FeaturedNationalVOLUME 19 ISSUE # 33

CPEC: Addressing security concerns and economic dependencies

The future of the $65 billion-plus China-Pakistan Economic Corridor (CPEC) has become uncertain after China officially and publicly stated that security in Pakistan is the main threat to the project.

This concern was recently emphasized by Liu Jianchao, Minister of the International Liaison Department of the Communist Party of China, during his visit to Pakistan. Liu expressed these concerns at the third meeting of the Pakistan-China Joint Consultative Mechanism, where representatives from all major Pakistani political parties were present. He stated, “Security threats are the main hazards to CPEC cooperation. As people often say, confidence is more precious than gold. In the case of Pakistan, the primary factor shaking the confidence of Chinese investment is the security situation.”

The threat highlighted by Liu is genuine, as Chinese workers and technical personnel have been targeted several times in Pakistan by militants and terrorists. These attacks have resulted in the deaths of several Chinese nationals and have halted work on various CPEC and other Chinese infrastructure and development projects in Pakistan. Unfortunately, attacks on Chinese technical personnel in Pakistan have occurred across the country, not limited to a particular region. In the restive Balochistan province, where CPEC begins at the strategic Pakistani seaport of Gwadar, Baloch terrorist groups have targeted Chinese personnel. Additionally, they have come under attack in the terrorist-stricken Khyber Pakhtunkhwa (KP) province and Gilgit-Baltistan (GB), the northernmost part of Pakistan, which borders China.

In KP and GB, groups like the Tehreek-e-Taliban Pakistan (TTP), the largest terrorist-militant network in the country’s history, have targeted Chinese officials and interests. In a recent terrorist attack in the Shangla district of KP near the GB region, five Chinese workers and their Pakistani driver were killed in an IED blast. It is also important to note that in recent months, the TTP and Baloch militant networks have formed an alliance to coordinate their activities, with Chinese workers being the biggest target of this coordination. Given this backdrop, Chinese concerns regarding CPEC security are quite genuine and alarming.

The CPEC is a key anchor in present bilateral relations between Beijing and Islamabad and is expected to remain so for at least the next three years. The focus of bilateral relations will be on CPEC until the completion of the route that China wishes to link its western part, including the restive Xinjiang region, to the Indian Ocean through a rail and road network spanning more than 2,000 kilometers across Pakistan. Currently, the pace of work on more than $60 billion worth of CPEC projects is quite slow. According to recent data, 21 projects worth $15.7 billion have been completed, including 10 power projects generating over 5,000 megawatts, a high-voltage direct current (HVDC) transmission line worth $9.6 billion, five infrastructure projects worth $5.8 billion, two projects related to the Gwadar Port and Free Zone and City Master Plan worth $300 million, and four socio-economic development projects amounting to $140 million. Meanwhile, 31 projects worth around $9.3 billion are in progress, and 36 projects worth $28.4 billion are in the planning stages. Thus, after more than 10 years of commissioning the CPEC, the progress on the multi-project economic corridor has been quite slow, raising concerns for both Chinese and Pakistani leadership.

Pakistan believes that the slow pace of work on CPEC projects is mainly due to highly unfavorable terms of various agreements signed by the PML-N government (2013-2018). These agreements were reportedly based on personal and family relations with Chinese leadership and corporate magnates. Additionally, corruption among some Chinese workers, the substandard quality of materials and work on the projects, and Chinese companies blackmailing for the release of funds and raising project costs without completing tasks have been significant stumbling blocks.

Currently, Pakistan’s economy is in a dire state, and without another long-term bailout package from the International Monetary Fund (IMF), which Islamabad is urgently seeking, the economy could face virtual default within months. Pakistan narrowly avoided default last year when the IMF approved a loan of over $3 billion. Furthermore, Pakistan’s economy is highly dependent on Chinese financial support. Pakistan owes nearly $30 billion to China, making up 23 percent of its total external debt of $131 billion. The debt repayment commitment to China exceeds the total foreign direct investment and foreign assistance from other sources, including the United States. Practically, Beijing is unlikely to write off or reduce the outstanding debt amount. The only option for Pakistan is to request a rollover or rescheduling of the debt installment payments. While China has been rescheduling Pakistani loans, this is largely linked to Pakistan’s commitment and support for the CPEC.

There is no doubt that the CPEC projects will benefit China significantly, but Pakistan is also poised to gain considerable benefits. Given China’s substantial investment in CPEC, it expects to reap the dividends of this investment. Pakistan, where FDI has reached its lowest level in history, has no other option but to do everything possible to safeguard the CPEC. With such a huge and sophisticated security apparatus, it is disturbing that Pakistan cannot provide foolproof security to CPEC projects and personnel. China’s open expression of concern regarding the security of CPEC and its workers in Pakistan indicates serious issues.

Therefore, Pakistani decision-makers must develop a workable plan to provide foolproof security for the project and the personnel working on it. Pakistan’s interests are closely tied to the success and security of CPEC, which is essential for the country’s future development. Every effort must be made to ensure the security of CPEC. In fact, the future of any foreign investment in Pakistan depends on the success of CPEC and Pakistan’s commitment to it.