With a GDP of $11 trillion, China is the world’s second largest economy, second to the US. The country enjoys unparalleled and unprecedented trade surplus and the world’s largest foreign...
With a GDP of $11 trillion, China is the world’s second largest economy, second to the US. The country enjoys unparalleled and unprecedented trade surplus and the world’s largest foreign exchange reserves – over $3 trillion. China does not like to be called the ‘sleeping giant’ anymore since it has not only awakened but also changed the global power position. It is interesting to note that unlike other great powers of the contemporary world, which used military power for empire building and derived their global positions on the basis of their military strength, China continues to focus on its economic build-up.
The One Belt, One Road (OBOR) initiative is a natural consequence of a capitalist economy and thus it is not an exaggeration to see OBOR as a Chinese capitalist expansion plan. OBOR falls in the core-periphery relationship and thus needs that analysis. Investment in infrastructure on loans which we have to pay back and big contracts including Bhasha Dam, Thar Coal field, Karachi power plants and Gwadar would translate into good business for them. This is the core concern of every nation-state: business diplomacy.
China is making deep inroads not just in Pakistan but in most of its neighbouring countries without sending its army there. We have a lot to learn from China’s rise – as they say, capitalism and democracy are not the same thing. State-led economic growth is a reality in the case of China.
Estimated capital investment under OBOR is over $500 billion – a sum that even the ADB, the IMF and the World Bank do not have. Other economies of major Western countries are on the decline and Western Europe is no more the core of the capitalist economy. We are witnessing the Asian century.
On the opening day of the OBOR conference in Beijing, the Chinese president proudly mentioned investing $124 billion on infrastructure projects in 60 countries.
What China is doing could have been done by the US, but the latter went into military conflicts, occupations, troop stationing and defending the post World War II world order. While the US continues to do that, China is heavily investing in a new world order. Is this what the US policy of ‘engaging China not containing’ wanted to achieve? Perhaps as a capitalist partner, yes.
China has not contributed much in destabilising the region or the world at large. It means business and that is what it is pursuing. With this week’s two-day OBOR conference, China has taken away Washington-focused world to Beijing. The world now looks to Beijing instead of the capitalist core IMF-World Bank with expectations. While Hillary Clinton’s talk of ‘American soft power’ and of telling the world the ‘American story’ may not be over yet, from England to Greece and from Central Asia to Pakistan and Africa, the world is more interested in not just hearing about but being a functional part of the ‘Chinese story’.
The secrecy part around CPEC is pretty clear because our military establishment considers the economic corridor to be a national security document – once the Chinese are here with their heavy investment and foothold, no country will dare invade us. In this way CPEC is a security guarantee and our Chinese defence wall. This is also why critical opinion and analysis against CPEC is often dubbed as anti-Pakistan. But critical opinion won’t harm Pakistan. Let there be honest, open and frank debates. It is our right to question what governments in power do and every institution of the state is accountable to its citizens, academia and journalists. These discussions define and make up Pakistan. A monologue on key security economic issues will create blind spots and doom us.
If the provinces in Pakistan are unhappy because they feel left out by CPEC projects, it is because details of the projects have not been shared with them. There are constant contradictions and variations in government versions with regard to who gets what under CPEC. The office of CPEC under the Ministry of Planning has failed to clarify the working of the project to the provinces. The provincial cabinets have not been briefed on this project.
The Sindh Assembly never discussed the project because of Asif Ali Zardari who takes credit for envisioning CPEC. An open debate would have helped address the misconceptions and confusion regarding the project. The federal government, unfortunately, has allowed the confusion and suspicion to stay. The same can be said about Balochistan and Khyber Pakhtunkhwa. Three provinces tend to believe that it is only Punjab that is the biggest beneficiary, which in reality may not be true, but then how much time was spend in explaining this to the provincial assemblies?
Out of the seven Special Economic Zones (SEZ) to be set up across the country, two were to be in Sindh – one in Bin Qasim in Karachi and the other in the Khairpur Industrial Zone which has remained unused for the past several years – but the federal or provincial government has not declared anything officially. This kind of secrecy gives birth to speculations and suspicion. Sindh’s ‘ultra-nationalists’ see CPEC as a threat to the Sindhi majority in the historic homeland and some even see it as the new ‘East India Company’. What they don’t realise is that a backward province like Sindh – with a population of close to 60 million people and one that is heavily dependent on agriculture and does not have an economic future – needs investments.
If one is to look into the past two-three decades, there has been no industrialisation in Sindh which is also why a lot of workers from rural Sindh are migrating to Balochistan for work. Nine labourers who were killed in Gwadar recently belong to my home district, Naushahro Feroze. The attack was a big question mark on the CPEC Security Brigade that failed to protect the lives of innocent workers. The PPP added to the misery by not even providing ambulances to transport the bodies of the deceased; they were taken to the graveyard in tractor trolleys.
When Beijing is in open dialogue on OBOR with the rest of the world, why do we have to be secretive about it? Pakistan’s top economists are still puzzled with the interest rate on the estimated $46 or $54 billion infrastructure investment as they calculate its impact on debt servicing in the years to come and on the flight of capital from Pakistan once these projects become operational. These are serious matters that should concern us and we need answers for the long-term management of our finances.
The other big question is: how can loans – that will be spent on infrastructural needs of China – be characterised as an investment? One can ask: if China needs a corridor, why do we have to pay for it? The huge spending on infrastructure will widen the gap in spending on projects of social and human capital and infrastructure. Given the high levels of poverty and illiteracy in our country, a balance is needed. We cannot leave over 50 percent of our poor folks at the base of the trickle-down effect of a capitalist economy.