Chinese investments

Hurdles that need to be removed

Pakistan and China signed on projects worth $28 billion on Monday. This was the first installment of the envisaged $46 billion Chinese investment in infrastructure building. When completed the projects will benefit all the provinces as well as AJK and Gilgit-Baltistan. Besides putting a new life into the economy the projects would generate thousands of new jobs. Unlike the 2009-2012 $7.5 billion US package, the impact of the Chinese projects will be felt all over the country for years to come.

Again, unlike the US which had “Thank you, America” inscribed over trucks carrying US wheat to help the drought stricken Pakistan in 1950s, the Chinese President, addressing the joint sitting of the Parliament after signing the agreements, recounted the help extended by Pakistan to China in the past. The Chinese style of supporting the friends in need is one of the reasons why people in Pakistan have always entertained soft corner for the People’s Republic.

The Chinese investments/loans can prove to be a game changer in Pakistan provided the government is able to make the best use of them. The way Islamabad changed the route of the China-Pakistan Corridor inspires little confidence. Will the government, whose ministries sometimes fail to utilise all the funds allotted to them, be able to handle mega projects of this magnitude? Will they act in a transparent manner while giving contracts to private sector entities? Again, the way the LNG import was handled makes one reserve one’s judgment. Will the government be able to control unscrupulous elements of the type who imported substandard Railway carriages from China? Pakistan also needs to ensure that the technology it gets from China is environment friendly.

A significant chunk of the Chinese investment will go to Balochistan where even Pakistani entrepreneurs have shown reluctance to invest. While this will help local population, this could also exacerbate tensions with regional players including Iran, India and even the Gulf countries. The government needs to move efficiently to remove their misgivings.