Money Matters

CPEC: Sovereignty first

Money Matters
By Zeeshan Haider
Mon, 12, 19

The mistrust between Pakistan and the United States seems to have ebbed significantly in the wake of their close cooperation for the settlement of Afghan conflict.

The mistrust between Pakistan and the United States seems to have ebbed significantly in the wake of their close cooperation for the settlement of Afghan conflict.

Prime Minister Imran Khan has developed a personal rapport with the President Donald Trump, which was demonstrated by the US head of the state in his repeated offer for mediation between Pakistan and India over Kashmir dispute that has yet not materialised because of India’s stubborn opposition to any third party arbitration for the resolution of differences between the two countries.

But Washington is giving strong signals showing their keenness to bolster ties with Islamabad in different sectors.

Speaking at Washington-based think-tank, Wilson Center, the US Principal Deputy Assistant Secretary of State for South and Central Asia, Ambassador Alice Wells, said President Trump was extremely enthusiastic about the potential for increasing and expanding US-Pakistan trade and investment relationship and both our governments were working very hard to find practical ways to do that.

Wells also commended Pakistan for jumping 28 places on the World Bank’s 2020 Ease of Doing Business ranking and for being ranked among world’s ten top performing economies.

“US plans to send 15 delegations to Pakistan next year in order explore possibilities for increasing bilateral trade,” said the ambassador in her talk at Wilson Center.

She said Pakistan would be a country of great interest once Development Finance Corporation was up and running as it would have more than double the investment cap for the Overseas Private Investment Corporation – the US government body which mobilises private capital for overseas investment. Under this program, the investment cap for Pakistan would shoot up to $60 billion from $29 billion.

The US diplomat urged Pakistan to take benefit from the increased US resources. Wells also highlighted the growing interest of leading US firms in making investment in Pakistan.

For example, she pointed out, Excelerate, a US energy group, was planning to invest over $300 million for upgrading of a floating storage regasification unit at a liquefied natural gas (LNG) terminal in Pakistan, while ExxonMobil, was making huge contribution towards securing LNG supplies to the country.

The Pepsico has invested $800 million in the development of its infrastructure over the past five years, while CoCa-Cola too has put in $500 million into the Pakistani market.

The renewed US interest in the Pakistani market of 200 million people is a welcome step and this enthusiasm comes at the time when Pakistan badly needs foreign investment to resuscitate its somewhat comatose economy.

However, Wells highlighted the US investment projects in Pakistan against the backdrop of her government’s persistent and reinvigorated concerns over the China Pakistan Economic Corridor (CPEC).

In her discourse, the US diplomat warned Islamabad against opting for the gigantic project, which both Pakistan and China considered as a game changer for the economic progress and development of entire region.

She also cautioned the CPEC would push Pakistan deeper into a debt trap, which according to her was already stifling the South Asian country’s economy.

She further said the $60 billion project would be more beneficial for China than Pakistan as much of its benefits in the shape of profits, jobs etc, would be reaped by Beijing.

The US official also raised questions about the transparency of the project suggesting it would promote a culture of corruption and kickbacks. Ambassador Wells’ outburst drew strong a rebuke from Yao Jing, the Chinese ambassador to Pakistan, and the Chinese foreign ministry.

Yao questioned where was the US when Pakistan was in dire straits and badly needed financial help, while Chinese foreign ministry spokesman rejected Wells concerns as “old slander” against China, CPEC, and Belt and Road Initiative (BRI).

The concerns raised by the US diplomat are not new. When the present government came into power last year, the US Secretary of State Mike Pompeo raised similar questions and warned the US would want these questions to be answered when Pakistan would go to the International Monetary Fund (IMF) for a bailout package.

Last year, the leaders of the Pakistan Tehreek-e-Insaf- (PTI) led government, particularly Asad Umar, who was the serving finance minister at the time, angrily rejected the U.S. concerns. This time around the response too was firm but more articulate.

Several government ministers rejected her point of view maintaining Pakistan would not forgo the CPEC because of other countries’ prodding, but would welcome close commercial and trade ties with the US as well as other nations.

The US is already locked in a global trade war with China. Washington has also been pressing its friends and allies in Europe, Asia, and across the world against joining BRI – President Xi Jinping’s ambitious programme to connect Asia with Africa and Europe through a maze of land and maritime networks.

Ambassador Wells’ remarks appear to be part of the same US campaign to restrict China’s move to expand its economic clout across the world as CPEC is the crown and flagship project of the BRI. But like Britain – which is the top US ally in the world – as well as others in Europe and world over, Pakistan should not succumb to any pressure to compromise its own interests.

Historically, Pakistan has remained a Western ally but it has enjoyed time-tested close ties with China and it needs to keep this policy.

Pakistan has to tread a political and diplomatic tightrope in maintaining this balance.

The government leaders have very rightly sent a message to Washington that Pakistan would like to forge close ties with the US, but it has the sovereign right to keep and expand ties with other countries and it would not like to be used as a proxy in the wars between other countries.

In the past, Pakistan allowed itself to be used as proxy in the cold war between the US and the erstwhile Soviet Union and then between Iran and its Gulf neighbours. The country is still paying the price in men and material for those blunders but it should not allow itself to be dragged into another one. By acting on policy of strict neutrality in such wars, Pakistan’s relations with other states should be governed by its own interests and not by others’ interests.

The writer is a senior journalist based in Islamabad