By Waqar Gillani in TNS, Nov 1, 2020
The author is a staff reporter.
The China Pakistan Economic Corridor (CPEC) – a mammoth joint venture between the two neighbours – has been facing delays and criticism, both from within and without, since its launch. Several countries including the US have been urging Pakistan to not rely on Chinese loans. At home, the government and the opposition have been trading allegations about delays, alleged corruption in CPEC projects and concerns that some of the contracts for the projects may have been more beneficial for the Chinese partners than for the Pakistani stakeholders.
The CPEC, according to the official view, is a “framework of regional connectivity that will not only benefit China and Pakistan but (in future) will have positive impact on Iran, Afghanistan, India, Central Asian Republics, and the region”. The CPEC, officially, is considered a significant “journey towards economic regionalization in a globalised world and a “hope of… peace, development and growth of economy.” The CPEC, with an overall portfolio of over $60 billion, started with the economic corridor and development of Gwadar Port in the province of Balochistan. Over the years, it has expanded to include transport, communication and infrastructure projects in Pakistan with a focus on socio-economic development, agriculture sector improvement and human resource development.
Under the Pakistan Tehreek-i-Insaf government, the pace of the project seems to have slowed down, particularly after Pakistan entered an arrangement with the International Monitory Fund (IMF). There was pressure from international donors for Pakistan to disclose details of the Chinese loans. Some leaders in the new (PTI) regime also alleged ambiguity in the agreements. Others accused the PML-N leaders of corruption and promised a thorough audit. This raised alarm in China so that the army chief was forced to visit China to address certain concerns. Currently, the CPEC Authority, an organisation created by the incumbent government, has become legally dysfunctional after the ordinance under which it was created lapsed.
“We don’t see significant and solid progress on CPEC yet, except in statements. Concrete work on the main projects is yet to be seen. The situation in Gwadar remains the same,” economist Dr Kaiser Bengali says. “The pace, especially, slowed after Pakistan entered the IMF agreement. It is the US influence and the IMF programme that have pressed Pakistan to keep CPEC progress slow. The Finance Ministry and the State Bank are being run directly by IMF men.”
Overall, Dr Bengali says, CPEC might not bring Pakistan any significant benefits. “Because of bad negotiations and bargains, the CPEC will mostly benefit China. Gwadar Port has been handed over to China for 40 years. Pakistan will get only nine percent of the financial benefits. The security of the CPEC corridor is also Pakistan’s responsibility,” he says. “Pakistan failed to bargain well with China despite the fact that the latter needed it more. Pakistan has also guaranteed rates of return for many projects under the CPEC.” Dr Bengali says there is no clarity about who will collect the toll on the CPEC roads and how the provincial governments will benefit from this. He urges the federal government to do more for provinces’ development and shares in the CPEC.
The Punjab chief minister, last week, inaugurated Pakistan’s first-ever metro train service, the Orange Line – an early harvest project under the CPEC. The Orange Line has been constructed by China State Railway Group Company Limited and China North Industries Corporation and operated by Guangzhou Metro Group, Norinco International and Daewoo Pakistan Express Bus Service. At the inauguration Chief Minister Usman Buzdar was joined by the Chinese counsel general in Lahore. However, the ceremony was very low-profile. The project has been completed in six years at a cost of over $2.2 billion.
“There have been problems since the beginning of the PTI government. The new government did not take political ownership of the CPEC the way Pakistan Muslim League-Nawaz government had done in the past. The PTI, initially, talked only about loopholes and moneymaking (allegedly by PML-N) in CPEC projects. (The allegations remain unsubstantiated). Also, for a while there was no comprehension by the PTI government of the strategic significance of the CPEC for Pakistan’s future. Hardly anyone at the top level of government had an understanding or interaction about China,” says Senator Mushahid Hussain Syed, who runs the Pakistani China Institute, a policy think-tank. “Ultimately, Chief of Army Staff Gen Qamar Javed Bajwa had to intervene and do fence-mending by going to China and give assurances to the Chinese government that the CPEC is of paramount importance for Pakistan and not linked to a single party or government but has across-the-board national ownership. The PML-N regime had focused fully on the CPEC and pushed for timely completion of Early Harvest Projects linked primarily to energy and infrastructure.”
“It seems that there is a lobby trying to pressure Pakistan into delaying CPEC projects under US/IMF influence. However, in the past few months, we have seen good progress on some CPEC projects including the ML-1 Railways Project. Two more projects will also be completed in AJK and Gilgit-Baltistan at a cost of nearly $12 billion. Next month, a JCC meeting is scheduled to take up these projects. (It is the apex body on CPEC and discusses future projects.) So, we can say that the CPEC is finally back on track and we will see more progress over the coming months, more so, with the arrival of the new Chinese Ambassador, Nong Rong, who has a strong economic background.”
