IN mid-April, the Chinese president signed agreements worth $46 billion under the China-Pakistan Economic Corridor project (CPEC). Among other aims, the project is to offer a secure, all-weather, and the shortest possible route between Pakistan’s ports and the underdeveloped areas of western China.
This seems to be a great opportunity for Pakistan to capitalise on its much-vaunted ‘strategic location’, particularly when the corridor will connect the under-construction $242bn 7,000-kilometre high-speed railway from Beijing to Moscow, and the already completed 11,179km long runs from Yiwu in China to Madrid, through Germany and France.
The CPEC has brought fresh hope. Nevertheless, what continues to hold economic growth hostage is the failure of successive governments to come to grips with the severe energy storage, which is seriously challenging national sovereignty.
The current political regime claimed that it would overcome the energy crisis in one year. Two years later, it has produced the Rs60bn metro-project in Islamabad and the 100 megawatt solar project in Bahawalpur. The costs and sustainability of these projects have exposed the capacity and intention of the regime.
The question remains: to what extent will the CPEC be able to stimulate the Pakistani economy? This depends solely on the state of governance in Pakistan. Though there are claims that the economy has been reinstated in the last two years, we must compare this to the economic growth of the once-poorest countries. The economic growth rate of these emerging economies — for example, in Africa (Congo, Mozambique and Ethiopia) — crossed the 8pc figure in 2014. The sustainable economic growth and economic transformation plan of Ethiopia holds lessons for Pakistan.
Clarity is needed for implementing the CPEC project.
Clarity is important for the successful achievement of the CPEC. The Chinese president in his address spelled out his vision for this country as an ‘Asian Tiger’ in its backyard; this seems to be an overambitious plan. Following his visit, Pakistan became mired in controversy related to the CPEC route. The vision, therefore, remains foggy. This is tragic news for Pakistanis, who are already deprived of good governance, but it is even more shocking when compared to the vision displayed by Indian Prime Minister Narendra Modi in attracting investment from both Japan and China.
After just three months of taking charge of government, he landed in Japan for five days for an extensive dialogue in line with his party manifesto. He is keen to maintain a 10pc growth, and is pursuing the target for a $20 trillion economy in the next five years.
By contrast, Pakistan’s internal vision remains murky. Credit goes to President Xi Jinping as the chief architect of the project. On the Pakistani side, the non-seriousness is reflected in the fact that three weeks after the Chinese leader’s visit, the government’s impact has been merely rhetoric with nothing tangible on the website of the Ministry of Planning and Development.
Modi did not busy himself with signing half-cooked MoUs, but laid down a concrete framework with clear milestones. Yet, the most impressive sign of commitment was when Modi set up a special management team, the Japan Plus Cell, under his own supervision, and with two members out of six nominated by Japan for transparency. The cell was functional in two weeks. The case of the CPEC has been plagued by controversy over the route, with the government so far failing to mark out the most effective route and arteries.
On the CPEC package, China has shown extraordinary interest in the development of hydropower projects, but Pakistan’s one magic trick is selling LNG as the panacea of the energy crisis, which has succeeded in including the Nawabshah LNG terminal and pipeline projects. Unfortunately, it is apparent to many that the import of LNG is developing into a scandal.
Pakistan should be lauded for providing full security to the Chinese, but the real risk is keeping track of all the financial assistance. Mr Xi has already started a strict campaign at home to ensure money is being spent where it should be. They might look closely for the impact and outcome of several billion dollars worth of aid to Pakistan — but there is hardly any hard evidence on the ground.
The CPEC is a package for the people of Pakistan, not for the rulers, so we have every right to use this $46bn for the best value. We want to know the actual physical progress of each component of the CPEC. This is possible through simple ICT technologies for real-time monitoring. Accountability, the tracking of progress and real-time monitoring will be necessary to turn the vision of the Chinese president into reality. Otherwise, it will only be a game changer for those whose foreign accounts are already overflowing. The slogan ‘strong economy, strong Pakistan’ can only become a reality with strong national commitment.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.