But what, you may ask, has McCarthyism got to do with the China Pakistan Economic Corridor (CPEC)? Well, in case nobody noticed, there is a movement gaining hold in Pakistan that if you dare question the CPEC, then you must be an “enemy” of Pakistan. Some time ago, Punjab’s former chief minister Shehbaz Sharif thundered that “the internal and external enemies of the CPEC need to shut up.” And he is not alone in issuing shut up calls. Prominent intellectuals have fallen for this trend. A well-known Pakistani economist of international repute recently repeated almost the same lines at a gathering at his own institute Others have labelled those raising questions about CPEC as negative, cynical, spreading “fabricated stories” and indulging in “emotional outbursts”, and “working on an outside agenda.”
Why have the agreements not been made public? As per official reports, the first of the CPEC agreements were signed in late 2013 or early 2014. It is now 2018 and the public has still not seen the details
This surprising display of rage is difficult to comprehend. More worrying is the trend of increasing McCarthyism that is engulfing the debate surrounding CPEC, whereby anybody raising a query about it must be an “enemy of Pakistan.” What we need, instead, is a dispassionate analysis based on facts. And any analysis based on facts would suggest that there are many aspects of this debate that either remain shrouded in secrecy, or are devoid of details.
Why have the agreements not been made public? As per official reports, the first of the CPEC agreements were signed in late 2013 or early 2014. It is now 2018 and the public has still not seen details of the signed agreements. What is behind this veil of secrecy? Unfortunately, for reasons unknown, the agreements are a closely-guarded secret to which only a few have access. Only recently were some selected details of the long term CPEC plan released to the public.
The CPEC is indeed a golden opportunity, one that Pakistan would be hard pressed to find. We know that it is a venture encompassing $60 billion, distributed among various initiatives (mainly infrastructure). But what is not known is that how we intend to use it to our advantage. The narrative for future development using CPEC is completely missing. Put another way, we have yet to see Pakistan’s CPEC narrative and strategy. For example, almost all of the CPEC investments are tuned towards establishing new infrastructure. Yet, as the reputed Economist magazine noted recently, almost half of the established infrastructure remains idle or underutilised. How on earth does the government intend, then, to optimally utilise the newly-established infrastructure? I have yet to see any plan or document that purports to address this issue.
The major chunk of investment under the CPEC (around $35 billion) is meant for power generation. As highlighted in these pages, and often discussed at various forums, Pakistan’s power sector’s main issue is governance. Electricity generation is only part of the equation. Concentrating solely upon generation while ignoring other important aspects, like distribution losses and pricing, makes little sense since higher generation would only beget a bigger circular debt. And lest we forget, all those coal powered plants will add tremendously to the environmental degradation (at a time when China is aggressively doing away with coal power). Moreover, how is the government going to pay the investors all those hefty returns (exceeding 17 percent or more)? I, or any other person, have yet to see any plan that envisages solutions to these problems.
Poor intellectual abilities and dearth of capacity at official level is not limited to the above discussed cases. Consider the irrational exuberance surrounding repayment of debt that will be incurred under CPEC, and the claim that the projects under CPEC will pay for themselves. Will they? How? Instead, the reality is that the people witness officials scurrying around for additional foreign exchange every day, from Beijing, IMF or any other source. In simple words, Pakistan cannot even meet its present debt obligations. How does it then plan to return an additional $60 billion incurred under CPEC (please note that the ‘investments’ under CPEC are loans taken by Chinese companies from Chinese banks, which they will have to return with interest besides the principal. It is not coming from Chinese savings!).
It is not just me or a few select others who have questions. Go around Pakistan, and meet the industrialists and businessmen. Industrialists are especially worried about the onslaught of Chinese products and the unprecedented concessions being offered to Chinese investors for setting up production plants in Pakistan. Any realistic assessment would confirm that Pakistan’s industrial capacity is no match for the Chinese, both in terms of quality and quantity. Even the Americans and Europeans are finding it hard to compete with the Chinese. For Pakistan’s industrial sector, already plagued with a plethora of issues, the absence of any plans to analyse probable challenges arising out of CPEC (and hence the need for a policy for ameliorating the problems) is yet another reflection of official apathy towards Pakistan’s cause. For a country already facing the spectre of de-industrialization, policy absence may spell complete doom.
Readers, please decide whether the above stated questions and queries makes me anti-Pakistan. In short, a hundred more questions like these can be raised that demand answers. Given the importance of CPEC, this kind of required clarity is critical. Taking recourse to McCarthyism won’t do. This program is too important in its implications for the people of this country, and therefore there is a critical need for transparency. Once the answers start coming in, there would be no more questions. Therefore, my message to all those who fly into a tizzy when confronted with such queries is that, dear Sir’s, calm down and hold onto your horses. Seeking clarifications on CPEC does not amount to being anti-Pakistan. In fact, in the long run, it may turn out to be a saviour.
The writer is an economist and can be reached on Twitter @ShahidMohmand79