He says recent statements/interviews by Prime Minister Imran Khan, calling the CPEC as crucial and vital for Pakistan and linking the economic future of Pakistan to China, are welcome since they have helped clear the situation. “The CPEC, in fact, has given a new lease of life to Balochistan aiming to make it prosper and urging people to get maximum benefit of this developed port. Thanks to the CPEC, Gwadar Port, which was once a dream, is a living reality, benefiting the province, Pakistan and the region.”
In recent interviews, Prime Minister Imran Khan has highlighted Pakistan-China bilateral strategic partnership and said “The CPEC offers a huge opportunity to lift the socio-economic status of Pakistan” and “Pakistan will complete it at all costs.”
The CPEC Authority is meanwhile facing criticism on account of a newly-proposed draft law that gives provides immunity to its chairman and makes it unaccountable in some ways. This proposal has alarmed opposition parties and other stakeholders after allegations surfaced against the assets of first chairman of the CPEC authority, Lt Gen (retired) Asim Saleem Bajwa. Besides heading the CPEC, Bajwa, was also appointed a special assistant to prime minister. He has now resigned as SAPM but chosen to continue to serve as the CPEC Authority chairman. He denies all the allegations and terms them as baseless. This has given space to opposition parties to question the government’s commitment to across the board accountability. The federal government has since denied that immunity is proposed for CPEC officials. The clause in question, it says, was also a part of the CPEC Authority Ordinance promulgated in October 2019 and is not a new insertion. The legality of CPEC Authority was also called into question in the Senate a few days ago. Opposition parties claimed that the government does not appear serious about carrying forward the CPEC project. Many experts have sided with the opposition parties in saying that such big projects cannot be left without accountability and transparency mechanisms. Others have said that there is no need of the authority and the Planning and Development Ministry should directly run it.
Senator Syed says there has also been confusion in this government regarding the CPEC Authority. “Its legality has become dubious, after the ordinance lapsed. There is now a legal vacuum.
“The appointment of its chairman, a retired army general who is facing certain allegations, has also made it controversial. There is no need for such an authority and no person should be given indemnity in this way,” Dr Bengali says.https://www.thenews.com.pk/tns/detail/736556-the-long-winding-road-to-cpec
The long, winding road to CPEC- Has the PTI government put CPEC projects on the back-burner?
By Waqar Gillani in TNS, Nov 1, 2020
The author is a staff reporter.
The China Pakistan Economic Corridor (CPEC) – a mammoth joint venture between the two neighbours – has been facing delays and criticism, both from within and without, since its launch. Several countries including the US have been urging Pakistan to not rely on Chinese loans. At home, the government and the opposition have been trading allegations about delays, alleged corruption in CPEC projects and concerns that some of the contracts for the projects may have been more beneficial for the Chinese partners than for the Pakistani stakeholders.
The CPEC, according to the official view, is a “framework of regional connectivity that will not only benefit China and Pakistan but (in future) will have positive impact on Iran, Afghanistan, India, Central Asian Republics, and the region”. The CPEC, officially, is considered a significant “journey towards economic regionalization in a globalised world and a “hope of… peace, development and growth of economy.” The CPEC, with an overall portfolio of over $60 billion, started with the economic corridor and development of Gwadar Port in the province of Balochistan. Over the years, it has expanded to include transport, communication and infrastructure projects in Pakistan with a focus on socio-economic development, agriculture sector improvement and human resource development.
Under the Pakistan Tehreek-i-Insaf government, the pace of the project seems to have slowed down, particularly after Pakistan entered an arrangement with the International Monitory Fund (IMF). There was pressure from international donors for Pakistan to disclose details of the Chinese loans. Some leaders in the new (PTI) regime also alleged ambiguity in the agreements. Others accused the PML-N leaders of corruption and promised a thorough audit. This raised alarm in China so that the army chief was forced to visit China to address certain concerns. Currently, the CPEC Authority, an organisation created by the incumbent government, has become legally dysfunctional after the ordinance under which it was created lapsed.
“We don’t see significant and solid progress on CPEC yet, except in statements. Concrete work on the main projects is yet to be seen. The situation in Gwadar remains the same,” economist Dr Kaiser Bengali says. “The pace, especially, slowed after Pakistan entered the IMF agreement. It is the US influence and the IMF programme that have pressed Pakistan to keep CPEC progress slow. The Finance Ministry and the State Bank are being run directly by IMF men.”
