Shahzada Irfan Ahmed

Over the last few weeks, the China Pakistan Economic Corridor (CPEC) has been under the scanner of national and international media. It is being discussed widely with a renewed vigour and media personnel are asking tricky questions, mostly about the apprehensions surrounding this initiative.
Soon after taking over, the new PTI government had announced it would hold audit of every single project under the CPEC, launched during the last tenure of the PML-N government. This strengthened the general perception that things would not be as smooth as before. If this was not enough, Advisor to Prime Minister, Abdur Razzak Dawood, suggested putting CPEC on hold for a year. His point was that there was a need to renegotiate these projects in a way these became equally beneficial for both the countries. The outgoing government, in his opinion, had signed agreements hurriedly and without ensuring a win-win situation for both the countries. He had complained that Chinese companies were able to make lower bids because of tax benefits they enjoy and Pakistani companies could not compete due to this very reason.
Then there were reports about power projects being abandoned and removed from the list of CPEC projects. In yet another development, Planning, Development and Reforms Minister Khusro Bakhtiar announced that Pakistan government has prioritised four areas of cooperation under CPEC, namely industry, socio-economic development, agriculture and Gwadar. The way this news was shared by the government gave an impression that it was on their insistence that China had agreed to revise these priorities.
Coming to the international media, there was a report recently in an American newspaper claiming CPEC has major military intentions though China is presenting it as a purely economic project. Besides, there is an argument that the US is countering the Chinese influence with the help of its allies — Saudi Arabia and the UAE — that have come forward to help out Pakistan in tackling its current account deficit.
Against this backdrop, one feels compelled to discover the factual situation that exists on ground and get an update on the status of this project termed game changer for Pakistan. TNS talked to different people to have their point of view and accessed relevant documents and statements. Some of the quotes and observations follow below.
Business and economic journalist Khurram Hussain does not find anything new in the CPEC agreement after the change of government in Pakistan. He feels things are going as per planned though there was a slowdown due to the difficulties the PML-N government had to face after being embroiled in Panama scandal. He tells TNS that the first priority under CPEC was to enhance power production capacity and infrastructure. “As it is claimed Pakistan has enough power now and new infrastructure has been developed, the focus is bound to shift to other areas of cooperation and the new government has no role in this shift.”
Regarding the shelving of the proposed 1,320MW Rahim Yar Khan coal-powered plant, Hussain says “there is nothing to worry about as it has been done on Pakistan’s request.” This project, he says, was abandoned during the Nawaz government on the pretext of Pakistan having enough power for the time being but the powerful people behind this project got it restored. The power ministry secretary and the National Transmission & Dispatch Company (NTDC) were removed from their post for declaring this project not urgent at that moment. “The reason cited for shelving it this time is also the same; we shall not get caught in the capacity trap.”
Another major development regarding CPEC is that the Chinese Embassy has finally opened up and now it is quick in responding to media reports. Earlier, during the previous government, it would be very rate to see it come up with any clarifications. Recently, it has reacted to the claim of extraordinary burden on the Pakistani government to repay the loans it has obtained for CPEC projects.
In a statement, the embassy clarified that currently 22 early harvest projects under the CPEC have been completed or are under construction, with a total investment of $ 18.9 billion. These projects aim at resolving two major bottlenecks hindering economic development of Pakistan — lack of transportation infrastructure and energy shortage.
The statement claims most of the companies are responsible for their own profits and losses and repayment of loans and the Pakistani government does not repay these loans under CPEC.
However, this version is challenged by experts on grounds that the government is responsible for the loans for which it has given sovereign guarantee and the profits repatriated abroad even by private companies add to the volume of the current account deficit.
Amid myriad apprehensions surrounding CPEC, the Pakistani government hopes the industrial cooperation with China will help relocate Chinese industry to special economic zones (SEZs) where Pakistani labour can be employed to cut the cost of production. Currently, the cost of labour in China is two to three times higher than Pakistan so it seems a feasible option. But to make this happen, China will have to train Pakistani labour at vocational institutes etc which is the part of the socio-economic development plan under the CPEC.
While the modalities and scope of agricultural cooperation are being worked out, there is enough clarity on what is required to make Gwadar a gateway to CPEC. The Senate of Pakistan has taken up this issue and asked the government to take measures to preserve the demographic balance and ownership rights of local population of Gwadar. Stress is also on managing the expected large scale migration into Gwadar in the wake of CPEC projects. Vocational trainings of locals, provision of water and electricity, livelihood for displaced fishermen etc are the foremost demands regarding development of Gwadar.
While the worries about CPEC-related loan burden continue to haunt the economic managers of the country, they see hope in the form of increased exports in case Chinese industry is relocated to Pakistan. Besides, they hope foreign exchange inflows can increase if Pakistan can find export markets in China.

Nishat Group Chairman Mian Mohammad Mansha views CPEC as a good project for Pakistan and believes it should not be made controversial. “We can correct things amicably if there is a need to do so but we must not raise a hue and cry in the media. This sends a wrong message and creates confusion.”
He says a lot of apprehensions about CPEC are far-fetched. For example, he says, people are talking about Chinese loans but do not consider that assets are also being generated against them. The government is going to sell two power plants set up under CPEC and a number of parties have shown interest in buying them, he adds.