Converting CPEC into Pakistan-Central Asia Economic Corridor

We have to give up our India-centric policies and our slave mentality.

Pakistan is on a knife-edge with the upcoming general election on 25 July 2018. With Nawaz Sharif firmly behind bars, civil society organisations are predicting rigging in the election by the armed forces and there is a consensus in the country that the army is mass manipulating electoral politics in favour of its cronies. The economic problem arising out of the present political situation is that Pakistan is seriously in the doldrums owing to its debt to its international creditors. The country is facing a sovereign debt crisis and reliance on Chinese money is very high indeed. As reported recently in the Financial Times, Islamabad is headed for a foreign currency crisis but is keen to avoid yet another IMF bailout. So it is appealing to Beijing for more lending. In the year ending June 2018 Pakistan borrowed $4 billion from China and is facing problems with the devaluation of the rupee, the strategy used by the State Bank of Pakistan (SBP) to keep the economy afloat. At the start of June 2018, the SBP only had $10 billion in foreign currency reserves in comparison to $16.1 billion just a year earlier.

The problem does not stop there because $12.7 billion in external payments are due in comparison to £7.7 billion last year. The country will need to raise $28 billion this financial year to repay its debt obligations. Therefore, in such an environment, it is hardly surprising that Kaiser Bengali thinks that “we have to play our cards right in case of the China-Pakistan Economic Corridor (CPEC). The opening up of China has enhanced travel but not trade.” He recently made these remarks while addressing members of the prestigious Pakistan Institute of International Affairs (PIIA) and the media. Speaking on the subject, ‘Changing geo-politics and challenges for Pakistan’, he said: “My fear is that we will not be playing our cards right because of the slave mentality that our bureaucrats and planners have.” Elucidating further he said: “We are always looking to a bigger power to protect us against military adventurism.” In this context, he recalled that back in the 1950, we joined the US-sponsored defence pacts, the Cento and Seato, as a guarantee to be protected during times of aggression.

But in the Indo-Pak wars of 1965 and 1971, these assurances turned out to be mere fallacy, as the US, the sponsor of those defence pacts, took a neutral position and refused to come to our defence. The idea that the US, or for that matter any power, would come to our aid in times of aggression was “laughable”, said Dr Kaiser Bengali. Now, he said, we had turned to China for protection. “Two failures loom large,” he said. Elaborating, he said that both routes — the north-south from Gwadar to Kashgar and the east-west from Lahore to Peshawar and onwards to Jalalabad — passed through Hasan Abdal. India being just 300 kilometers east of Hasan Abdal, the Chinese could well decide to use that also as a trade route with India.

He said that India-China trade was really flourishing and had touched the 80-90 billion dollars’ mark while with Pakistan it had never exceeded $14-15 million. It, he said, would be no difficulty for Chinese trucks to include India. He said:

We are hitching to China in the belief that it will give us defence cover but expecting that would be utter naïveté.

He said that no feasibility study had been carried out by the ministries concerned, and military implications were all that had been considered. The noted economist said that during his interaction with officials while in Quetta recently, he failed to receive any concrete answers to his questions from the relevant officials, and they seemed to be absolutely in the dark. He remarked further:

We should turn the CPEC a PCEPEC (Pakistan-Central Asia Economic Corridor). We have to give up our India-centric policies. Besides, we also must get rid of our slave mentality.

Columnist Zahid Hussain, who addressed the gathering by Skype from Islamabad, had a slightly more positive approach. He had to address the gathering by video link as the Islamabad-Karachi flight had been cancelled.

He said that Pakistan was facing momentous policy challenges. Russia was emerging as a force to reckon with. The 17-year involvement of the US in Afghanistan was not showing signs of a thaw, and then there was Donald Trump’s South Asia policy, which totally ignored Islamabad.

He said that the Daesh factor in Afghanistan and other Asian countries was a factor to contend with. The Taliban, he said, were controlling 40 per cent of Afghan territory. “I fear we are going back to the 1990s.”

The Pak-China relationship, he said, was nothing new; it was the economic relationship that was most important. He mentioned the billions of dollars that were being expended to the power sector. Transport infrastructure, he said, would certainly improve.

Dr Bengali said that a major concern was that concessions to Chinese firms would hit Pakistani industry hard. He said that he knew of so many industries that had recently been shut. He ended by reaffirming that he was by no means against the CPEC but advised circumspection and intense homework on the part of our planners and bureaucrats.

CPEC calls for circumspect approach despite advantages: Kaiser Bengali (The News International)

We have to play our cards right in case of the China-Pakistan Economic Corridor (CPEC). The opening up of China has enhanced travel but not trade.

These remarks were made by noted economic expert Dr Kaiser Bengali while addressing members of the Pakistan Institute of International Affairs (PIIA) and the media on Saturday evening.

Speaking on the subject, ‘Changing geo-politics and challenges for Pakistan’, he said: “My fear is that we will not be playing our cards right because of the slave mentality that our bureaucrats and planners have.” Elucidating further on his remark, he said, “We are always looking to a bigger power to protect us against military adventurism.”

In this context, he recalled that back in the 1950, we joined the US-sponsored defence pacts, the Cento and Seato, as a guarantee to be protected during times of aggression, but in the Indo-Pak wars of 1965 and 1971, these assurances turned out to be mere fallacy, as the US, the sponsor of those defence pacts, took a neutral position and refused to come to our defence.

The idea that the US, or for that matter any power, would come to our aid in times of aggression was “laughable”, said Dr Kaiser Bengali.

Now, he said, we had turned to China for protection. “Two failures loom large,” he said. Elaborating, he said that both routes — the north-south from Gwadar to Kashgar and the east-west from Lahore to Peshawar and onwards to Jalalabad — passed through Hasan Abdal. India being just 300 kilometers east of Hasan Abdal, the Chinese could well decide to use that also as a trade route with India. 

The noted economist said that during his interaction with officials while in Quetta recently, he failed to receive any concrete answers to his questions from the relevant officials, and they seemed to be absolutely in the dark. He said:

We should turn the CPEC into a PCEPEC (Pakistan-Central Asia Economic Corridor). We have to give up our India-centric policies. Besides, we also must get rid of our slave mentality.

Columnist Zahid Hussain, who addressed the gathering by Skype from Islamabad, had a slightly more positive approach. He had to address the gathering by video link as the Islamabad-Karachi flight had been cancelled.

He said that Pakistan was facing momentous policy challenges. Russia was emerging as a force to reckon with. The 17-year involvement of the US in Afghanistan was not showing signs of a thaw, and then there was Donald Trump’s South Asia policy, which totally ignored Islamabad.

He said that the Daesh factor in Afghanistan and other Asian countries was a factor to contend with. The Taliban, he said, were controlling 40 per cent of Afghan territory. “I fear we are going back to the 1990s.”

The Pak-China relationship, he said, was nothing new; it was the economic relationship that was most important. He mentioned the billions of dollars that were being expended to the power sector. Transport infrastructure, he said, would certainly improve. Dr Bengali said that a major concern was that concessions to Chinese firms would hit Pakistani industry hard. He said that he knew of so many industries that had recently been shut. He ended by reaffirming that he was by no means against the CPEC but advised circumspection and intense homework on the part of our planners and bureaucrats.

Posted by Editor

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