CPEC pushes Pakistan into the dragon's greedy mouth

Pakistani politicians wear the China-Pakistan Economic Corridor (CPEC) on their sleeves with the same pride that its military generals wear medals on their chests. Politicians couldn’t deliver a viable democracy and the generals victory in any war, but that matters little in the country.

CPEC unites them in the same vein as Kashmir does. Politicians can flaunt it before the populace as the pot of gold at the end of the rainbow which will alleviate their sufferings. The generals' smugly pat their backs because they control CPEC, much as they control everything in Pakistan, including democracy.

For China, CPEC is the flagship of its gigantic Belt and Road Initiative (BRI) that seeks to awe the world with Chinese power and influence. As a natural corollary, Pakistan is the jewel in the Chinese crown which will <a href="https://thediplomat.com/2020/05/pakistan-discovers-the-high-cost-of-chinese-investment/"><strong>deliver humongous profits to China</strong> </a>through CPEC—a bitter truth which the Imran Khan government discovered recently.

<strong>Corruption in CPEC</strong>

An investigation by Islamabad to examine why Pakistanis were paying higher power bills from CPEC projects has opened a can of worms. The investigation report, which looked into six CPEC-based coal-fired and wind energy power projects by a committee, found massive corruption, over-invoicing, excess interest, and high tariff charges for CPEC-produced electricity.

The report says Chinese projects are costlier than international standards. Chinese companies have charged excessive interest and over payments run into billions of dollars. The report says that while one Chinese company has already recovered over 70 per cent of its entire project equity in merely two years of operation, the other one has recovered over 30 per cent in just one year.

This stunning revelation about its all-weather ally comes after Pakistan recently asked friend China to extend the debt repayment period on $30 billion in CPEC loans. That the CPEC is a debt-laden project is known to everyone including China but Pakistan. However, the latter has studiously defended the opaque CPEC deal, a deal whose fine print seems bigger than the deal itself. The financial state of Pakistan is so precarious that it is unable to even repay its interest payments, and CPEC is just one among many those mounting debts.

<strong>Obstacles galore</strong>

The $62-billion Chinese jewel is hanging around Pakistan's neck like an albatross. Ever since Khan took over as the Prime Minister in July 2018, <a href="https://southasianvoices.org/ignoring-balochistan-amidst-fears-of-a-cpec-slowdown/"><strong>CPEC has visibly slowed down</strong> </a>in both—the fawning publicity in the Pakistani media and action on the ground.

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Beside Pakistani foolhardiness and Chinese cunning, Baloch nationalists have ensured that Pakistan sinks further into the CPEC quagmire. Angry over decades of financial exploitation and living in perpetual degradation, the Baloch look upon it as an exploitative project, which will further suck their rich resources. They look upon CPEC as Chinese imperialism. Observers note that Baloch nationalism has intensified since CPEC was announced for the province.

Chinese engineers working at CPEC sites in Balochistan have become sitting ducks for attacks by Baloch nationalists. These attacks have also taken the lives of dozens of Pakistani soldiers, including officers, forcing Islamabad to flood the region with military personnel.

Pakistan was forced to deploy a specially-created task force to deal with attacks on Chinese interests. Also, the Pakistani Army launched a brutal crackdown on the Baloch people. If the locals step out of Balochistan, they cannot enter their towns unless they possess proper identity cards. Similarly, foreign journalists are not allowed to visit the port town of Gwadar without certain permissions.

Ironically, despite Pakistani boots on the ground, the Chinese are not taking chances. Reports say the region is crawling with Chinese security firms, albeit on the sly. These firms are now tying up with local security agencies. It won’t be a surprise if the Chinese sent inflated bills to Pakistan tagged with high interest rates for providing security to themselves on Pakistani soil!

Like the Balochs, people of Gilgit-Baltistan (GB), a region captured by Pakistan in one of its earliest attacks on Kashmir, have misgivings. The people are mostly Shia and they have some of the same concerns that the Balochs have—usurpation of resources and land grab.

Late last year, people of Ghanche district in GB held protests against Pakistan for leasing pasture land to China for mining. The GB people have another serious allegation that the CPEC is a ploy by Islamabad to change the demographics of the region as Sunni majoritarian Islamabad has been settling Sunnis of other communities in the region. They also fear environmental damage to the pristine Himalayan ecosystem.

<strong>Falling fast into a debt trap</strong>

Call it karma; the coronavirus that flew all the way from Wuhan, China, has hit CPEC progress. Work on the project has slowed down considerably and Pakistan had to rush to multilateral institutions to ask for more loans. In the last three months, Pakistan has borrowed from the World Bank, the International Monetary Fund, and the Asian Development Bank. We are not even counting friends—Saudi Arabia ($3 billion cash deposits and  $3.2 billion deferred payments on oil), Oman ($3 billion), UAE ($3 billion), <a href="https://www.thenews.com.pk/print/501752-a-peek-into-us-aid-to-pakistan-between-1947-2019"><strong>and the US, which has kept its floodgates open</strong> </a>for Pakistan for decades. Some of the lenders have categorically told Pakistan not to service CPEC projects with the borrowed money.

That CPEC is pulling down an already crumbling Pakistan is slowly becoming clearer to the government. Pakistan has been ripped off by the wily Chinese companies to the tune of billions of dollars in just the power projects. Will it be able to hold on to its sovereignty by the time all $62 billion worth of CPEC is delivered? Sri Lanka, and Maldives had to give up their assets and atolls to China for executing over-priced projects. <a href="https://theprint.in/world/cpec-chinas-most-ambitious-project-in-pakistan-has-become-a-corridor-to-nowhere/374430/"><strong>What will China demand from Pakistan?</strong></a>

Corruption and excessive military spending are synonymous with Pakistan. Economists will now add CPEC to that inglorious list. All three will push Pakistan into the dragon's mouth. China has already taken lands in GB for mining and is eyeing Balochistan for the port. Daud Khan Achakzai, a Baloch Senator called CPEC, “the China-Punjab Economic Corridor" while American scholar Christine C. Fair has described CPEC as “Colonizing Pakistan to enrich China”.

While the politicians deliver platitudes and the generals strut about in shining medals, the Pakistani people pay for the CPEC..