Magda Lipin*

All is not well with CPEC. Work on the multi-billion-dollar Chinese venture in Pakistan has slowed, if not stalled as it is set to enter the eighth year of its operations. 

Though both sides are unwilling to admit, an element of mutual mistrust is undermining the plan to build an economic corridor from Gwadar port on the Arabian coast to north-western Chinese province of Xinjinag.  China and Pakistan are contributing no less to the flip-side of BRI variant.

Lack of transparency and the Chinese tendency to shun locals have created resentment amongst the Pakistanis, who are expressing their ire through street protests and violence targeted at the Chinese.  

Pakistan is not helping its cause either with its inability to clear dues worth US $ 300 billion to Chinese companies engaged in CPEC power projects.

Since for China, money matters more than friendship, the Chinese power producers have shut down 1,980 megawatts of production capacity even as Pakistan is in the midst of a severe energy crisis.

When the cash strapped Shehbaz government will clear these dues and when will the work resumes are questions with no ready answers as of now. Much would depend on the fate of Pakistan’s request China to rollover commercial debt of US$ 6.3 billion.

Political turmoil rocking Pakistan and its economic distress are no less undermining the future of CPEC that has been on the drawing board for nearly five decades before a formal agreement was signed in 2014.  

Right from day one, there has been huge asymmetry between the Chinese willingness to invest and Pakistan’s ability to match the momentum and to deliver on its commitments.

Cricketer turned politician Imran Khan Niazi, literally pushed CPEC into the morgue during his four-year rule till this April, when his selectors, the Army paved the way for his exit and facilitated the emergence of a multi-party government with Shehbaz Sharif as Prime Minister.

But Sharif has no magic wand. Either to revive Pakistan economy or breathe life into CPEC.

China and its helmsman Xi Jinping are aware of Pakistan reality.  That is why no new CPEC projects were announced during Prime Minister Sharif’s Beijing visit in November. Both sides however discussed ways to accelerate the ventures that have been delayed. Well, such discussions are neither here nor there.   

Security remains the big bugbear of Bamboo capitalist, who imports idle hands from home to the work place. In fact not only in Pakistan but also across the globe, wherever China invested, Chinese enclaves have appeared as eye sore to the locals, who feel short changed whether it is Sri Lanka or Kenya or now Pakistan.

This growing resentment in Pakistan is finding expression in the attacks on the Chinese and the Chinese assets. The attacks are offering perfect cover to the Baloch nationalists to strike at will firstly to put the authorities on notice, and, secondly, to register their presence and their demands.

One such attack on Karachi’s Confucius Centre (26 April 2022), was led by a Baloch woman suicide bomber.  Three Chinese academics were killed in the attack.

Militants of other hues have targeted Chinese interests from Khunjerab Pass and Gilgit-Baltistan in the north to the tribal areas of Khyber Pakhtunkhwa and to Balochistan the home to deep water sea port at Gwadar on the Arabian Sea.  The Chinee have plans to set up a refinery amongst others at the port town. These Chinese plans have come to undermine fishing the mainstay of locals.

This aggravated the resentment already created by the denial of jobs in Chinese projects and also by the fear of damage to the pristine environment along the coast.  It made the people hit the streets and violently target the Chinese.  Also, the Chinese have got  embroiled in local political games politicians love to play with an on the ballot box. 

Though it may amount to slight digression it is essential to point out that agriculturally and industrially advanced Punjab province dominates the political theatre, and the all-powerful Army. This Punjabi dominance has not spared CPEC, and every passing day has been strengthening the impression that the Chinese venture’s benefits are tailor-made for the Punjab.

With other provinces particularly Baluchistan pushed to the margins, CPEC has come to be seen as “a Punjabi endeavour, rather than Pakistani.” 

Successive Pakistani governments have abandoned development and trade projects touted by their predecessors because they are perceived as “belonging” to the opposition.

Such shortsighted political pursuit has become the albatross of CPEC.

Imran Khan Government (2018 to April 2022) displayed such myopia in no small measure and halted many projects.

A wary China has sought to downplay mass protests at Gwadar, and growing concerns over the security of hundreds of Chinese personnel in and around Gwadar. There are reasons for China to feel aggrieved and pushed to a Gwadar corner.    

The protests in   Gwadar started in October, and showed no signs of abating with hundreds of children joining the movement, on its 18th day on 13 Nov, sedate Pak daily, Dawn reported and added   protesters are ‘threatening to block’ the CPEC projects ‘if their demands are not’. Ban on illegal trawling by the Chinese toped their demands list.

This ground reality made the Singapore Post to conclude (Nov 17, 2022) that deadlines under CPEC are unlikely to be met.

“China lacks ‘complete’ trust in Pakistan”, the daily noted, and added that the terrorist attacks (on Chinese nationals) have angered the Chinese leadership.  

On its part, Pakistan continues to view China as an “all-weather ally” but China now uses this term sparingly. 

Pakistan has raised a full army Division (15,000 manpower) besides para-military forces, to put in place an elaborate security cover for the Dragonites. It has also provided bullet-proof vehicles for outdoor travels by Chinese workers. 

Islamabad expected a pat on its back but Beijing conveyed its displeasure still, diplomatic sources aver.

Besides security concerns, a couple of other factors also appear to be at work in bringing to a virtual halt the CEPC ventures particularly the power projects.   

Pakistan was expected to build nine Special Economic Zones across the country along the Economic Corridor. These have not yet materialized.

In frustration, Chinese companies focused on SEZs have started shifting to nations, where they could function seamlessly. COVID-19 pandemic, political and policy instability and non-ease of doing business are also blamed for the CPEC blues.

Yet another reason, which no body is willing to talk on record, is Pakistan’s decision to scrap the Authority set up in 2019 to run CPEC affairs.

Beijing was kept on board the decision but it is still miffled by the fact that the authority ended up as a  den of corruption.  A retired Army General ran the show but he had failed to deliver, and he had to be shown the door.

The question before the Chinese was simple. And it is reflected in their dealings with the Pakistani authorities. 

If a top general of the Pak Army, which is all-powerful, stands accused of mismanagement and corruption in running a key bilateral venture, whom the Chinese should trust?

This is a legitimate question with no straight answers either from the Shehbaz government or from the Army Shura (governing council comprising the corps commanders).  

The scrapping of the CPEC authority may not lead to scrapping CPEC itself but it will have its repercussions in the CEPC like ventures the Chinese are running under the aegis of President Xi’s flagship programme, Belt and Road Initiative, BRI, elsewhere in the world. (POREG)   

—* The writer, a Boston-based consultant is a regular Poreg contributor