CPEC 3 myths unraveled by Dawn News Report

So the doubts that the current operation in Karachi is being driven at the whelm of China is turning out to be a reality as more and more information starts appearing on One Belt One Road (OBOR) policy . Karachi and its local inhabitants are no more than the victims of the expansionist plans of China’s policy. First let’s be clear that China which intends to spend US$ 150 Bn per annum on developing infrastructure on the southern countries mainly via Pakistan and Myanmar and to its west via Kyrgyzstan is seeking access through these countries shorter access to traditional routes to promote its local produce abroad . So one thing is clear that these routes or countries are extended versions of China’s industrial might as it runs out of natural resources as well as seek to reduce pollution levels in its own country whilst relocating its capacities elsewhere. The recent example published in the Economist is the Zhongda China Petroleum company operating in Kyrgyzstan which failed and operating at only 6% capacity due to lack of supply of crude oil. Whilst the project bombed but also did it severely damaged the local environment as complained by locals.

Dawn News a leading newspaper in Pakistan published a document encompassing the CPEC strategy in Pakistan and interestingly brings forth some facts which breaks some myths as has been marketed by the establishment of Pakistan. Yesterday , I heard Ahsan Iqbal a government minister especially on Shahzeb Khanzada suggesting that this is a Long term plan and is not an approved document. Well he clearly looked unconvincing . Why should I trust him and his government who lies at every moment? The more concerning thing is that if they have agreed to a CPEC deal without any long term plan at all. So this released document looks in its entirety reliable exposing the myths and the deceit that the government has been selling to people of Pakistan. Now before I divulge into the 3 main myths . I agree that every nation needs a God Father. Like Ahsan Iqbal gave examples of US being there for Japan and Korea and Russia for India. Lets not forget we have had many such God Fathers in the past like US and Saudi Arabia. But we know the results. These two didn’t plan to send One Million of their nationals on our soil. In this case its part of the deal. So lets break down these myths further:

Myth Number 1

CPEC is all about Gawadar –

The report says all but anything major about Gawadar. Its sparsely mentioned in the report strange isn’t it though we all in Pakistan thought that it’s all about access to this city. But the report only mentions Gawadar as an access to Afghanistan . Means looks like China intends to build a route via Afghanistan linking Gawadar either to Central Asia and I am sure it would be a Tax free route for them bearing no semblance for any revenue for Pakistan. Lastly, in the shown picture where all major cities have been identified as nodal cities including Kashgar . Gawadar is not shown as one as technically that’s where the nodes end and it should have been the terminating note. But interestingly the terminating node is Karachi.

I have mentioned this twice earlier in my blogs that Karachi is where China eyes its main game. If the plan is to get the shortest route why going Hub (north of Karachi) to Gawadar? Further the Economist article published recently on the May 4th 2017 has highlighted the concerns of China that Pakistan may play as a risk towards its investment due to Western interference . I am sure knowing the dynamics of Karachi where bulk of its population is Muhajirs not aligned to any major tribal or feudal system of Pakistan in the north and being secular in approach being a metropolitan city of more than 25 million people. China if it would like to terminate the node in Karachi would like the city to be cleared and controlled.

Knowing that Karachi mainly supports MQM and its leader in exile in London Mr. Altaf Hussein could be a pain point for China before it releases more funds into Pakistan. Hence the theory that current Karachi operation which started as Operation Zarb e Azb after massacre of 123 APS kids turned out to be more focused on Muhajirs and MQM in Karachi instead of the real enemy of Pakistan that is Taliban. So can we say that the APS attack was part of a bigger plan? Let’s leave it there for today.

Myth Number 2

Pakistan is going to get US$ 100 Bn plus FDI over next 5-10 years –

Confusing isn’t it if you read the same report as the same reports highlights that if more than US$ 2.0 Bn per annum is injected as Foreign Direct Investment in Pakistan would create adverse effects on the country’s economy. Infact the report mentions that a max of US$ 1.0 Bn should be injected annually whilst US$ 1.0 Bn annually as preferential loans and US$ 1.5 Bn as no preferential loans (means expensive money). Going by this logic even if we believe that China will invest US$ 50.0 Bn . Going by this reliable report at US$ 1 or 2 Bn per annum FDI if all was to be it would take what 25 or 50 years. So we have been lied all this time? And if let’s say it’s over 10 years and its capped at US$ 2.0 Bn per annum (which in itself will counter the report) that makes it US$ 20. Bn as FDI and the rest of the money say if initial investment outlay is US$ 52.0 Bn as claimed than US$ 32 Bn as loans and that too possibly more than half of it as non preferential.

