Dr Sudershan Kumar
Trading and human communications has been happening since prehistoric times. Central Asia had been the economic centre in the middle ages. Meanwhile long distance trade even felicitated exchange of religious, cultural and ethnic values between the various civilizations of Europe and Asia since antiquity making Eurasia crisscrossed by the various communication paths of traders linked across land and sea. The East and West parts of the world were linked via sea for trading between the various countries. The famous “SILK ROUTE” from the chapters of ancient history exemplifies the trade system of the past which connected China with the Mediterranean region. People’s Republic of China got independence on 1 October,1949. Since then, the South China sea route has been used by the Chinese companies for trading with the Middle East, Europe and South African countries.
This route encompasses South China sea, the Strait of Malacca, Indian ocean, Arabian sea and finally the Strait of Hormuz, the gate way for middle east. Moreover, China has also been importing oil to meet its energy requirements from the Middle East countries. Travelling a distance of 12000 kilometers from East China ports to Europe and another 3500 kilometers by road from East China ports to Kashgar city of West China, takes roughly around 45 days. Under the communist government , various reforms were commenced endorsing China’s vision to become an economic super power through the role as the manufacturing hub of the world. Around 20% of world’s total production is accounted by China’s manufacturing. At the same time, the leadership of communist party of China (CPC) led by President XiJinping, realizes that the economic road ahead is far from smooth. So in a bid to have a further economic turnaround, China has formulated a series of preferential market oriented policies to ensure its continuity as the front runner in the field of manufacturing. Hence a step further in this is the alternate trade route through middle east countries to Africa and Europe. Therefore, the road link from Kashgar(Xingiana province of China) to Gwadar port as the connectivity portal has become indispensable for them. This road link starts from Kashgar passing through Gilgit Baltistan(illegally occupied by Pakistan), through whole of Pakistan and terminates at Gwadar port in Balochistan. This route not only reduces the travel time, but also the distance by 5000 kilometers. Keeping in terms with the long term vision of becoming world’s economic super power, China has signed a mega project with Pakistan commonly known as China “Pakistan Economic Corridor” (CPEC) on 20th April 2015. CPEC is a clutch of projects initially valued at 44 billion US $ and later enhanced to 54 billion US $. Under this umbrella, 51 projects have been signed, out of which many of them are on a fast track. The main thrust areas are construction of rail road network, establishment of infrastructure, energy sector for power generation and up gradation of industries etc.
Besides, these projects also include space research, solar energy, innovation parks and many more. Therefore CPEC is an extension of economic corridor that envisages the linking of the warm waters with West China and evidently East China also. CPEC also includes up gradation along the route, in terms of setting up of power plants, water treatment plants, creation of dry ports hospitals and other estate properties for their use.Besides China has also initiated grand mega program “one road one Belt” (OROB). In this program China has invited all other countries for participation. Total cost of this Mega program will be around 4 trillion US $. CPEC being one part of this. The funding of CPEC projects is mainly from Chinese banks, Asian development banks and consortium of private industries. The funding to Pakistan will be in the form of soft loans with interest rates varying from 2% to 1.6% and in some cases even zero percent.
But surprisingly, in CPEC, the whole process is opaque. Even the electronic and print media of Pakistan has raised concerns about transparency, accountability secrecy and mode of execution and its ramifications. Although some sections of the people in Pakistan are claiming that CPEC is a game changer for Pakistan, but as on date, the ground realities do not commensurate to their views.
Firstly, skepticism is running as to what extent the Chinese companies will involve their Pakistani counterparts during execution of the projects and up to what level will they part with technology and its intellectual property rights(IPR). This aspect is very crucial for up gradation and maintenance of systems in the long run. It is a general practice at international levels for foreign companies during various interactions not to transfer their technology to other countries keeping in view their business interests .Therefore recurring cost increases many fold as compared to original cost .
Secondly, the funding of this program is largely through Chinese banks and contracts will be executed by Chinese companies by employing Chinese workers while Pakistani security agencies will provide protection. If the interests of Pakistani industries are not protected while signing the contracts, then the flood gates of Pakistan will be opened to Chinese industry, and in just a matter of time the Chinese goods will do the Wal-Mart effect on Pakistani industry. Hence the biggest challenge for Pakistani authorities is to evolve a mechanism to sustain Pakistani industry and to muster strategic technologies from superior Giant(China)during negotiations.
Thirdly, it is pertinent to mention here that Gwadar port of Pakistan will be tax free making thePakistani authorities unable to levy any tax on Chinese goods/materials imported/exported through this port further strengthening the doubts about the supposed benefits accruing to Pakistan. Therefore alternative source of of revenue generation for back payment of loans has to explored.
Fourthly, though it is true that Pakistan will get rail road net work; infrastructure, electricity for industry and many other things besides the generation of employment for locals, various problems are bound to surface between Pakistan and China looking at the bad track record of China in the past in fulfilling its commitment in investment policies. If the above stated concerns are not adequately addressed then all these will accumulate to a much exorbitant cost further imposing strains on Pakistan’s economy. Thus the 46 billion US $ loan which has been taken from China as per their terms and conditions will result in to mortgaging economic sovereignty of Pakistan to China. This will also put military sovereignty of the vulnerable Pakistan to risk. China has already moved two of their naval ships to Gwadar port for protection of their assets . This may result in to a situation similar to that of erstwhile East India company reflecting the neo-imperialistic ventures of China too.
On the contrary, China will come out as the major beneficiary economically by getting cheap labour, good business, and free access via short route to Middle East, Africa and Europe for export/import of their goods/materials. This will be a major step towards rejuvenation of the economy and a step forward for their vision to become world economic leaders.
Based on the above facts it is too early for the people Pakistan to claim that CPEC will be a game changer for Pakistan .Only time and circumstances will spill the beans.
feedbackexcelsior@gmail.com
Follow our WhatsApp channel