It is unfortunate that the Sino-Pak friendship is being questioned

If the China Pakistan Economic Corridor (CPEC) wasn’t already an enigma, the recent debates regarding its pros and cons have muddled this into an even bigger mess. On one hand, there are the knockers who didn’t shy away from labelling it as the future East India Company (EIC), and on the other, we have the blind patriots – the ones that hold CPEC at the highest level of sanctity, that merely questioning the transparency regarding CPEC’s projects amounts to treason for them.

Undoubtedly, these directionless debates have a lot to do with the suspicion and political sensitivity created by the government around the CPEC framework. However, to me, both prevalent views are far-fetched and perilous to national interests.

At first, to equate China’s role, within the context of the CPEC project, with that of EIC is simply an embellishment. Such an over-statement has been countered by various writers in recent days, rather successfully. And quiet evidently, a strict comparison of both is fallacious and misplaced for the simple reason that the days of claiming ‘EIC is like colonialism’ are long gone. Since Pakistan was in a weak state, China’s investment should have been welcomed. China already has deep pockets, thus one should not expect the country to take anything away from us, the way the EIC robbed the subcontinent of its resources.


However, the EIC analogy cannot be completely disregarded. The days of colonialism might be past us, yet, states no longer employ the weapons of the colonial era to subjugate other states, as capitalism now does it for them. In the words of Kwame Nkrumah,


“Capitalism is but the gentlemen’s way of slavery.”

For a state to thrive in this era of capitalism, its financial independence is integral. When a state is financially dependent on another, the way our country was on Saudi Arabia and the United States, that is when a phenomena like that of the EIC in the subcontinent occurs.

Nevertheless, it is the second view that seems more precarious. Nonsensical patriots, who are trying to make CPEC a sacred cow, are forgetting that it is not China’s gift via the Pakistan Muslim League-Nawaz (PML-N) government to the people of Pakistan. If that were the case, then there would be nothing to ponder over. But to our dismay, most of the projects under CPEC are loans which we, the public exchequer, will have to pay back. Unfortunately, the mysterious CPEC framework agreement has not been revealed yet, thereby, we do not know about the terms and conditions encircling the proposed $51 billion investment. In the words of the Governor of the State Bank of Pakistan,


“I don’t know out of $46 billion [in CPEC deals] how much is debt, how much is in equity, and how much is in kind.”

Thus, turning a blind eye to the whole thing is not patriotism, but on a very conservative scale, it is imprudence.

Both the views advanced in the CPEC debate have been poles apart. Ignoring the fact that we as a nation are currently facing a paradox – where on one hand, there is the necessity for such an extravagant investment in our country and on the other, the fear of subjugation at the expense of such an investment.

The antidote for this problem lies with the government, who is primarily responsible for the smooth and uncontroversial functioning of the corridor projects. Unfortunately, the PML-N government has made this matter more ambiguous by building a smokescreen around the CPEC framework agreement. Secondly, and more recently, the ignorance towards Public Procurement Rules in CPEC projects means that the impetus for speculations has been renewed. There is an inherent need for the government to step up and put an end to all the speculations by implying transparency in the CPEC projects.

It is unfortunate that the Sino-Pak friendship is being questioned at a time where a collaboration between the two friendly states is at an unprecedented high – the reason being the lack of transparency around this collaboration. Thus, an onus also lies on the Chinese counterparts as well; they must realise that giving loans through backdoor channels won’t help their cause. For the success of their ‘One Belt One Road’ plan, of which CPEC is an integral part, they need to make sure that the people of Pakistan are engaged and given a sense of ownership in the corridor. The US-Pakistan relationship must serve as a lesson to be learnt – despite the fact that the US injected billions of dollars into Pakistan over the last decade, they were still disliked as a country.

For now, as a nation, we have to redeem ourselves from this state of disunity and realise that by labelling CPEC as a form of colonialism, or making it contentious, might dissuade our foreign investors. Similarly, turning a blind eye to accountability would mean renting Pakistan out on the terms and conditions of investors. Therefore, positive criticism and calculated pressure must be exerted on the authorities to ensure that we are provided with the chance to utilise our strategic location. Firstly, to warrant a profit out of the loans we are availing, and secondly, to result in economic prosperity rather than a burden of unpayable debts.

Source: The Express Tribune

Get a grip on the CPEC

HOW does one get a grip on the proposed China-Pakistan Economic Corridor (CPEC) and its associated investments without any hard information except for the hype? In the absence of any mechanism for credible evaluation I suggest we hold it up against a historical parallel and see what emerges by way of tentative conclusions. Some discussion grounded in real experience may be better than taking sides in the dark.