In simple layman terms. Pakistan will be expected to participate in all these projects equally means the nation will be more indebted than we are currently. The myth that such a big investment is coming into Pakistan is a further lie as I have been saying. Bulk of which will come as loans soft and hard.

Lastly the report clearly says that Pakistan would have to partner in all of such projects and one recommended tool is raising money via sovereign bonds that is more loans on an already indebted country at approx. US$ 70.0 Bn or via country’s financing meaning minting more money meaning devaluation of Rupee further. This risk has been identified clearly and its adequate mitigation via Hong Kong has also been recommended.

So net net that all the money is coming as FDI is Myth number two exploded infact Pakistanis be ready to be indebted for US$ 100 Bn or more over 10 years of time. Means coming generations will bear the brunt for the needs of a few.

The question is that whether these loans and the cost of loans not ignoring the fact here we are dealing with Chinese on our territory are worth to expose our next generation to such amounts. Some say conveniently that many nations take loans to build infrastructure. Here in this case we are living in a nation known for its kickbacks in both Civilian and Defence contracts . How do I feel confident that after taking so much exposure on our future these monies will be spent on common Pakistanis and not pocketed by a few in and out of uniform. Some senior professionals are already saying that the key initial projects have already been sold to a few . Mostly linked to the biggest INC of Pakistan . The cream has started to get consumed. I don’t Pakistan to be indebted for China’s long term plans and to make corrupt richer than before. If you tell me this is all out of sincerity . Tell me when was the last time our civilian and military government was transparent with us ? No reports ever get published. No accountability at all. Why would this be different this time ?
Myth Number 3

CPEC investment will grow Pakistan’s industry and transport-

Surprise surprise. The main area of focus as intended by the report is Agriculture. The biggest bread winner for poor Pakistanis. The Chinese is eyeing the only stable income stream for Pakistan. So they claim that they will bring in technology and will develop steady supply chain to make our produce more efficient when it comes to Agriculture and Dairy farming. But the report sparsely mentions that local labor will be involved. Infact it does highlight that over labor supply of Kashgar would have new markets to explore.

The question has always been that with the Chinese issue of settling their own population their intentions to set up industries in Pakistan. Does it mean stable future for Pakistanis ? or ominous Joblessness as Chinese labor would be more technically qualified and efficient to outdo our local labor. I don’t see any program of transferring technology or know how to Pakistan. Mostly there is no mention of any exit plan at all which is more concerning. Looks like a long stay.

Interestingly , China eyes our unexplored Minerals in Baluchistan and KPK whilst Central zone comprising of some bordering areas of Punjab and KPK would see investments in appliances plants. Southern zone shows bulk of the interest and again I would say seems Karachi where set up of Petrochemical plants , Steel/Iron and Automotive industry is targeted not leaving the leisure part of the planned relaxation zones planned. We all know how Chinese relaxations zones start and end “Massage Parlors” . Hope our radical force is ready to handle the same. We saw how Red mosque issue started in Islamabad in Musharraf era. It was a Chinese massage parlor if I recall correctly.

The interest in Textile is restricted to raw material in terms of yarn and coarse cloth meaning no valued addition in Pakistan would definitely a disaster for the already challenged industry. Financial sector approvals like Banks, Insurance and Stock Market (mainly again in Karachi) just reinforces the theory that Karachi is the main targeted node or hub for Chinese not Gawadar as surprisingly is seen as a passing mention.

The most interesting part is the intended investment of infrastructure on media, telecommunication and security vide Cameras means one thing that China once invests in Pakistan wants to make to put an iron curtain on Pakistan knowing its track record on human rights and its disregard . In an already challenged situation in Pakistan towards human rights. This will just reinforce such forces in my opinion and nothing more.

Conclusion

Interestingly , as per the Economist article of May 4th , 2017. The planned sea route one road China is planning is via Myanmar so than what is Gawadar for ? just a question . Chinese already think that 80% of their investments they intend to do in Pakistan will be wasted . So than why invest? Just another question.

Being a Pakistani and Karachiite. I am worried that the establishment of feudal minded upper echelon of Pakistan has not sold Pakistan as looks so like East India Company a few centuries ago. See these rich and powerful will take their money and fly abroad. It’s our coming generation which will suffer where they may need to even face Chinese work force in addition to the current nepotism and racism in finding jobs in Pakistan already . I am sure after reading this you will at least once think over if CPEC is all good news or probably beginning of bad news. Like always . Pakistan Zindabad!

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