Tenth anniversary of CPEC

Tenth Anniversary of CPEC – CPEC has reached its decade of existence amidst plenty of ups and downs though such fluctuations were not expected either by Pakistan or China. Despite tremendous hoopla orchestrated by policy makers of both the protagonists the fact that CPEC essentially was a tremendously risk-prone exercise and it would have been very surprising if it proved smooth sailing. It was obvious that the activity of this size would encounter multiple difficulties both from perceptional and practical angles and this is precisely what happened. It is generally analysed that it was the dissension within the policy makers of Pakistan that lit the powder keg of opposition to CPEC that distorted the contours of this large project. Once the signs of dissatisfaction emerged, many external factors also joined hands and complicated the issue, and at times it appeared that it may be very cumbersome to retrieve this carefully planned endeavour. It soon appeared that geostrategic considerations weighed heavy in this respect and it was feared that CPEC may ultimately be shelved.
CPEC was essentially the offshoot of the extension of Chinese soft power after it achieved spectacular economic growth providing it with tremendous opportunity to do so. In the context of Pakistan even before CPEC China was one of the biggest sources of investment and loans along with a reliable trading partner. It is well known that over a period of last ten years China repeatedly came to the rescue of Pakistan providing financial assistance of 30 billion yuans that kept its economy steady by easing pressure on its weakening repayment capacity aimed at reducing its dependence on dollars for trade to protect its reserves of foreign exchange. Chinese crucial assistance for Pakistan warded off the ever-present specter of a sovereign default and this help is acknowledged by the highest policy makers of the country.
After the commencement of CPEC Pakistan is reported to have so far received $25.4 billion in direct Chinese investment in various transport and energy schemes aimed at overhauling Pakistan’s dilapidated infrastructure and providing it with modern facilities required to upgrade its economic performance and increase its productivity levels. As CPEC is part of the wider One Belt One Road initiative of the Chinese government, it is projected that it may get access to more than the initial projected investment undertaken by China. This possibility opens up the vast prospects of upgrading Pakistan railways and communication networks and brings them to international standards. It is widely acknowledged also that with the current practices followed by Pakistani agriculture it may well be next to impossible to maintain autarky particularly in wake of the inclement weather conditions faced by the country that already have caused widespread devastation.
The problems that countered CPEC have caused serious rupture in the process as its opacity has been resented by the business circles of Pakistan. It has been observed that contracts were awarded to Chinese firms without following the due process of competition with very liberal tax incentives given to them. It was also pointed out that the high returns guaranteed for power generation projects under CPEC harmed the cause of Pakistani consumer in the long run and make energy almost unaffordable. The fears expressed by foreign economic analysts supported by their governments portray that CPEC may turn out to be a debt trap for Pakistan that is already finding it difficult to pay its foreign debt. Though many issues have been addressed both by China and Pakistan yet the lack of transparency has played a crucial role in undermining CPEC particularly when Pakistan does not have a regimented system like that of China with vibrant Pakistani media taking strong note of the very nature of the arbitrary practices followed in this respect.
It was essentially lack of transparency that seriously impeded CPEC and made it difficult to witness greater bilateral cooperation in the industrial and agricultural sectors that were mandated to have been achieved during the second phase of the project. The completion of a decade of the project calls for re-evaluating the prevailing situation with a view to iron out the difficulties. While Pakistani side is required to exhaustively view the prevailing backwardness it suffers in agricultural and industrial sectors, the Chinese are also expected to bring in appropriate transparency in the practices they have employed in respect of CPEC. Pakistan is in urgent need of boosting its productivity levels so that its exports bridge the gap between imports and trade balance is achieved. It is also important that Pakistan is provided an opportunity by the Chinese to reduce the trade deficit of around $20 billion with China that is proving to be a serious economic handicap. In this context the special economic zones are required to be quickly activated so that Chinese firms can relocate their manufacturing facilities in Pakistan for export back home and elsewhere in the world. Pakistan also urgently needs Chinese assistance in improving its agricultural and industry output so that the country can reduce fast-spreading poverty and creates further opportunities for export. The Weekender