Overall, Dr Bengali says, CPEC might not bring Pakistan any significant benefits. “Because of bad negotiations and bargains, the CPEC will mostly benefit China. Gwadar Port has been handed over to China for 40 years. Pakistan will get only nine percent of the financial benefits. The security of the CPEC corridor is also Pakistan’s responsibility,” he says. “Pakistan failed to bargain well with China despite the fact that the latter needed it more. Pakistan has also guaranteed rates of return for many projects under the CPEC.” Dr Bengali says there is no clarity about who will collect the toll on the CPEC roads and how the provincial governments will benefit from this. He urges the federal government to do more for provinces’ development and shares in the CPEC.
The Punjab chief minister, last week, inaugurated Pakistan’s first-ever metro train service, the Orange Line – an early harvest project under the CPEC. The Orange Line has been constructed by China State Railway Group Company Limited and China North Industries Corporation and operated by Guangzhou Metro Group, Norinco International and Daewoo Pakistan Express Bus Service. At the inauguration Chief Minister Usman Buzdar was joined by the Chinese counsel general in Lahore. However, the ceremony was very low-profile. The project has been completed in six years at a cost of over $2.2 billion.
“There have been problems since the beginning of the PTI government. The new government did not take political ownership of the CPEC the way Pakistan Muslim League-Nawaz government had done in the past. The PTI, initially, talked only about loopholes and moneymaking (allegedly by PML-N) in CPEC projects. (The allegations remain unsubstantiated). Also, for a while there was no comprehension by the PTI government of the strategic significance of the CPEC for Pakistan’s future. Hardly anyone at the top level of government had an understanding or interaction about China,” says Senator Mushahid Hussain Syed, who runs the Pakistani China Institute, a policy think-tank. “Ultimately, Chief of Army Staff Gen Qamar Javed Bajwa had to intervene and do fence-mending by going to China and give assurances to the Chinese government that the CPEC is of paramount importance for Pakistan and not linked to a single party or government but has across-the-board national ownership. The PML-N regime had focused fully on the CPEC and pushed for timely completion of Early Harvest Projects linked primarily to energy and infrastructure.”
“It seems that there is a lobby trying to pressure Pakistan into delaying CPEC projects under US/IMF influence. However, in the past few months, we have seen good progress on some CPEC projects including the ML-1 Railways Project. Two more projects will also be completed in AJK and Gilgit-Baltistan at a cost of nearly $12 billion. Next month, a JCC meeting is scheduled to take up these projects. (It is the apex body on CPEC and discusses future projects.) So, we can say that the CPEC is finally back on track and we will see more progress over the coming months, more so, with the arrival of the new Chinese Ambassador, Nong Rong, who has a strong economic background.”
He says recent statements/interviews by Prime Minister Imran Khan, calling the CPEC as crucial and vital for Pakistan and linking the economic future of Pakistan to China, are welcome since they have helped clear the situation. “The CPEC, in fact, has given a new lease of life to Balochistan aiming to make it prosper and urging people to get maximum benefit of this developed port. Thanks to the CPEC, Gwadar Port, which was once a dream, is a living reality, benefiting the province, Pakistan and the region.”
In recent interviews, Prime Minister Imran Khan has highlighted Pakistan-China bilateral strategic partnership and said “The CPEC offers a huge opportunity to lift the socio-economic status of Pakistan” and “Pakistan will complete it at all costs.”
The CPEC Authority is meanwhile facing criticism on account of a newly-proposed draft law that gives provides immunity to its chairman and makes it unaccountable in some ways. This proposal has alarmed opposition parties and other stakeholders after allegations surfaced against the assets of first chairman of the CPEC authority, Lt Gen (retired) Asim Saleem Bajwa. Besides heading the CPEC, Bajwa, was also appointed a special assistant to prime minister. He has now resigned as SAPM but chosen to continue to serve as the CPEC Authority chairman. He denies all the allegations and terms them as baseless. This has given space to opposition parties to question the government’s commitment to across the board accountability. The federal government has since denied that immunity is proposed for CPEC officials. The clause in question, it says, was also a part of the CPEC Authority Ordinance promulgated in October 2019 and is not a new insertion. The legality of CPEC Authority was also called into question in the Senate a few days ago. Opposition parties claimed that the government does not appear serious about carrying forward the CPEC project. Many experts have sided with the opposition parties in saying that such big projects cannot be left without accountability and transparency mechanisms. Others have said that there is no need of the authority and the Planning and Development Ministry should directly run it.
Senator Syed says there has also been confusion in this government regarding the CPEC Authority. “Its legality has become dubious, after the ordinance lapsed. There is now a legal vacuum.
“The appointment of its chairman, a retired army general who is facing certain allegations, has also made it controversial. There is no need for such an authority and no person should be given indemnity in this way,” Dr Bengali says.https://www.thenews.com.pk/tns/detail/736556-the-long-winding-road-to-cpec
Published in Pak Media comment