Knowing the un-known
What’s in it for me? This question sounds familiar, and is posed every now and then, especially by provinces to the federal government. Ironically, apparently we are a nation that is more interested in provincial interests, rather than national.
The $ 51.5 Billion CPEC project, also known to be an extension of Chinese ambition of One Belt, One Road Initiative is finally underway with the early harvest projects initiation. With its inauguration, Gwadar Port has further re-affirmed CPECs reality. Subject to successful implementation, the value of projects under CPEC’s umbrella is expected to super cede all foreign direct investment in Pakistan since 1975, and will, supposedly, be approximately 17% of Pakistan’s 2015 gross domestic product.
CPEC is predicted to create (directly or indirectly) employment opportunities for over 700,000 people between 2015 and 2030.
Heavily subsidised loans of $11 Billion are allocated for infrastructure projects under CPEC, originally offered at a basement rate of 3%, which was later on bargained down to 1.6% by the Pakistani side. In addition to infrastructure, loans as much as $33 Billion have been released to accommodate energy projects alongside CPEC between 2018 and 2020, expected to generate approximately 10,400MW of energy sufficient to overcome the energy shortfall of around 4500MW. Both infrastructure and energy projects are a part of CPEC’s fast track “Early Harvest Projects”. Another $8.5 Billion have been allocated by China for improving the rail network, tracks, and speed from Karachi to Peshawar.
The numbers, in terms of financial assistance (whether loans or grants) are rarely shared with the public, and the reluctance on part of the government to do so is questionable. A project of this enormity, both in size and financials, must be explained in detail to the public by the competent authorities, as it is the masses which have to bear the burden, not the government. Instead, all that is communicated is a tall claim of CPEC being the potential game changer for Pakistan, China, and the region at large.
The IMF, in its careful evaluation of the project, while acknowledging that CPEC would benefit the socio-economic progress in the short run, has already cautioned Pakistan of entailing the risk of repaying heavy loans incurred in the longer run. After all, all that glitters is not gold.
Pakistan, in addition to the benefits and opportunities offered by CPEC, must look at the other side of the picture, which may not be this green, if not evaluated timely.
CPEC: Game Changer or Danger?
Is CPEC a game changer for Pakistan, or a danger to the game itself? This is the million – in fact, in case of CPEC – billion dollar question that needs to be answered.
Opportunities and threats, for every mega project, go hand-in-hand. What turns out at the end is always conditioned to the national approach adopted while implementing the planned visions.
Despite all raised concerns, one can certainly view CPEC as a turning point in Pakistan’s socio-economic progress and geo-strategic elevation, as it is expected to pump investment and lift potential output in the longer run, provided properly implemented and managed carefully. Gaining optimal benefits of CPEC is condition to overcoming the existing gaps in governance, establishing fairness in market-state relationship, modernising the business environment, and bridging the discord between the Pak-China developmental models. Last, but not the least, provision of security to CPEC must remain the top most objective for the state.
Provision of the aforementioned pre-requisites can definitely prove CPEC to be a potential game changer for Pakistan, failing which, ironically, would not just deprive us of the desired outputs, but will expose us to the dangers of falling back financially and economically, having to bear the heavy burden of repaying the massive loans, which by far remains on top of the list of concerns as our public debt is already on a rise, and the interest payments are expected to rise after the fiscal year 2020-21.
Failing is not an option here.
What’s in it for me?
This question sounds familiar, and is posed every now and then, especially by provinces to the federal government. Ironically, apparently we are a nation that is more interested in provincial interests, rather than national.
With respect to CPEC, this question again arose as KPK and Baluchistan governments expressed their concerns over the eastern route, which bypasses major areas of KPK and Baluchistan. According to them, this would deprive the smaller and less developed provinces once again of major developmental projects to be initiated alongside CPEC, as they would be offered to the already progressive provinces hosting the eastern route.
With respect to feasibility, no doubt the eastern route provides convenience over the western route as the terrain there is extremely difficult for construction, along with a more vulnerable security. However, on political grounds, prioritisation of eastern route would deprive KPK and Baluchistan of the developmental opportunities offered by this proposed corridor. This deprivation would further add fuel to the ever existing fire of provincial discord.
The government has, however, assured that the western route will be completed on priority basis, and no room will be offered to incite the impression that the smaller provinces are being ignored.
Baluchistan, in particular, remains concerned over the share of benefits it will have, quite justified, keeping in view the trends of the past. This impression of prioritising provinces over one another, however, must be buried once and for all, and all provinces must have their due deserved share of development through CPEC.
Socio-economic and geo-strategic benefits apart, CPEC through eastern and western routes here, also provides us with a political opportunity to harmonise the provincial differences, and promote our national unity and integrity.
So are we really exaggerating?
In light of the highlighted concerns, one may question, are we really exaggerating our expectations regarding CPEC’s outcomes to be in our favour, while remaining ignorant of the grave consequences it may have on our socio-economic and political outlook?
Opportunities and threats, for every mega project, go hand-in-hand. What turns out at the end is always conditioned to the national approach adopted while implementing the planned visions.
CPEC holds immense potential to boost Pakistan’s economy by bringing in investments, technical assistance from a longing friend, creation of employment opportunities, social and infrastructure development, people empowerment, and many more to follow.
Strong governance mechanisms, fool-proof security measures, justified division of benefits among provinces, and a national will to make this miracle happen are all that are required.
