Daily Times

Allow me to start with an extract as we take a walk back in time:

“In June 1635, the Spanish barbers (that is, blood letters) of Mexico City protested to the victory about the presence of Chinese barbers there. The viceroy referred the matter to the city council, which in its turn recommended to the viceroy to limit the number of Asian barbershops to twelve, and that they be restricted to the suburbs, as was the practice with foreign merchants in Spain. Exactly what the viceroy decided is not known.

“Less than a generation later, in 1654, twenty-three Portuguese-speaking Dutch Jews arrived in New Amsterdam — supposedly the first of their religion to come to North America. The Dutch governor of the city, Peter Stuyvesant, tried to deport them, but his bosses — in the West India Company, not in the Dutch government — allowed them to stay. The Company’s decision carried restrictions: the Jews could not engage in business on their own, and ‘The poor among them should not become a burden to the Company or the community but be supported by their own nation.’

“Nearly three centuries later, in 1931, an eleven-year-old Australian boy took an afternoon walk along sand dunes near the beach about sixty miles north of Perth. He came across forty silver Spanish coins dating to the same era as the Chinese barbers and Dutch-Portuguese Jewish immigrants.”

These paragraphs are from William J Bernstein’s fantastic book, A Splendid Exchange: How Trade Shaped the World. Not only does it thoroughly explore how these voyages of discovery shaped the expansion of the world economy — its relevance today cannot be underestimated. Not least because it very clearly shows us that free trade within the globalisation context was never fully embraced from the start.

Fast-forward to the 21st century and it is the Chinese who are once more centre stage. The launch of the China-Pakistan Economic Corridor (CPEC) has been somewhat of a mixed bag in terms of the welcome it has received among the ordinary citizenry here.

It will not be too long before we see the areas surrounding Gwadar dotted with shopping malls and healthcare facilities. Such projects boost local employment and salaried workers become consumers. Thus disposable income is injected into the national economy, thereby increasing GDP

There have been murmured grumblings about the so-called Chinese invasion combined with the fear that Pakistan will end up a colonised province; to be ruled over by Beijing. And then there is speculation that this $60 billion-worth of foreign direct investment represents a liability — a veritable albatross hanging around this country’s neck — as opposed to a means to revive our flagging economy. Whatever the case may be, it is safe to say that resistance exits. And that this is borne of fear and insecurity. Indeed, notions of foreign competition and foreigners themselves have long stirred up such feelings; literally dating back centuries.

Today, this tension may be framed as pitting the proponents of globalisation and free trade on the one side and opposing forces, namely the protectionists, on the other. To be sure, this is not a new conflict. But given that it is still simmering — it may well still be worthwhile to revisit the arguments that prevail on both sides of the divide.

To those who fear that CPEC poses a direct threat to local industry here in Pakistan, I would urge them to look at the pluses; and they will easily see that these win the day. Provided, of course, that we don’t ignore the need for structural changes to the system. Nevertheless, let us take, for example, the simple case of abandoned land falling anywhere within the CPEC project route.

As time goes by and different development ventures eventuate — a factory, say, springs up — it will not be too long before auxiliary businesses begin to emerge. From barbers shops to convenience stores. For those who toil inside the factory themselves represent a small consumer market. The same will be replicated on a much larger scale when it comes to the housing societies being built in the environs of Gwadar Port.

Meaning it will not be too long before we see these areas dotted with shopping malls, grocery stores, entertainment centres and healthcare facilities. In short, such projects boost local employment and salaried workers become consumers. In other words, disposable income will be injected into the national economy, thereby increasing Pakistan’s overall Gross Domestic Product (GDP).

Then there is the added soft power bonus that CPEC affords us. Indeed, international media is beginning to report about how a slowing down of terror-related incidents here in this country has awoken the tourism industry from its deep slumber. Thus imagine how the latter will roar once the Corridor is in full swing.

Yet when all is said and done — does Pakistan even have a choice in any of this? Meaning, are we in a position whereby we can pick and choose over such mega investment ventures?

For however special a friendship may be, when it comes to the world of bilateral relations it still comes down to one thing and one thing alone: vested interests. China is in the process of shaking up the established world order. Towards this end, therefore, among its priorities is developing long-lasting and profitable ties with the region of Eurasia.

CPEC is but one slice of the ambitious One Belt, One Road (OBOR) pie. And Pakistan needs to keep in mind its crucial role as a strategic ally to help Beijing counter Indian influence in the region, especially in Afghanistan. In addition, traditional Chinese maritime routes from the eastern ports down to the Straits of Malacca and then on to the Indian Ocean are home to many a US vessel Thus Beijing is relying on CPEC to offset its dependency upon a single trade route and the costs associated with that.

And as China seeks to displace American hegemony from our immediate backyard — it will not do Pakistan any harm to strengthen ties with the new global economic giant that also holds the power of the veto in its hands. In other words, for us, this injection of hard currency cash is vital to our long-term development. It is said that international relations are governed by three principles: dominance, identity and reciprocity. For now, Pakistan needs to focus on this last one.

Yet what of the protectionists; those who wish to keep the national economy closed off in order to safeguard local industries? Even they must be aware of the prevailing practicalities which dictate that just as there will always be winners in this great game called globalisation — there, too, will be losers. But this is not to say that the latter just have to like it and lump it. They simply have to find the right means of expressing their concerns.

The Wall Street Journal took to a short video to explain globalisation in a nutshell, quite literally. Cashews. Kollam in India once produced some 60 percent of the world’s cashew nuts. With around 800 factories operating in that area — the economic prospects were enormously promising. Yet today, all that has changed. The factories are still there.

Old Indian songs can still be heard playing in the background as the men and women get down to work, using the same old hand-driven techniques of yesteryear. The scene then changes and we are introduced to new noises of machines humming and thudding away in a Vietnamese factory. Previously home to some 2,000 workers — it now only has around 170 on the payroll.

Yet it still produces tonnes of cashews in a single day. Indeed, Hanoi currently supplies more than 70 percent of cashew nut exports worldwide, having successfully wrestled the lionshare of the market from India, which is not only home to around 100 such factories. Sadly, it thus becomes easy to separate the winners from the losers.

So, next time, any of you happen upon a Chinese person — please remember there is no need to fret, faint or fear. They are not out to harm you. The same, however, might not be said of Artificial Intelligence-driven robots!

The writer is a student of International Relations with interest in International Political Economy. He can be reached at osamarizvi10@hotmail.com

Published in Daily Times, December 13^th 2017.