Daily Times

So finally, is there something about CPEC that we should be concerned about or not and, if there is, what is it? All CPEC related projects presently underway are on infrastructure and energy. Their benefits take time to be visible.

However, loans being offered to Pakistan are project specific. Which means that they are released in portions. Every next portion depends on completing the work for the previous portion. If the work is delayed, the next release of funds is withheld. Delays result in escalating costs and increasing interest repayments.

I greatly fear that, except for road infrastructure, Pakistan’s institutional capacity; is hampered by the perpetual bureaucratic hurdles and other daily problems, resulting in loss of time. Unless a special arrangement is instituted for CPEC related projects, we will suffer from constant delays and mounting debts.

Many of the projects being undertaken are technology intense and, therefore, some of these may be beyond the capability of our industries to meet. Those that are beyond our technological abilities will perforce depend on Chinese firms by default. But those that aren’t must be undertaken exclusively by Pakistani companies. I am not sure that they are.

Even those projects that fall to the Chinese will need to outsource some sub-projects. The outsourcing must be also exclusively Pakistani.

What is more, all materials which are sufficiently up to the desired standards, must be purchased from local markets. Only thus will Pakistani industry, which is presently somnolent, return to life. I gather that the Chinese insist on their products being used.

Recently I heard of an incident where a Pakistani firm obtained the contract for installing a considerable portion of the fiber optic cable along CPEC. The Chinese company insisted on their purchasing a Chinese cable which was almost twice the price and the Chinese cable was not as good as the one offered by Pakistan Cables.

The Pakistani company bought from Pakistan Cables. The result was that it is faced with stoppage of payments. I have no reason to doubt the veracity of this story.

The only way fruits of CPEC can reach the local population is by generating job opportunities. Jobless youngsters in Pakistan is on the rise. But that doesn’t seem to be happening. Not just the skilled labour but, even much of the unskilled labour comes from China. Nor do Chinese proposals on agricultural improvements and industries seem to include much for Pakistani farmers or Pakistani agro-based industries.

In the role picked for us — Gwadar plays a priceless part in fulfilling the Chinese dream

International banking rates are usually fixed at the London Interbank Offered Rate, Libor. Libor is usually between 3 to 4.5 per cent. China National Bank, CNB, is offering us loans at considerably higher rates, ranging from 5 to 7 per cent.

If CNB is the only bank that is prepared to offer project loans for CPEC, this might be an insurmountable problem; leaving us with no other option, except negotiating with it. If, however, this is a voluntary acceptance, it can only be modestly referred to as a blunder.

And, if this is a Chinese precondition, our political leaders were fools to accept it.

If I picked just one fault with CPEC, it would be in allowing China to establish their monopoly in Pakistan. And our government seems very happy doing so. We have not even tried offering any projects to any other country. Even that, we seem to be happy permitting the Chinese to do so.

Instead of Pakistan hosting an international trade fair at Gwadar, March this year China hosted an international CPEC Summit in Beijing. But that’s not all.

Before the CPEC Summit, the Chinese ambassador to Delhi had the gall to offer India a partnership in CPEC, furthermore, he even offered to change its name for them. I have absolutely nothing against India joining CPEC. In fact, I am of the view that we should ask India to be our partner in CPEC. That’s the one way of breaking Indian hostility that might work.

And that is precisely the point. It should be ours to offer, not China’s. China is welcome to offer anything to anyone until it crosses the Khunjrab Pass. Thereafter, it’s the sovereign Pakistan territory.

CPEC may be a portion of the OBOR, One Belt One Road Chinese project but it’s a vitally important one. Without Gwadar, CPEC cannot become a ‘corridor’. And, if Chine is confined to Chabahar for its outlet, Chabahar does not offer a tithe of Gwadar’s capacity.

I have, in earlier papers, likened CPEC to the Marshal Plan for the reconstruction of Europe in the 1950s. Forget the stated reasons for both but the economic motive behind both is the same. In 1950s US had a glut of goods to sell and needed to expand its market, now China does.

In the role picked for us, Gwadar plays a priceless part in fulfilling the Chinese dream. The Pakistani portion should be proportional to our contribution. Instead, we are allowing China to walk away with almost all the golden eggs that our collective goose is laying.

Moreover, we have permitted them to establish their monopoly over us. If we continue down this path, the ‘priceless opportunity’ that CPEC does indeed offer, may turn sour. Our future generations may merely be changing masters, instead of ours, the US, theirs will be China.

The writer is a retired brigadier. He is also former vice president and founder of the Islamabad Policy Research Institute (IPRI)