Last week, the uneasy Pakistani government received a much-needed vote of confidence at a crucial time from perhaps its only-remaining ally, regional or otherwise. At a time when US money has already stopped flowing owing to inconsistent loyalties and when our self-styled brethren in the Middle East and the Gulf are wielding fiery sticks instead of oily carrots, the Chinese have decided to step in and mark their territory by unveiling bilateral investment projects worth a reported $ 46 billion in the energy and infrastructure sectors of the Pakistani economy.
Now, $ 46 billion is a lot of money — too much in fact — especially when seen through the prism of previous investments by other countries looking to create a stronghold in the region. Always needing more, Pakistan has had to frolic with friends and foes alike in its quest to stay afloat. But such is the might of this new Chinese deal that experts are dubbing it as Pakistan’s Marshall Plan, owing to the magnitude of the money and ambition involved, similar to the influx of US money into western Europe post-World War II. If one is to borrow a term from our very own political history, the few pesky billions that have been handed out to Pakistan over the past decades by other countries seem like “peanuts” when compared to the sum total under these new investments.
In the coming years, details of the actual deals will start to emerge but it seems like the next 30-odd years’ worth of development in Pakistan has been handed over to Beijing. Two things separate this mighty investment package from previous aid of the past though. Firstly, the money to be received in lieu of the bilateral agreements is neither foreign aid nor is it a soft loan. Instead, as astute observers have spotted already, it is project financing on commercial terms that will seek to increase the presence of Chinese entrepreneurial activity in Pakistan. On paper, Pakistan will be given billions after billions of dollars to execute multiple projects but, in reality, all such money will go to Chinese firms that will then execute the projects on Pakistani soil.
Perhaps the Chinese are wary of the increasing frequency with which foreign investments in Pakistan vanish into thin air and have decided to not rely on the weak-willed to manage such huge sums. However, our lack of managerial prowess notwithstanding, it will be interesting to see how these new investments fit into the larger development picture in Pakistan. A cursory glance at the history of economic development in Pakistan can provide instructive insights at this point. As a rule of thumb, development in Pakistan has been a story of zero sum games between the haves and have-nots. Growth in one sector of the economy has not translated to prosperity in corresponding socio-economic avenues. In the 1960s, under Ayub Khan’s leadership, the country did produce double digit growth figures in key industries but also led to debilitating asymmetries in the distribution of wealth.
In response, Bhutto’s nationalisation in the 1970s produced some equalisation effects but at the cost of overall inefficiencies in total output and productivity. Zia’s regime continued with Bhutto’s policies more or less until foreign aid worth billions started pouring in for the Afghanistan adventure. The lack of transparency and accountability during that time introduced Pakistan to the double-edged sword of International Monetary Fund (IMF) support programmes for the first time in the nation’s history and we have been unable to bounce back ever since. Seen in this context, the Chinese investments might achieve very little in terms of overall prosperity. It is true that there will be discernible improvements in the country’s infrastructure and energy sector but how much of that will trickle down to the common man is a question only time will answer.
The other way in which the Chinese differ from other countries in doling out exorbitant sums is even more instructive, given the horrendous state of affairs as regards to civil liberties nowadays. In the absence of critical stipulations such as improvement in human rights and increasing access to the disadvantaged — as is the case with the oft-maligned ‘western’ aid — these new investments have little room for involvement and dialogue as is evident through the opaque ways in which the deals have been finalised, and will only help to further the interests of the elite in power, thereby cementing the status quo in which the needs of the few always outweigh the needs of the many.
Given China’s unenviable record in terms of hostile citizen treatment and human rights abuses, the lack of focus on fostering pluralism in the investment packages is not completely unexpected. However, seeing how aid from other countries has always brought with itself the malaise that festers in foreign lands, the real fear is that the relaxed way in which state censorship is practiced to silent any and all dissent in the echelons of Chinese power might find a homely abode in the weak institutional structures of the Islamic Republic as well.
Furthermore, concerns abound over the distribution of gains achieved given the power imbalances on a provincial level in Pakistan. A significant portion of the economic corridor is bound to pass through the physical and psychological no-go area of Balochistan. If the ruthless way with which this topic has been handled so far is any indication, even more testing times are in store for us.
As a Pakistani, there are legitimate reasons to be happy about the prospect of improvement in quality of life but we must understand the cost benefit analysis associated with such changes. The frenzy with which the Chinese investments have been hailed as a “gamechanger” has to be analysed with doses of realistic caution. If the worth of $ 46 billion is going to be realised only in terms of inequality and limitations on liberty, then we really need to ask ourselves if such growth is desirable at all.
The author is a freelance columnist with degrees in political science and international relations