Around the turn of the 20th century, the British invested vast sums of money in the part of the subcontinent that now comprises Pakistan. Amongst these investments were the network of canals and barrages, the post and telegraph, and roads and railways. All included it would have likely added up in real terms to be bigger than the $56 billion associated with CPEC.

What came of all that investment and what economic transformations did it sustain? At the macro level, Pakistan remains a desperately poor country with around a third of its population struggling to survive below the poverty line. Almost half the population is functionally illiterate without access to safe water and sanitation or adequate healthcare. Stunting, malnutrition and infant and maternal mortality are at levels considered unacceptable in the rest of the world.

The sobering conclusion would be that even if the investments had huge economic payoffs, extremely venal governance ensured that while some people became phenomenally rich very few of the benefits trickled down to the majority in any meaningful sense.
What came of all the colonial-era investment and what economic transformations did it sustain?

Notwithstanding the issues of governance and distribution, which remain as critical now as then, the question remains: did the investments have huge economic payoffs? Even to speculate intelligently on the question one would need to disaggregate the investments and consider them separately.

Take the canal colonies and the barrages. I believe most people would accept that the outcomes were positive and significant. One can assess the outcomes in terms of crop outputs, crop yields, employment created, or incomes generated for farming households.

Next, consider the railways where the comparisons become more interesting. The link between Karachi and Peshawar via Hyderabad, Sukkur, Multan, Lahore, and Rawalpindi can be considered the central artery of the Pakistani economy capable of transporting people and products efficiently and economically. Once again, I believe there would be agreement that the outcomes were positive and the payoffs significant.

Now consider some other investments in the railways that turned out differently. Among these were the links between Peshawar and Landikotal on the Afghanistan border, the link between Quetta and Chaman that was intended to have been extended to Kandahar in Afghanistan, and the Trans-Balochistan railroad from Quetta to Zahedan, inside Iran.

All these could be considered as economic corridors of their time. Even if they were not intended as such, they could have become so after the independence of Pakistan. The Trans-Balochistan railroad extended 455 miles (732 kilometres) with 38 stops linking very friendly countries between which much trade was possible. Indeed, under the Regional Cooperation for Development there was the possibility of extending the link to Turkey and thereby into Europe, an opening with immense economic potential. Today, the Peshawar-Landikotal link is inoperative, and the Quetta-Zahedan link operates on a nominal frequency of twice a month. None of these corridors had any transformative impact on the local or national economies.

Take roads as another example. The British upgraded and extended the Grand Trunk Road, an ancient trade route linking populated habitations, to great and sustained benefit. Contrast the limited economic impact of the more recent Lahore-Peshawar motorway. The equally recent Karakoram and Thar-Karachi highways have had virtually no significant transformative impacts on the local economies except to make it easier for local labour to migrate to more prosperous areas for employment.

Some tentative conclusions can be adduced. For investments to yield economic benefits, it seems a necessary, if not a sufficient, condition for them to either generate employment or to connect populated locations at relatively comparable levels of economic development. The historical evidence suggests that routing corridors through sparsely populated territory even with associated investments that create very few jobs is unlikely to be transformative. And linking disproportionately developed areas without prior complementary investments may just accelerate a drain of people and resources from the less developed regions.

It is indeed possible that investments in roads in some sparsely populated areas, eg, in the northern areas or along the Makran coast, would pay off economically if as a result a significant inflow of people is facilitated as would be the case with a major boost to tourism. But such prospects are scarce given Pakistan’s security conditions and increasing social conservatism.

It will no doubt be argued that the unsuccessful rail corridors mentioned here were not made by the British for economic but for strategic military purposes and therefore comparisons with CPEC are invalid. However, as mentioned before, there was nothing to prevent the conversion of the readymade investments to economic purposes after 1947. There was significant trade potential both with Afghanistan and Iran and the latter was a very friendly country at the time. The shrivelling of the corridors should prompt serious questions inquiring what went wrong after all the investments were made.

At the same time it could be argued that CPEC is an equally strategic initiative of the Chinese presented as one with transformative economic payoff for Pakistan. The latter remains to be demonstrated independently and objectively. The historical evidence cautions that mere hand-waving is not enough.

One should also consider what might be the fate of CPEC if relations with China turn sour in the future. This may seem a far-fetched concern at this time but the evolution of the relationship with Iran should provide a reality check. Pakistan’s abysmal relations with all its primary neighbours do not leave much room for complacency and demand a credible fall-back alternative.

If the national objective is to further the development of the lagging provinces of Balochistan and Khyber Pakhtunkhwa, it might be better to think in terms of employment-generating investments in the regional economies much as the canal colonies created jobs in the Punjab in the 20th century. It might make more sense for economic corridors to follow and not precede such investments.