NationalVolume 14 Issue # 15

CPEC in a rough patch?

Rumours of a slowdown of the China-Pakistan Economic Corridor (CPEC) or abandonment of some initiatives under it have intensified after the government has diverted Rs24 billion of the landmark project to development schemes for parliamentarians.

The Pakistan Tehreek-i-Insaf (PTI), which was against the allocation of development funds to legislators and called it political bribe when it was in the opposition, has funneled unprecedented funds for schemes to gain political benefits for its lawmakers. With the allocation of Rs24 billion, the total spending on parliamentarians’ schemes would be Rs29 billion this year. In its last year, the Pakistan Muslim League-Nawaz (PML-N) government had spent Rs32.6 billion under the Prime Minister’s Sustainable Development Goals (SDG) Achievement Fund. The PTI government has started its journey with a Rs29-billion spending plan for its first year in power. Experts say both PML-N and PTI have used the name of SDGs to advance their political agendas.

According to reports, the Planning and Development Ministry issued the adjustment order in the Public Sector Development Programme (PSDP) 2018-19, on January 16, a day after the Cabinet Division had request for funds. “The approved funds of Rs24 billion will be surrendered in favour of the Cabinet Division’s Development Grant Number 108, out of the allocation for the CPEC and other initiatives available in the development grant of the Ministry of Planning, Development and Reform in PSDP 2018-19,” read the official memorandum. The money was surrendered for the “Sustainable Development Goals Achievement Programme (SAP)”, which enabled the Cabinet Division to take a technical supplementary grant of Rs24 billion from the Finance Ministry.

The hefty allocation is in contrast to Prime Minister Imran Khan’s promise, who said he would not use taxpayer money to lure voters. But he had to make yet another compromise to retain his thin majority in the National Assembly. It is said Members of the National Assembly (MNAs) belonging to the PTI had warned him that if funds were not released for their schemes, the government might lose the next election. The PML-N government had spent over Rs130 billion in about three years in over 100 constituencies and yet it could not win the election. Following in the footsteps of the PML-N, the PTI government has also set up a steering committee, headed by Special Assistant to PM on Political Affairs, Naeemul Haq, for approving development schemes recommended by MNAs for their respective constituencies. In the PML-N tenure, the job was performed by the then Minister of State for Parliamentary Affairs, Sheikh Aftab Ahmad. The schemes are being forwarded to committees at district levels, a mechanism designed by the PML-N, to hide real motives of the spending.

On the other hand, the government has rejected reports the implementation of CPEC projects is being delayed. “China-Pakistan Economic Corridor (CPEC) projects are progressing as per their schedules, while the government is expediting uplifts of the Gwadar Port for its significance in cross-regional connectivity. None of the CPEC projects is facing delay, rather Pakistan and China have agreed to the future trajectory of the CPEC and timely completion of ongoing projects,” a spokesman for the Planning and Development Ministry said in a statement.

However, the international media is skeptical about China’s ambitious Belt and Road Initiative (BRI). “Prime Minister Mahathir Mohamad of Malaysia has canceled two mega BRI projects, including a $20 billion railway, citing high costs. Pakistan’s new government has called for a review of the crown jewel of BRI — China-Pakistan Economic Corridor (CPEC), to which China has committed more than $60 billion in funding. Myanmar’s government has just told Beijing that construction of a suspended China-funded hydropower dam would not be allowed to resume. The Maldives, the tiny island nation in the Indian Ocean, is trying to renegotiate down the $3 billion debt — equal to two thirds of its gross domestic product — it has borrowed from China to fund BRI projects,” a report in the Nikkei Asian Review said.

“But, inside China, it is hard to detect overt signs of any wavering in support for BRI the pronouncements from top Chinese leaders, especially President Xi Jinping. For Xi, BRI’s architect, the vast project spanning half the globe with infrastructure links connected to Beijing represents his vision to project Chinese power and influence. But beneath the surface there is growing unease in China about BRI. And rightly so. With the country feeling an economic squeeze, fighting a trade war with the U.S. and facing criticism from nations receiving BRI funds, Chinese skeptics, including academics, economists and business people, of BRI are quietly asking if their government is putting its scarce resources to the right use. To be sure, there are no official announcements that Beijing is about to pare back Xi’s BRI dreams. Tight censorship has removed any direct criticisms of BRI from the media. Yet, one can detect tantalizing signs that Beijing is already curtailing BRI, at least rhetorically. The official propaganda machine, cranked to full steam to tout BRI’s achievements not too long ago, has turned down the volume these days. In January 2018, the People’s Daily, the Communist Party’s mouthpiece, carried 20 stories on BRI. In January this year, there were only seven. If we keep track of BRI stories in the official Chinese media in 2019 and compare the coverage with previous years, we should have a clearer picture about where BRI is headed,” the report claimed.

According to a Turkish media report, China’s “Belt and Road” Initiative has been on the agenda of global economic and political circles for the last two years. “With global trade volume expected to increase from $42 trillion to $60 trillion between 2060 and 2100, much of it will be focused in Asia and Africa, where populations will reach 4.9 billion and 4.4 billion, respectively, by the year 2100. To meet such demands, China is looking to create a mega-trade corridor that will offer a wide range of opportunities and a number of centers on land, sea and air trade routes. This requires China to not only deepen its relations with Myanmar, India, Pakistan, Iran, Russia and Turkey but also carry out multi-faceted projects in the Gulf and in Africa. Interestingly, however, all the countries with whom China has endeavored to build close relations for a “mega future” are now facing challenges. The fact that Iran, Pakistan and India are almost on the brink of war is clearly a situation that undermines the cooperation China would like to create for its Belt and Road Initiative. At the same time, the recent clash between Pakistan and India has the potential to considerably put off the process of shifting the center of gravity of global economic and political order from the Atlantic to the Asia-Pacific region,” a report in a leading Turkish daily said.

Experts say the diversion of Rs24 billion from some CPEC projects and other initiatives, which had a total approved allocation of Rs27 billion, will adversely affect them. It also indicates the PTI government attaches low priority to the CPEC and is keen to win and retain political loyalties of its members by doling out taxpayers’ money. The discretionary spending is also a violation of a Supreme Court judgment. The money has been diverted without the parliament’s approval. The CPEC is considered a game-changer in Pakistan and the PTI government should not change its status for its petty political gains.