China Belt and Road rejuvenated in Pakistan, a deal worth $ 11 billion was signed | Instant News

When the second phase of the CPEC began to increase, many traps continued to hamper the initiative from realizing its goal of bringing prosperity to Pakistan.

The China Belt and Road Initiative (BRI) program appears to be back on track in Pakistan, with a $ 11 billion project signed last month.

As part of the China-Pakistan Economic Corridor (CPEC), nations signed agreement on June 25 and July 6 for two disputed hydroelectric projects in Kashmir valued at $ 3.9 billion. A separate deal worth $ 7.2 billion plans to overhaul Pakistan’s colonial-era railroad – the most expensive Chinese project in Pakistan to date.

CPEC, China 15 years, $ 62 billion investment in Pakistan, is seen as key to the economy in broader strategic relations between the two countries, with the aim of turning Pakistan into a prosperous regional trade center.

The flurry of agreement comes after a long period of warm activity since Pakistani Prime Minister Imran Khan came to power in 2018. It is understood that the Khan government has tried to reorganize CPEC, which is seen as very close to the previous regime.

The person who is in the midst of a CPEC revival is Asim Saleem Bajwa, who was appointed last year to run the CPEC Authority, which oversees more than $ 70 billion in projects from the highway to the power plant.

CPEC is a planned road, rail and energy project that connects China’s resource-rich Xinjiang province with the strategic Port of Gwadar in Pakistan in the Arabian Sea.

Through CPEC, Islamabad seeks to increase Chinese capital, production capacity, and skills to improve Pakistan’s infrastructure and build mechanisms for sustainable economic growth.

In return, Beijing gained connections to the Arabian Sea, offering contingency trade routes to the risk-prone Malacca Strait in Southeast Asia.

With CPEC seen as a major project for BRI China and its broader strategic commitments in the region, the need to display progress is crucial.

However, the reality is that until now many CPECs, like BRI more broadly, are in a paralyzed condition.

Fork on the road?

Entering 2020, second phase this multibillion-dollar project is projected to generate massive employment opportunities and help cash-strapped Pakistan to improve its main industrial and agricultural sectors.

Although the transportation corridor has become a major international focus, power generation is the largest part of the project completed.

That MERICS database shows that projects worth $ 25.5 billion are completed, 75 percent of which are energy projects. This includes solar, water and wind power generation, while fossil fuel capacity is around 60 percent of the extra mega-watt, not including nuclear.

Many of the so-called “early harvest” projects completed in 2020 have been delayed or over budget.

After facing a balance of payments crisis in 2018, Khan was forced to go to the International Monetary Fund (IMF) for a $ 6 billion bailout. While Pakistan’s economic problems precede CPEC, it is an ambitious step that heightens any risk and disproportionately contributes to its financial difficulties.

Aside from debt sustainability, is Pakistan well positioned to take advantage of the potential benefits of the CPEC while the second phase is underway, it is still an open question.

Bad rating on the human development index, combined with the lack of soft infrastructure and poor rural connectivity in place, making attractive investments needed in the uphill industrial sector.

There are also ongoing project security costs, in the middle of a awakening of deadly attacks by separatists in the province of Balochistan, where the port of Gwadar is located.

Last Tuesday, three soldiers were killed in an attack on a paramilitary convoy in Panjgur district – the third such attack since May. In August 2018, guerrillas from the Baloch Liberation Army (BLA) killed three Chinese engineers and injured five others in the city of Dalbadin, in the deadliest attack on Chinese personnel since CPEC was launched in 2015.

Beijing also struggles with local politics and bureaucracy. Even when Gwadar faced a power outage, the Balochistan provincial government needed more than three years to approve the construction of the Gwadar power plant project.

There is also a problem corruption and massive influence from the military.

After promising to review the CPEC requirements during his election campaign, Khan and his forthcoming government saw rapid pressure from China and the Pakistani military to maintain CPEC as a point of contact for their bilateral relations.

Army is stated that the project was “destined to succeed in spite of all obstacles” and that he would ensure its safety at all costs.

It may not be a coincidence, that retired general Bajwa, who was previously the head of the Inter-Service Community Relations (ISPR), the Pakistani Army media wing, has been named the head of the CPEC Authority – which was founded by Khan in 2019. Bajwa has since also been appointed as assistant specifically for the prime minister on information, cabinet level positions.

The Pakistani Army, which specifically controls a number of industries in the country, stands to benefit financially from CPEC. Reporting for the New York Times, Maria Abi-Habib claimed that the army “stands to fill its cash with millions of dollars through CPEC when military construction companies win infrastructure offers”.

In May 2020, the Pakistani government awarded $ 5.8 billion in dam construction contract to a joint venture from a Chinese state-owned company with a Pakistani army commercial unit.

Strategic Trap

Respect for China goes beyond CPEC.

For a country that claims to speak out for Muslim rights around the world, Pakistan has turned a blind eye to Beijing’s “re-education” and internment camps for Uighur Muslims in Xinjiang province, China.

As a result, he has open up for alleged hypocrisy. But for Khan, this is a strategic silence supported by economic reasons.

Chinese investment also comes with other types of baggage. The Associated Press reported that more than 600 Pakistani women has fallen victim to the trafficking network after marrying a Chinese man.

Given its own escalation with China, it is not surprising that the US has been critical of CPEC.

In a discussion at the Atlantic Council on May 20, senior diplomat Alice Wells reiterated US concerns and argued Pakistan should try to renegotiate CPEC terms with China in connection with the economic downturn caused by Covid-19, calling the loan term “ferocious, unsustainable, and not fair “and mentioned the lack of transparency.

Apart from being a counterweight to India and the US, Islamabad hopes for a number of tangible benefits in the near future from its close relations with Beijing.

One of these is a favorable change in Pakistan’s status with the Financial Action Task Force (FATF), an international watchdog that is fighting money laundering and terrorist financing. Pakistan has been in FATF “greylist” since 2018, and the black list will face a big blow by reducing investment and growth capacity.

With China as FATF president since 2019, Pakistan hopes to be removed from the greylist because its status is under review.

Aside from strategic considerations, the jury is still not sure whether Pakistan will be able to reap the benefits of Chinese investment. In the 5 years since CPEC was founded, there is little evidence of his ambitions and grand vision being realized.

Source: TRT World

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