Money Matters

The way forward

By Ihtasham Ul Haque
Mon, 05, 17

Pakistan-China close-cooperation strengthening got an enormous push, following a decision by the two governments to massively develop Pakistan’s agriculture sector under a recently revealed greater master plan. The plan pledges to boost Pakistan’s mistreated agriculture sector under an increasing $54 billion China Pakistan Economic Corridor (CPEC) project.


Pakistan-China close-cooperation strengthening got an enormous push, following a decision by the two governments to massively develop Pakistan’s agriculture sector under a recently revealed greater master plan. The plan pledges to boost Pakistan’s mistreated agriculture sector under an increasing $54 billion China Pakistan Economic Corridor (CPEC) project.

China-led Asian Infrastructure Investment Bank has started appraisal of the new agriculture development projects to be financed under CPEC for which the government of Pakistan would reportedly be extending all necessary sovereign guarantees.

The plan, nonetheless, warrants transparency and limit to the blanket sovereign guarantees being offered to the Chinese public and private companies for investing across Pakistan. Those who are in know of the things say that, though the new initiative in agriculture sector is highly a commendable move on part of the Chinese leadership, there is a need to satisfy the people in terms of transparency and the rate of return to the Chinese investors, which is said to be too high.       

Experts maintain that close cooperation between the two countries other than infrastructure and energy sector projects would help Pakistan to develop its agriculture sector by using new technologies, better use of fertilizers and pesticides. They say it is a very welcoming move to upgrade agriculture sector that still forms 23 percent of the Pakistan’s close to $300 billion economy.

The PML (N) government however, is being urged to be transparent and reveal details of hundreds of CPEC projects so as to satisfy the public and its critics who claim that China is being provided opportunities at the cost of Pakistani businessmen and workforce.

“For us, this is a golden opportunity to make best use of our irrigation system and thoroughly upgrade country’s agriculture sector and I welcome it,” said renowned economist Dr Hafiz Pasha.

He pointed out that for the first time the nation has come to know that China was not only interested in infrastructure and energy sector projects but was also ready to help the ill-treated agriculture sector. “Now there is a need to push all the four provinces to work collectively by focusing on the agriculture sector which has the capacity to absorb millions of workforce and immensely improve our GDP.”

“But the nation needs to know the terms of conditions for the Chinese loans, concessional loans, equity and investment,” the former finance minister said, adding that Chinese investors must have their good calculated profit but this should be in the knowledge of all concerned including the people of Pakistan. “Let us have those terms that benefit and favour both the countries as the concept should be good partnership and a win-win situation for all.”

Dr Pasha said he feared that Pakistani private sector might be crowded out. “I hope that there would be joint ventures between Pakistani and Chinese companies under CPEC project and Pakistani entrepreneurs and labourers are observed significantly.”

The workforce of Balochistan, he said, needed to be involved in various CPEC development projects to help improve their standard of living which was too dismal and successive governments have been paying lip service to improve their lot.

Former commerce minister Dr Zubair Khan also hailed the inclusion of Pakistan’s agriculture sector in the CPEC and said that it would revolutionize the entire sector which was good for the whole country. “For the first time any country has decided to invest in Pakistan’s agriculture sector and I tell you this is a great development,” he said.

However, he accused the Planning Commission and its minister Ahsan Iqbal of doing nothing to come up with any worthwhile idea to effectively support the CPEC project. “The minister and his team are paying billion of rupees by only extending consultancies and hiring so-called experts on big salaries.”

Dr Khan appreciated Chinese government’s broad plan to boost agriculture in Pakistan under CPEC project. “I have seen the plan which is marvelously aimed at strengthening the country’s highly neglected agriculture sector.”

He called for easing visa policy for Chinese, but he said there was a dire need to make the entire CPEC project transparent so as to remove growing apprehensions about it. “Whatever is being hidden, it is only to make commissions by the rulers and other unscrupulous elements,” the former commerce minister said.         

Different assessments are being made in terms of trade and other benefits to Pakistan and China under CPEC by 2025 following the completion of early harvest projects. Nonetheless key criticism is being diverted to the chief economist of the Planning Commission who said that as result of CPEC, 4 percent of the global trade will pass through the corridor. This means trade worth $700 billion will be conducted through CPEC which is said to be impossible and being termed as highly exaggerated by the economists and experts.

Another worry being expressed in official and unofficial quarters is that the debt liabilities would peak by additional $3-4 billion by 2022 while quantitative rate of profit for Chinese companies would be as high as $4-5 billion.  Additionally Pakistan would need $2.5 billion for importing coal and LNG for early harvest projects.

Moreover, the country’s requirements for trucks to facilitate connectivity would increase to 1.5 million compared to current 0.5 million. New details coming up also reveal that Pakistan railways will also be rehabilitated as its current 2.5 million tons carrying capacity will be increased to 40 million tons to meet the demands. There are also plans to stop a recurring railway accident which is being termed a right priority by the experts.

The bottom line is positive particularly after all the four provincial chief ministers accompanied the prime minister last week to attend a historic summit on ‘One Belt One Road’(OBOR) held in Beijing, aimed at connecting and integrating 69 economies of the world.

In his address at the summit the Chinese president dispelled the impression that China was looking for any dominance in the world through OBOR and supported the globalization that has recently been opposed by President Donald Trump who is being criticized by his own party men let alone his rivals in the Democrat Party.  

By hosting 29 heads of state and government at Beijing Summit, Chinese leadership is quietly and systematically attracting the world community in the current anti-globalization atmosphere.

The good thing is that the world acknowledges Pakistan’s geopolitical position to serve as interconnection for continental Eurasian Silk Road Economic Belt and a Southeast Asian Maritime Silk Road.

For Pakistan it is a win- win situation to have China on its side for all political, military and economic purposes. Assisting development of Gwadar and connecting it with Kasghar as part of the infrastructure projects and undertaking bigger energy schemes does not sit well with India and perhaps the US too, but it is a huge favor to Pakistan and the only thing that needs to be ensured is the transparency and inclusion of Pakistanis in it and the CPEC as a whole.

The writer is a senior journalist based in Islamabad