Daily Times

The China Pakistan Economic Corridor (CPEC), launched in 2015, is a game changer for Pakistan’s ailing economy. But some opaque plans for the corridor, the upheaval likely to affect the locals along its route, and profits flowing mostly to outsiders could stir unrest. The government has repressed CPEC critics.

CPEC could help revive Pakistan’s economy. But if it moves ahead without a more thorough debate in parliament and provincial legislatures and consultation with locals, it will deepen the friction between the centre and the periphery, roil provinces already long neglected, widen social divides, and potentially create new sources of conflict.

The Imran Khan government should encourage a debate about CPEC; consult with business leaders, civil society and the affected locals; ensure that landowners receive a fair compensation; encourage hiring of local labour and allowspace for dissent. Chinese companies should also support such measures.

Envisaged in mid-2013 and launched in April 2015,CPEC, a set of projects under China’s Belt and Road Initiative, marks a new era of economic ties in a bilateral relationship historically defined by security cooperation.Pakistan’s economy clearly needs reform to better serve its people. CPEC will help in this regard. But as currently rolled out, the corridor risks aggravating political tension, widening social divides and generating new sources of conflict in Pakistan. The government should mitigate these risks by being more transparent about CPEC plans, consulting all stakeholders, including smaller provinces, the business community and civil society, and addressing concerns that the corridor subordinates Pakistan’s interests to those of China.

For its part, China also should consult stakeholders in regions that will host CPEC projects it agrees upon with Pakistan. It should encourage Chinese companies to display sensitivity to residents of those areas, including by hiring local labour. CPEC, which comprises loans, investments and grants that could grow to around US $60 billion, travels a 2,700 km route. It starts on the Pakistani Arabian seaport of Gwadar, in Balochistan province, climbs along the Karakoram Highway through the Khunjerab pass in Gilgit-Baltistan, before crossing into the Kashgar prefecture in China’s Xinjiang region. Within Pakistan’s territory, the economic and development project prioritises transport infrastructure, industrial development, energy and Balochistan’s strategically located Gwadar port. Agricultural modernisation and production form another critical component.

The Pakistan Muslim League-Nawaz government, which came to power in 2013 and stepped down onMay 31, 2018, depicted CPEC as a leap forward both in relations with China and for the country’s economic development. Contenders to national office from across the political spectrum have broadly endorsed this view. Yet some high-level officials and prominent voices in the Pakistani business sector are concerned about the failure to protect local economic interests, high guaranteed returns on equity to Chinese investors and unaffordable national debt.

While it is too early to assess if CPEC can deliver the economic gains Pakistan promises, the project risks inflaming longstanding tensions between the centre and the smaller federal units and within provinces over inequitable economic development and resource distribution. Less-developed federal units such as Balochistan and Sindh contend that the corridor’s route, infrastructure and industrial projects will mostly benefit Punjab, already the country’s wealthiest and politically powerful province. Yet, even in Punjab, locals could forcibly resist the state’s acquisition of land for CPEC’s agricultural projects.

In Balochistan, CPEC is exacerbating existing grievances among a population whose perceptions of exploitation and neglect by the centre, together with authorities’ suppression of dissent, have long fuelled an insurgency. The province will receive no direct financial benefits from the Gwadar port, a key CPEC project, which means local anger at the centre is likely to intensify.

Instead of developing a sleepy fishing village into a bustling commercial hub as pledged by Pakistan and China, the project is producing a heavily militarised zone, displacing locals and depriving them of economic lifelines. In the Tharparkar district of the Sindh province, coal based CPEC power projects are not only damaging the environmentbut are also displacing locals from their homes and could destroy livelihoods.

For all the risks and challenges, CPEC offers an opportunity to upgrade Pakistan’s aging and dysfunctional infrastructure and revive a flagging economy

Many of these problems stem from an opaque policy formulation, and the failure to heed regional and local concerns. CPEC’s Long-Term Plan (2017-2030) was formulated by the centre with little input from local leaders, business or civil society actors. It was not disclosed until December 2017 andin broad strokes after the rollout of some major elements had already begun. From CPEC’s entry point, Gwadar, to its exit point, in Gilgit-Baltistan, the state’s response to local dissent and alienation has been an overbearing security presence, marked by army checkpoints, intimidation and harassment of local residents, and crackdowns on anti-CPEC protests.

Perceived geopolitical gains could also take precedence over economic ones. Pakistan’s military establishment views a deeper economic relationship with China, even if tilted in China’s favour, as a counterpoint to rising US diplomatic and economic pressureto end support to Afghanistan and India oriented militant proxies. But as it expands its economic footprint in the country, China, too, seems increasingly concerned about the threats posed by such proxies to its national and regional security interests.

Unequal gains, combined with perceptions that CPEC projects undermine the economic, social and political interests of key stakeholders, could aggravate anti-Chinese sentiment within Pakistan. There have already been several attacks on Pakistanis employed in CPEC projects. Pakistan should ensure that CPEC’s directions and priorities address the country’s economic and political interests, including by taking the following steps:

Build political consensus on the project’s direction, including by fostering debates in the national and provincial legislatures, to ensure that there are equitable gains for all provinces, and stop arrests, harassment and other coercion of critics. Consult economists, chambers of commerce, the Pakistan Business Council, trade associations and other business community stakeholders, and incorporate measures to address their concerns in a new framework for CPEC special economic zones and development projects. Hire local labour and ensure that CPEC projects apply labour protections and practices. Consult extensively with local communities about the potential costs and benefits of major development projects and devise an appropriate compensation and resettlement plan for all those displaced, including not just formal landowners but also those with the informal land ownership common across Pakistan.

If needed, parliament should consider relevant reforms to the 1894 Land Acquisition Act. Chinese firms should consult and engage the full spectrum of Pakistani stakeholders, from competing elites to the grassroots, as CPEC projects are identified and/or implemented, and prioritise job creation for locals. Conduct comprehensive risk and political analyses of CPEC projects to ensure that benefits are shared equitably between competing interests.

Complement such efforts with effective and extensive communication with Pakistani stakeholders at the local, regional and national levels so as to illustrate common interests. For all the risks and challenges, CPEC offers an opportunity to upgrade Pakistan’s aging and dysfunctional infrastructure and revive a flagging economy. But to deliver on these promises, both Islamabad and Beijing need to implement it with considerably more sensitivity and consultation than they have displayed thus far, with provinces and the communities most affected given a greater voice in shaping CPEC projects. Locals need to see dividends as benefits that overwhelmingly flow to outsiders would aggravate social and political divides, fuelling tension and potentially conflict.

As Pakistan’s democratic transition approaches another milestone, with a second consecutive elected government completing a full term, its successor should seize the opportunities of a fresh mandate, shape public debate on CPEC and adopt related policies that put the well-being of Pakistani citizens at their core.

The writer is a book ambassador, columnist, political analyst and author of several books. He is based in Islamabad