CPEC: Economic instability and political consensus | By Dr Mehmood Ul Hassan Khan

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CPEC: Economic instability and political consensus

Despite the Western propaganda about the so-called stalemate of China-Pakistan Economic Corridor (CPEC), it is still strong, stable and sustainable in the country. Even current economic weak conditions do not affect its pace and productivity.

Most recently, Prime Minister Shehbaz Sharif directed that security of the employees of the Chinese companies should be made more effective. The PM said all facilities should be provided for reviving the projects undertaken with bilateral investment of Pakistani and Chinese companies.

Western media along with some English media outlets in the country claim that a bad spell of economic conditions may lead to a collapse of the CPEC. Moreover, some domestic media outlets are playing a dirty game by saying Pakistan faces a difficult task from a weak economy and so-called growing debt levels.

The Bloomberg International (May 25, 2022) also reported that Pakistan may default for the second time in its history if the country cannot get a bailout from the IMF. It has been further disseminated by the South China Morning Post (SCMP) by portraying imminent default of Pakistan which may jeopardize CPEC projects in the country.  Actually both are incorrect about their sponsored scheme of arrangement and interpretation.

Furthermore, some pseudo intellectuals and fake economists of the country intentionally believe China and Pakistan may close down the CPEC amid Pakistan’s increasing debt problems because they mistakenly think the project has inflicted a rising debt burden on Pakistan. However, official data showed the debt incurred from the projects of the CPEC is only one-tenth of Pakistan’s total foreign debt.

Ironically, they blame CPEC for the current economic difficulties and challenges of Pakistan. With investment in roads, railways and ports, the CPEC offers enormous potential for the country to boost its economy, reduce poverty and promote regional economic cooperation. However, inflation and price hike has become a monster in the country.

Unending conflict between Russia and Ukraine is one of the main reasons for high inflation in the country which has nothing to do with CPEC projects in the country. Unilateral imposition of socio-economic sanctions on Russia has increased the cost of energy and agricultural goods which have already fueled the prices of basic necessities of life. Thus Pakistan’s economic woes are the result of multi-dimensional factors and CPEC is a blessing not a curse for the country.

Most recently, Pakistan Prime Minister Shehbaz Sharif expressed his government’s willingness to work with China to speed up the construction of the CPEC, deepen cooperation on key projects and special economic zones to bring more benefits to the peoples of the two countries. The CPEC has been a flagship project of the BRI and benefits local people through the improvement of local infrastructure. China will never leave the CPEC project unfinished.

In this connection, Wang Wenbin, a spokesperson of the Chinese Ministry of Foreign Affairs said that rapidly changing international landscape does not bring any change to China-Pakistan relations which will remain unshakeable. Wang further said that the two sides reached important policy and political consensus in the five aspects consisting of trustworthy Pak-China friendship, further strengthening of bilateral relations and solidarity and cooperation between the two sides and termed it as an important stabilizing factor in a turbulent and changing world.

Second, he assured that any terrorist attack against Chinese citizens in Pakistan is unacceptable, any despicable attempt to undermine China-Pakistan friendship is doomed to fail, and incidents such as the terrorist attack on the Confucius Institute in Karachi must not recur. Third, both sides agreed that all-round cooperation between China and Pakistan enjoys fruitful results and broad prospects. The two sides will seek greater synergy between their development strategies, further tap into the potential of economic cooperation, and push forward all CPEC projects in a safe, smooth, and high-quality manner,” he added.

Fourth, he said both sides agreed that the world has entered a period of turbulence and transformation, and more than ever, the international community yearns for peace and development. He appreciated Pakistan’s positive role in supporting the Global Development Initiative (GDI) and the Global Security Initiative (GSI). Fifth, he added, both sides agreed that the sound situation of peace, stability, cooperation and development in Asia is attributable to the joint efforts of regional countries and needs to be cherished all the more.

A Chinese Foreign Ministry official said that State Councilor Wang stressed that China and Pakistan are true friends sharing weal and woe and good brothers having a heart-to-heart affinity.

CPEC stands for further strengthening of regional cooperation, development, socio-economic prosperity and revitalization. Unfortunately, BBC and VOA have intentionally projected so-called dissatisfaction in the common people of Balochistan from the Chinese presence and projects.

Gwadar has become a connecting hub and center of socio-economic activities and projects. In this regard, the Eastbay Expressway has been 98 percent completed; facilities of fresh water treatment, water supply and distribution, New Gwadar International Airport; Pak-China Friendship Hospital Gwadar; infrastructure of Gwadar Free Zone Phase-II; a 300 MW coal power plant and a 1.2 million gallons’ desalination plant have been completed. According to various official reports (May 2022), multiple CPEC projects worth $2.1 billion are being carried out in the Gwadar area so far.

Three projects worth $314 million have been completed, which included Gwadar Smart Port City Master Plan, physical infrastructure of Gwadar Port and Free Zone Phase-1, and Pak-China Technical and Vocational Institute. Moreover, the prioritized projects include provision of water in three months and electricity in five months for Gwadar, besides completion of M-8 motorway. The Trading Corporation of Pakistan had been authorized to import one-third cargoes at the Gwadar seaport. The long-term strategy of the government aims to build LNG (liquefied natural gas) and POL (petroleum oil & lubricants) terminals at the Gwadar Port and ensure availability of electricity, water and gas to enable phase-2 expansion of the port.

Nevertheless, effective development communication and positive engagement with local communities should be further cemented and systematized which is indeed critical for the effectiveness and long-term success of these projects. It is suggested that all the stakeholders should prepare a mechanism for an integrated socio-economic development strategy and ensure inclusion of the hopes and aspirations of the inhabitants of Gwadar vis-à-vis CPEC.

Moreover, a desalination plant of about 1.2 million gallons would become operational in six to eight months that would provide drinkable water for the locals. Furthermore, the newly inaugurated state-of-the-art Pak-China Vocational & Technical Training Institute would provide three years’ training to the  local youth, “which is a big contribution by our Chinese friends. Chinese authorities have also recently provided 3,000 solar panels to the poorest of the poor in Gwadar for the provision of electricity. Thus CPEC has been on the noble mission of eradicating poverty, generating new jobs and removing numerous socio-economic irritants from Gwadar and, of course, Balochistan.

To conclude, the government of Pakistan, its main stakeholders and policy makers should now work with China to safeguard the smooth implementation of the CPEC which has been dubbed as “life line” of Pakistan’s economy and “guarantor” of its socio-economic prosperity.