CPEC and future of investment

A new wave of propaganda is going on against CPEC and Chinese investment in Pakistan. The campaign has got impetus after Pakistan’s refusal to become a part of any bloc at the international level. The actors of campaign are criticizing not only the CPEC investment but also the brotherly relationship between Pakistan and China. They are openly asking Pakistan to reevaluate the relationship with China and blame China for Pakistan’s problems. Although, the campaign has been going on for a long time but this time new actors have been deployed to propagate at a wider scale. They have been given the task to correlate Pakistan’s economic problems with CPEC and blame China for the economic crisis of Pakistan.

First of all, the energy sector has been picked up to malign the CPEC and Chinese investment. It is the prime target of propaganda. The critics did not analyze the facts and data, but they started the campaign. They conveniently forget that Chinese investment came at a time when no one was ready to invest in Pakistan. Loadshedding was rampant across the country. Industry was closing down or shifting out of Pakistan due to loadshedding. Bangladesh was the new destination for many Pakistani investors and industrialists. People were losing their jobs due to closure or shifting of industry. Jobs became a scarce commodity and youth of the country was pushing Pakistan to create more jobs.

Loadshedding also agitated people and they started to protest in various parts of the country. According to Vision 2025 of Pakistan, Pakistan was losing US$4-5 billion annually due to electricity loadshedding. The calculations were made on the basis of major industries like textile and others. Pakistani exports also started to decline.

The household losses were more severe, as livelihoods of people were directly impacted. Youth was another segment, which was impacted severely due to lack of job opportunities.

Pakistan was desperate to secure investment from anywhere. Our friendly countries refused to recognize the needs of Pakistan and turned a blind eye towards Pakistan. They added salt to injury by introducing sanctions like FATF on the basis of so-called allegations. They did not stop here. They started to launch malicious campaigns against Pakistan. The Western media joined hands and kept on airing and printing malicious stories against Pakistan.

They created such an environment where Pakistan looked like a fragile state and dangerous place to invest. It severely impacted the image of the country and investors refused to invest in Pakistan. The opponents wanted to pressurise Pakistan and compel her to accept all the demands of the West.

Pakistan was running pole to pole to find any investment but not with much success. In this frantic situation, China extended its hand of friendship and offered to invest in Pakistan.

Unfortunately, the critics refused to recognize this, and they started to present the Chinese investment in energy sector as a source of circular debt, which is not true.

First of all, the Chinese companies invested in Pakistan according to the domestic policy and laws of Pakistan. Second, the Chinese companies were not given any special concessions.

Third, the Chinese companies were entertained according to the Power Policy of 1994, which was operational decades before the Chinese investment. If there is any problem, that is in Power Policy 1994, which was hailed by the West as one of the best policies. Fourth, in reality, the basic cause of circular debt is the Power Policy 1994, which has tied the hands of Pakistan. It was criticized by many experts and politicians. It has given rise to the problem of circular debt, which is impacting the country severely. Unfortunately, no political party tried to refine or change it. Although, the PML-N was a staunch opponent of this policy, but they did not touch it, even in 1997 when the PML-N had 2/3 majority. The government of President Musharraf also did not give any heed towards it.

Second, there is a lot of noise about the debt crises of Pakistan and some people tried to tag it with the Chinese investment. The opponents have also invented the terminology of debt trap. However, facts tell us that share of CPEC debt in total Pakistani debt is less than 5 percent and rest of the debt belongs to IMF, World Bank, Paris Club and other sources. Besides, the major chunk of CPEC projects comes under the category of investment and FDI. The data of committed and proposed projects till 2020 shows that from US$52 billion, the loans constitutes only US$11 billion and rest of the projects are investment projects. It is common sense that debt is different from FDI. So, the question is how investment can be a debt trap? Thus, the argument of CPEC debt has no weight or value.

In reality, the CPEC related investment and debt are helping Pakistan to break the shackles of the debt trap, which have been woven by the IMF, World Bank and other Western institutes. Investments and debt under the CPEC are productive in nature, which are helping Pakistan to expand economy and revenue base.

Third, the protest of Gwadar situation also gave a chance to the opponents to propagate against the CPEC and China. The analysis of facts shows that Gwadar work, which was committed by the Chinese companies and government, has been completed or near completion. The Gwadar Port is now operational, and it is helping Pakistan to improve connectivity with world. It has also emerged as one of the most suitable options for the regional landlocked countries like Afghanistan and Central Asian states. Regrettably, the work which the Government of Pakistan had to take on is in shambles. The Gwadar Development Authority is unable to deliver on the assigned task. On top of that, the mismanagement of fishing sector created anxiety among the locals. The emergence of new mafias has complicated the situation. They are disturbing the fishing habitats and impacting the livelihoods of the fishing community. It led to an agitation by the local fishing community against these mafias. Unfortunately, the opponents of CPEC were trying to tag it with China and CPEC with the purpose to undermine both.

Fourth, CPEC-related investment also helped Pakistan to improve the transport infrastructure. Owing to NATO supply through Pakistan, the road infrastructure was in a bad shape and Pakistan was in dire need of investment. Pakistan also required the new investments for building new transport infrastructure. The investment from China has provided a chance to Pakistan to rehabilitate and build new infrastructure, which has improved the connectivity of the country.

Fifth, it is pertinent to highlight that CPEC is not only helping Pakistan to come out of infrastructure problems but also paving way for the future development of Pakistan. It is a well-established fact that better infrastructure and connectivity always help attract foreign direct investment. Pakistan has already started to reap the benefits of improved infrastructure and many global companies are now showing interest to invest in Pakistan. Pakistan can benefit from the opportunity by improving the domestic business environment. Thus, from the above discussion we can infer that propaganda against CPEC does not have any data or facts; it is only built on the basis of self-assumed assumptions. Therefore, Pakistanis should ignore this rumor-based propaganda.