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Pakistan struggles under the weight of CPEC but puts on brave face against US criticism

The $60 billion China-Pakistan Economic Corridor is growing into a problem for Islamabad and could result in massive debt, experts say.

Nayanima Basu
CPEC (Representational image) | Bloomberg

New Delhi: The China-Pakistan Economic Corridor has sparked a new controversy with a top US official condemning at a time Islamabad is pitching the corridor to countries such as Saudi Arabia and Iran to help generate funds to pay back Beijing’s $60 billion investment.

Last week, US Acting Assistant Secretary for South and Central Asian Affairs Alice Wells condemned the project, accusing China of promoting “its own brand of development … it is giving loans and not grants, as the US (does)”.

Pakistanis vehemently defended the CPEC, with voices across party lines slamming Wells for her comments.

According to foreign office spokesperson Mohammad Faisal, Pakistan is committed to the projects taken up under the head of CPEC, and will not derail them at any cost. “The entire nation (Pakistan) will contribute to the development of CPEC,” he said, adding that the corridor would generate employment, help in alleviation of poverty and economic development.

Shehbaz Sharif, president of the PML-N and leader of the opposition in the National Assembly, said in a tweet that Wells’ statement on the CPEC is a reflection of her ignorance about the project.

“I believe President Xi’s Belt & Road Initiative, based on the idea of win-win partnerships, shows the way forward & is an incredible model of interstate relations. Pakistanis will remain grateful to their Iron Brother for not only CPEC but also being an ally & all-weather friend!,” Sharif tweeted.

US Ambassador to Pakistan Paul W. Jones, however, sought to downplay Wells’ comment Monday saying “it is Pakistan’s sovereign right to decide its future (on CPEC). We do not expect everyone to agree with us or agree with every aspect of her (Wells’) speech.”

On the other hand, many in Pakistan too have criticised the CPEC and cautioned against its adverse impact on the country’s economy, including some now in the establishment.


Also read: The China-Pakistan Economic Corridor has a weak link, satellite images show


Criticism of CPEC

The CPEC was initially envisaged as regional connectivity programme between Pakistan and China, worth billions of dollars, as part of Beijing’s ‘One Belt, One Road’ (OBOR) initiative. But since its conception, it has brought more troubles for Pakistan than benefits.

The project was announced by Chinese President Xi Jinping during his state visit to Pakistan in April 2015. It is the largest foreign investment that Pakistan has received so far.  

But according to Sharat Sabharwal, India’s former High Commissioner to Pakistan, the CPEC is looking like more and more problematic for Islamabad.

“The CPEC has slowed down in the last few months. It is now more focused on socio-economic projects. No doubt the project gives high-quality infrastructure, but in the long-term, Pakistan will face a massive debt. It should not turn out to be another Hambantota (Sri Lankan port),” he said.

Current Pakistan Prime Minister Imran Khan’s Tehreek-e-Insaf party had been opposed to the CPEC when it was in opposition, according to Jayadeva Ranade, a former Indian intelligence officer and president of the Centre for China Analysis and Strategy.

“CPEC has been in trouble for quite some time now. Former central bank governors of Pakistan as well as some politicians have all criticised CPEC. Their parliamentary committee on finance has also pointed to the large expenditure being made on the security of the CPEC workers,” Ranade said.

Last year, Pakistan’s minister for commerce, industry and investment, Abdul Razak Dawood, had hinted at a possible review of the CPEC. 

“Chinese companies received tax breaks, many breaks, and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistani companies should be disadvantaged,” Dawood said in an interview to Financial Times.

Pressure from China

China reacted strongly to Wells’ statements.

“Some in US still use the same old script & do the same old plots. They don’t stop though the show has become a complete disaster, & don’t get off the stage even when booed by the audience,” a Chinese foreign ministry spokesperson said Tuesday.

The strongly-worded reaction by their spokesperson was also tweeted by Lijian Zhao, the former Deputy Chief of Mission of Chinese Embassy in Pakistan who is now Deputy Director General in the Information Department of the Ministry of Foreign Affairs of China.

Earlier this year, Shamila Chaudhary from the Johns Hopkins University School for Advanced International Studies told the US Congress during a testimony that Pakistanis who criticise the CPEC are often labelled as “terrorists”.

“Rarely will you read an article that’s critical about the CPEC in the Pakistani media. Very rarely. There’s been a media capture essentially, and there’s only the CPEC narrative because people are scared or they’ve been intimidated or threatened not to do certain pieces,” Chaudhary said. 

According to reports, Pakistan’s former minister for planning and development, Makhdoom Khusro Bakhtiyar, was apparently replaced with former finance minister Asad Umar because China was upset with him. China also demanded the removal of certain other ministers too, according to reports.


Also read: Pakistan to raise new division HQ in Gwadar to protect $60 bn economic corridor to China


 

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2 COMMENTS

  1. I think so far only about $ 20 billion has been invested. Apart from the projects being expensive, capital intensive, difficult to service in purely economic terms, the fragile state of the Pakistani economy is a major factor. Both CPEC and BRI will have to be reworked to succeed.

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