KARACHI: A top official overseeing China-Pakistan Economic Corridor (CPEC) affairs on Thursday came down hard on the propaganda the landmark 'game-changing' project was a debt trap for Pakistan, terming it totally unwarranted and in stark contradiction to facts.
“Pakistan received loans at an average cost of less than two percent for big projects, which is either lower or at par with what Pakistan receives from Europe, America or the World Bank,” said Khalid Mansoor, Special Assistant to Prime Minister (SAPM) on CPEC Affairs, speaking at ‘The Future Summit’.
The 5th edition of Pakistan’s largest corporate event was hosted by Nutshell Group in collaboration with Martin Dow Group at a local hotel.
Mansoor said $25 billion had already been invested in Pakistan under the CPEC, while energy projects under the CPEC had added 5,300 MW to the national grid and another 3,500 MW would also be available soon.
In 2013, when the discussion on CPEC had started, Pakistan was facing its worst period of electricity load-shedding and the economy of the country crippled, he said.
“And whatever power was there, it was very expensive because the choice of fuel in Pakistan was one of the worst,” Mansoor said adding that 38-40 percent of the energy fuel mix was imported furnace oil, which was creating balance of payments issues as well as making Pakistani exports uncompetitive since energy cost was too high.
He said that Pakistan needed to bring in coal to correct the energy fuel mix because it was the most viable choice of fuel and the country had the seventh largest coal reserves in Thar.
However, none of the world powers was ready to fund coal projects, so China helped Pakistan.
“… this was helping them achieve their ancient dream of the Silk Road,” Mansoor said adding, “China … wanted to develop their western route since their trade, which mostly happens through eastern route, faced many choke points and is expensive too.”
Mansoor said coal projects under the CPEC were World Bank compliant.
“Pakistan produces one-third of its energy requirements from renewables such as hydel power and has one of the lowest contributions to world pollution,” he said. While defending coal power projects under the CPEC, the special assistant said the country also produced its electricity through furnace oil, which was contributed more to pollution as compared to either imported or Thar coal.
Mansoor said in the aftermath of the economic war between America and China, the latter was relocating its manufacturing facilities and Pakistan could also benefit from that. “China is planning to end its silicon chip dependence on American sources by 2030,” he said adding, “Such things can certainly help Pakistan too, but for that Pakistan needs to prepare a hundred thousand of talented persons to avail it.”
Hassan Aslam, Legal Director, CMS Cameron McKenna Nabarro Olswang LLP, in highlighted the significance of the Belt and Road Initiative of which CPEC was a part.
Aslam said that the judiciary in Pakistan needed to understand that Pakistan should be in line with the international system, adding, there should be a ‘Shared Approach’ to manage differences in order to prevent them from becoming disputes.
“In some cases, Pakistan courts have deemed international contracts null and void, which doesn’t happen elsewhere. It discourages international investment in the country.”
He said that international contracts rest on sovereign pillars and no foreign investor will come to a country, which does not fulfill its international commitments, which needs to be changed.
He said Pakistan judiciary should be encouraged to enter into judicial cooperation agreements with other countries. It will enable the Pakistan judiciary to understand the legal trends that exist in different countries.
He praised the government of Pakistan for taking this shared approach by establishing the CPEC joint operation committee, which was the highest body at state level between Pakistan and China.
“And then we have the China Pakistan Business Forum and CPEC Business Council,” he said adding that there was no doubt that CPEC was a project that could change the destiny of Pakistan.