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As political temperature is rising in the country, so is the debate over the China-Pakistan Economic Corridor (CPEC). The row has become so intense that the Chinese embassy has to repeatedly intervene to cool down the temperatures and try to address the concerns of the complaining parties.
The embassy last month issued two statements to clarify that the eastern route is the part and parcel of the project and benefits of the project would be judiciously distributed among all parts of the country.
In the latest such effort to salvage the gigantic project from further controversy, the Chinese ambassador Sun Weidong met with Tehreek-e-Insaaf chief Imran Khan to seek assurances that the November 2 protest by Khan’s party has nothing to do with the CPEC.
The meeting was held against the backdrop of an impression being created that the upcoming protest of the Tehreek-e-Insaaf also stems from concerns that the Khyber Pukhtoonkhuwa province is being deliberately left behind in reaping the benefits of CPEC
The Chinese ambassador reportedly told the PTI chief that his government is taking holistic approach towards CPEC and has no intention of giving preference to any specific route for the project.
Apparently, meeting was prompted by the government officials repeated statements that the PTI plans to lockdown Islamabad could impede work on the CPEC projects. It was PTI’s sit-in in front of the parliament house in 2015 that forced Chinese President Xi Jingping to cancel his visit to Pakistan to launch the $46 billion flagship project.
Moreover, statements from Chief Minister Khyber Pukhtunkhuwa Pervez Khattack, expressing fears that the eastern route does not figure in the priority list of the federal government also deepened the controversy.
It will be highly unfortunate if the project of such national importance is made subject of political bickering.
At the time, when foreign investment from other countries in Pakistan is shockingly shrinking, it is only China which is coming in a big way to invest huge money for strategically and economically most important project for the country. In 2014, there were a dozen countries which were investing more in Pakistan than China but now China figures atop among countries making investments in Pakistan.
Though there are many issues that need to be addressed but the debate should not be degenerated into public bickering that makes the entire project highly controversial. The primary responsibility to save this vital project from further controversy rests on the government.
The prime minister needs to take personal initiative as he had done in 2015 when he called All Parties Conference to allay concerns of nationalist parties from KPK and Baluchistan to take all stakeholders into confidence over his government plans about this project.
The government needs not only to resolve political row over the issue but it should also answer the pertinent questions being raised from other quarters.
The International Monetary Fund report released at the end of the three-year bailout package for Pakistan has very extensively scrutinized the CPEC and its short-term, medium-term and long-term impact on the economy of Pakistan.
According to the Fund, the CPEC would undoubtedly jack up investment and growth in Pakistan in the short term but it poses risk for the country in the long-term in the shape of repayment obligations and profit repatriation by the Chinese companies.
“During the investment phase, as the ‘early harvest’ projects proceed, Pakistan will experience a surge in FDI and other external funding inflows,” the IMF said in its report. However, the import of machinery and other requirements for the projects to be set up under the CPEC is likely to offset a significant share of the inflows made under the CPEC that would lead to the widening of the current account deficit.
According to the report, Pakistan would have to manage increasing CPEC-related outflows once Chinese investors start repatriating profits from the projects and the amounts involved could add up to a significant level given the magnitude of the foreign investment.
Moreover, it said, repayments of the loans taken from the Chinese banks would also be made after three years.
Both of these, repayments and profit repatriation, “could reach about 0.4 per cent of GDP per year over the longer run,” the report said. “Reaping the full potential benefits of CPEC will require forceful pro-growth and export-supporting reforms.”
All this requires improved business environment in the country as well as good governance and security. With government bogged down too much in the domestic politics, the matters relating to CPEC are not being taken seriously.
So far, there have been just political statements from the government leaders admonishing opposition for impeding development of the country by creating controversy over the CPEC but there has been no serious effort to address political as well as other concerns in an appropriate manner.
Now that the IMF report is out in public in which it extensively scrutinized the CPEC’s economic impact on Pakistan, the government should have responded to those concerns.
But with political temperatures rising with every passing days, there is a skepticism that whether government would be able to spare some time to address these concerns. But given its importance for the economic uplift and progress of the country, the CPEC could not be ignored for political expediency. Therefore, the government at the highest level should take note of the issues being raised relating to CPEC and address them on urgent basis.
Moreover, the government needs to maintain complete transparency in its dealings regarding CPEC as any lacunae or discrepancy in this regard would have a long term impact on the country.
The CPEC could no doubt serve as a game changer not just for Pakistan but for the entire region as better inter-connectivity would allow more trade among Pakistan, China, Iran, Afghanistan, Central Asian states as well as India.
But this objective can only be achieved if we handle this project judiciously. The CPEC, no doubt, provides a golden opportunity for the economic uplift for Pakistan. Let’s see how best we use this golden opportunity for our development.
The writer is a senior journalist based in Islamabad
