The Chinese have chosen a new moniker for the Pakistan-China relationship in recent days; “Iron Brothers”. Perhaps this represents, amongst the symbolic show of strength, the nature of their recent ventures. As the details of exactly what the much touted terms of “$45.6 billion dollars worth of investment” contains, a clearer picture emerges, but not an entirely pleasant one. For the most part it seems to a be a milestone project; the Pakistan China Economic Corridor (CPEC) contains $38.8 Billion worth of energy projects, and $11.8 Billion worth of infrastructure projects, all to be completed within the next six years. The energy projects, some of them which become operational in 2017, will be a vital slave to the country’s crippling energy crisis. The infrastructure mainly consists of a road, and later railway, to link the western Chinese city of Kashgar to Gawadar. The government itself has initiated a number of projects in tandem with, this to widen the infrastructure net, such as the Karachi-Lahore motorway. The New Silk Road project is part of the larger Chinese ambition of linking China to Gawadar through Pakistan, Berlin through Russia, and Paris through Iran. The development of Gawadar port into a free trade zone, the building of an interconnected trade route, the reduction of electricity shortage, and the resulting movement of persons and goods will open many avenues for economic prosperity in a sagging economy.
Yet like the Chinese ghost cites, full of uninhabited residential towers, something off-putting lurks behind the facade. The projects that these Chinese companies are making will be operated as commercial enterprises. Through this they plan to repay the massive loans the Chinese banks have given them. In companies which are designed to generate as much money as possible, what sort of price model can we expect? We can’t expect rates that a state run energy project will offer us. Will these projects end up holding the economy under duress? The lessons of small, desperate economies dealing with large companies, such as Enron and British Petroleum must be kept in mind. http://nation.com.pk/editorials/23-Nov-2014/iron-brothers
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