The China Pakistan Economic Corridor (CPEC) is being seen as a panacea to all economic, socio-economic and security concerns of the country. No doubt, the investments coming in under the project are much-needed at a time when energy crisis has crippled every other sector of the economy. The crumbling road and railways infrastructure also stands to gain a lot from this capital invention.

As shared by the Planning Commission, out of the promised $46 billion investment, $35b will go to the energy projects and the remaining will be spent on infrastructure, Gwadar’s development, building of industrial zones, mass transit schemes, etc.

However, concerns are being raised over the lack of transparency in the formalisation of agreements, reluctance of government in sharing the terms and conditions and even disclosing information that is far from being sensitive. There is hardly any focus of the government on the risks involved or dialogue with the stakeholders on how to minimise these.

Last week, Federal Minister for Planning and Development Ahsan Iqbal published an opinion piece in an English daily and came up with some explanations that he would not give earlier. His interview (part of this Special Report) also tries to dispel the perceptions of the critics, so the focus of this piece is primarily on what the apprehensions are. In fact, he was compelled to open up when details of a so far unshared plan about CPEC was discussed in the media for the first time.

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Senior economist Asad Sayeed complains that "though the Planning Commission does enlist the agreements signed under the CPEC from time to time, it never comes up with the intricate or even basic details about how these will materialise." He says the commission "has never come up with a clear cut figure on the jobs generated due to CPEC" and the reason he thinks is that China has shown its eagerness to bring its own labour along.

Sayeed points out that "China’s foreign investment model is different from the conventional one where capital-dependent countries go and invest in labour-dependent countries." But in case of China, "it is both capital-dependent and labour-dependent country and, apparently, investing here to get easy access to warm waters of the Arabian Sea and nothing else."

He further says the government is often in an awkward situation due to CPEC-related questions raised by different quarters. In his view, it is China that wants it to conceal facts. "The political model in one-party China has no space for public questioning, seeking feedback from masses and remodeling of projects as per aspirations and suggestions to the people. They simply come with a plan and simply execute it."

But here in Pakistan people do ask questions and need to be satisfied -- a proof of which is that certain mega projects have become non-starters due to lack of consensus on these.

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Every other day, a new component is added which makes things even more complex. A relevant example is that of an abrupt decision by the federal government to raise the capital cost of all CPEC power projects by one per cent to cover the running costs of the CPEC security force.

According to Kaiser Bengali, another senior economist who has also served as advisor to chief minister Balochistan, all projects have benefits and costs, and so does CPEC. "Many claims and comments are being made about CPEC but most of these do not appear to be based on empirical analysis, and the reason for this is that the data or information regarding CPEC is not public."

Bengali wants the required safeguards to be put in place. Citing an example, he says, "It is projected that enhanced energy production capacity will support industrialisation in the country but there is no strategy on how to save the local industry due to the dreaded flooding of Pakistani markets with Chinese products."

Fears of pilferage are also there just like in the case of Afghan Transit Trade (ATT). "If there is no industry where will the increased capacity be utilised," he asks. "No other country would buy it as we are producing the most expensive electricity in the region."

Bengali is said to have posed 12 questions to the government, seeking important details about the project. These have been taken up by the Senate as well, and so far he has received a one-word answer, "Yes," about the existence of an overall CPEC feasibility. No information or document has been shared so far. The questions are,

Has Pakistan prepared an overall CPEC Feasibility?

Has Pakistan prepared a CPEC Environment Impact Assessment?

What is Pakistan’s share in Gwadar port revenues, if any?

What is Balochistan’s share in Gwadar port revenues, if any?

Is the Gwadar-Khunjrab Highway a toll road? If yes, what are the shares of provinces through which the Highway passes?

What will be the (positive and adverse) impact of China Transit Trade on Pakistan’s manufacturing sector?

What will be the impact of tax exemptions to CPEC-related Chinese imports on Pakistan’s manufacturing sector?

What will be the (medium and long-term) Balance of Payments impact of foreign exchange inflows (Loans, FDI) and outflows (debt repayment, profit remittance)?

What is the budgetary burden on Pakistan for protecting Chinese road and sea convoys?

What percentage of security units, being raised for CPEC related protection, is recruited from districts through which the Gwadar-Khunjrab Highway passes?

What is the water provision plan for Gwadar?  If desalinated, what is the financing plan to cover the high cost?

What is the plan to ensure that Gwadar does not become a Baloch minority city?

Economist and journalist Khurram Husain thinks there is very selective transparency about CPEC and there was no mention of agriculture and industrial cooperation. "It’s for the first time that Ahsan Iqbal confessed last week, about the existence of agriculture component in CPEC scheme. There is a lack of clarity on data and internet connectivity as well as cooperation in the field of finance."

He says the Planning Commission gave a briefing to journalists in December 2016 but there was no mention of these sectors. Similarly, there is no clear cut description of how much of the investment will come as commercial loan, concessional loan, grant, and so on. The annual burden of repayment has been worked out by independent sources and stands at between $3.5 billion to $5 billion during the peak period.

"The Planning Commission’s chief economist has also come up with a similar figure but he hasn’t explained the formula used to reach it." Amazingly, as Husain reveals, "the State Bank of Pakistan (SBP) is silent on this issue, whereas it should have been the first to make the calculations."

Kaiser Bengali says every citizen has the right to question because wrong decisions shall have universal repercussions. "If dollar-to-rupee conversion rate reaches 200 due to the huge debt-servicing burden, a person living in Thar shall be affected just like the people living in, say, Islamabad or Karachi."