CPEC: Rhetoric Over Substance

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The China Pakistan Economic Corridor has been in the limelight ever since its provenance. Pakistani politicians and military leadership made it out to be the project that would change the face of the country. The hype was extraordinary.

In Pakistan it was seen as a huge expression of trust and deepening of ties from its ‘all-weather’ ally China. For China, however, the CPEC is nothing but one of its extensions to establish greater geopolitical clout in the world. China genuinely isn’t interested in uplifting Pakistan’s economy or the standard of living; a poorer, dependent Pakistan suits it much better. Pakistan is simply a means to an end. However, it cannot be questioned that the CPEC has allowed China to further strengthen its hold on Pakistan’s economy, military and even culture.

Despite all the spectacular coverage and aura around the CPEC, in absolute reality, the project has turned out to be more bluster than substance. China has used Pakistan in a way that is almost shocking. And the Pakistani establishment has simply allowed it all because it needs to show its people that it does think of something beyond terrorism and Kashmir, and that as ties with America become strained it does have another superpower to fall back on.

I present some facts made by Dr Bengali, an economist in Pakistan, about the CPEC.

•             CPEC agreements haven’t been made public. The government of Pakistan doesn’t have documents to support its claims about the project.

•             CPEC will have an adverse effect on domestic businesses. China will export everything to Pakistan as it has tax exemptions. This will widen the trade imbalance.

•             Contrary to popular view, the $58-60 billion project isn’t all funded by China. All CPEC roads are built with Pakistani resources.

•             Pakistan is paying for the costs of providing security – 9,000 Pakistan Army soldiers and 6,000 para-military personnel – to Chinese workers.

•             He reveals that Pakistan’s share of revenues from Gwadar Port is just 9 percent while China’s is 91 percent. He adds that the Gwadar Port is built by China for the purpose of re-exporting Chinese products brought into Pakistan via a land route. He claims that Gwadar can’t be a commercial hub like Dubai as Gwadar lacks water to support development. He pointed that water is supplied to Gwadar city at a cost of ₹25,000 through water tankers. Water shortage is chronic in Gwadar which is often highlighted by people living in Balochistan.

A former governor of the State Bank of Pakistan has made some more very valuable points to expose the reality of the CPEC.

•             Chinese investors have been guaranteed a 17 percent return in dollar terms on their equity! (how will that return be ensured only God knows)

•             For the $35 billion loaned by China to Pakistan for energy projects, Pakistan will have to make annual payments of $2.4 billion from its current account.

•             Loans of $15 billion for infrastructure made by China would have to repaid by Pakistan at 2 percent interest over a period of 20 to 25 years. On account of these loans, Pakistan’s debt-servicing payments would rise by $910 million annually. Total burden on external account would be $3.5 billion.

Some other fascinating points that show how China is ‘invading’ Pakistan.

•             Thousands of acres of agricultural land will be leased to Chinese enterprises. The entire benefit of the growth will be sucked by China not giving Pakistan’s private sector any gains.

•             China is all set to monitor every action of common Pakistanis. China will install a full system of monitoring and surveillance in many cities like Peshawar and Karachi. 24-hour video recordings of roads and marketplaces will be done for law and order purposes. This shows the level of trust the Chinese have on the common Pakistani.

•             It is even being said that by 2048 the Chinese population in Pakistan will be more than the population of Balochis!

•             China is going to OWN Pakistan. A small indication of which was a Chinese consortium recently buying 40% stake in Pakistan Stock Exchange.

In conclusion, Pakistan will become a cash-cow and military base for China. More so, China will completely alter Pakistan’s culture in a few years’ time. Seems like India is going to have two China’s on both its borders in the near future.