still not trying to eliminate terrorism, the reason is, we have not taken a single step towards it's elimination. No serious step to revise basic education, higher education, medical facilities, policy for northern area's people, stop migration from one province to other, develop rural area, Fresh water supply and sanitation facilities for all, real industrialization in all provinces, Dams for power. CPEC is 90% beneficial for China and 10% for Pakistan, but this 10% is also good for a poor country like Pakistan.

Junaid Mar 18, 2017 12:28pm

Why does an external country needs to get involved in the internal matters ?

khan Mar 18, 2017 01:20pm

doesnt matter who wins or loose, PAKISTAN needs CPEC to change its position in the world today...

we need this to succeed...

Einstein babar Mar 18, 2017 01:46pm

an illiterate person like me can calculate that probability of benefits is far higher than loss still our writers start everything about CPEC with negative attitude and this is just because they want to show how different they are

deva Mar 18, 2017 03:00pm

simple, road built by others can not help. it's upto the citizen of the country who needs to take things in their hand without expecting from country. And people should be do there own bit first then blame on others. Somehow pak needs to connect to there roots which were of indian. A person needs to be himself

A.M. Khawar Mar 18, 2017 03:05pm

This article sketches a different perspective. A nation of 200 Million sorely needs to modernize its antiquated energy and transport infrastructure to survive and flourish in today’s world, but we cannot afford the needed funds. Hence CPEC is welcome.

Technology of war fare has obsoleted our obsession with depth beyond Pakistan Afghanistan border, for second line-of-defense. Walking away from this obsession liberates us from unnecessary constraints and creates stronger resolve and more options to eradicate terrorism in all forms without distinction. All terrorists are bad. No exception.

Constant Chinese pressure/influence/persuasion on Pakistan government, in this regard, is welcome. Besides, CPEC complements our defense relationship with China.

Thank you Abbas Nasir, Sir. Indeed there are CPEC benefits beyond the calculated $90 Billion payment over 30 years. Most all visions transcend calculations and cannot be proven feasible until much later time in future.

Sallu Bhai Mar 18, 2017 03:50pm

No real benefit except increased multitude of national debt!

Akram Mar 18, 2017 04:39pm

good well thought out article,

Ali pakistani Mar 18, 2017 04:43pm

@naji do not agree with your assessment, in my opinion the security establishment has taken a policy U turn after 9/11 but to completely eliminate extremism it will take some time as we have nurtured it for nearly three decades

Akram Mar 18, 2017 04:45pm

@Jubeir are you aware China's GDP is about 5 times the size of india's?

You think the indians can teach China? anyone else would suggest indians should learn from the Chinese!

Akram Mar 18, 2017 04:42pm

@naji Diamer Bhasha dam and Dasu dam are 2 huge dams being pursued currently by the government.

Pakistan need to increase exports Mar 18, 2017 04:55pm

Pakistani people in general are family or tribe or clan oriented who generally do well as a small group though consensus. But as a nation they are so divergent that they can not build consensus of hardly anything so there is tendency to be passiveness to brush things under carpet and pretend problems do not exits. To this reactive mode only things works if there are external events like '71 or 9/11, a kind of kick from external power e.g USA but still they bickers should they have got a better deal or got betrayed in the deal so on so forth. So if you think CPEC, in this context, it is kind of a kick from China to Pakistan to get its house in order. Due to CPEC, civil and military leadership got the motivation to act together on all different fronts which were due for many years. I would say the act to root out terrorism alone due to CPEC would be the greatest of all benefits to Pakistan and cant not be counted in money term.

mangoman Mar 18, 2017 05:25pm

In other words, the element of risk is still high. I have only one question, in a project where the risk element is high, it's normal practice to do a pilot project and implement the rest in a phased manner. Pakistan went in at one go as China wanted access to Gwadar. Against this, Pakistan didn't get anything, no loan write off, no grant, nothing. So, in effect, Pakistan took the risk without anything to hedge from China. That is where I have an issue with the government decision.

JAMIL SOOMRO, NEW YORK CITY Mar 18, 2017 07:19pm

In my opinion Pakistan should ask China for a further grace period of 10 years for paying back the giant $90 billion.From 30 to 40 years would give Pakistan some relief and as such it would be able to channel its National Funds towards badly needed Medical Facilities and Education.

S. A. M. Mar 19, 2017 03:56am

Pakistan is to be very careful of its spendings because repayment of loans of this magnitude is a big burden itself. with respect to the benefit of curbed terrorism though it's very bright thought it could be used by the concerned department as a weapon to deter the investor from confiscating our assets when we fail to repay. thus there's apparently no benefit.

Jups Mar 19, 2017 10:44pm

Well thought out article, religious extremism and using such elements to project foreign policy never pays.

D.H. Mar 20, 2017 10:20pm

Excellent.

Imran Ahmed Mar 21, 2017 03:26pm

Do our boys understand what has been written here? If they do, will they respond with introspection or view it with paranoid defensiveness or belligerence?