CHINA CLAIMS CPEC ON VERGE OF GIVING RETURNS

China has claimed its large economic collaboration program with Pak has entered “the stage of early harvest" making it the “fastest and most effective" among all projects of OBOR. China had launched the CPEC two years ago during Xi Jinping's landmark visit to Islamabad. China is investing about $60 billion on a network of roads, railways, fiber optic cables, energy pipelines, industrial clusters and special economic zones in Pak.The corridor will link China's western region of Xinjiang to the Pak port of Gwadar on the Arabian Sea, giving the Chinese region the shortest trade route to international markets. Lijian Zhao, China's acting ambassador to Islamabad says that 19 CPEC projects worth about $19 billion are either completed or in progress. China has also rejected reported U.S. concerns  that China plans to turn Gwadar into a Chinese naval base.

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First Signs of Crack in Pakistan’s Economy

The experts have been warning Pakistan to be cautious about CPEC related Chinese loans to Pak  as its economy was not resilient enough to absorb sudden inflow of the foreign direct investment but Pak government preferred to ignore it due to pressure from China. Sudden dip in the rupee value has forced the Pak Finance Minister Ishaq Dar to sumon a report from Governor of State Bank of Pakistan (SBP) to explain the sudden dip in value of Rupee within ten days. The minister took notice of the fall in the currency against US Dollar by more than three percent on July 5. Last month, Dar had rejected perception of immense increase in foreign debts and said that at least 147 budget recommendations were forwarded to planning division. He said that budget deficit is to be cut to four percent from the previous eight percent. The finance minister had made the claim days after federal budget for the financial year 2017-18 was laid out by him the National Assembly.
View Point
Huge influx of Chinese money has created a bubble like formation in Pakistan’s stock markets, as KSE recorded highest gains in Asian markets. However, the euphoria has been punctured with the Pakistani rupee losing its value in the sharpest dip so far in its history. Pak Government and the Army are projecting CPEC as a game changer and the first change in the game is visible now

 

 

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Locals oppose CPEC

Residents of Battagram's Gajborai area once again halted construction work on the multi-billion China-Pakistan Economic Corridor (CPEC) in protest over non-payment of compensation for their land.

Nearly 1,000 locals have been affected by the construction of a tunnel falling under the CPEC scheme that runs for 60 kilometres from Kas Bridge to Thakoot Bridge, visited a Chinese base camp at Kuzabanda and an Army base camp in the Chapargram area, and asked the relevant authorities to stop further construction work on the CPEC project from Kansai to Chanjal until their demands were fulfilled.

"We were not taken on board, nor were we given a single penny in compensation. The district administration has issued us letters to vacate houses, which will be demolished for coming in the way of the project, but we have nowhere else to live, nor have we been provided tents," a jirga member said.

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Will CPEC also Collapse like this

A report claims that Islamabad is selling parts of the strategic land to China for CPEC amid India's objection to Pakistan's move to declare Gilgit-Baltistan as its fifth Province. The Gilgit-Baltistan area is Pakistan's northern-most administrative territory that borders with the disputed Pakistan-occupied Kashmir. According to CNN-News18.com, the land was procured mostly by force by Pakistani generals for the China Pakistan Economic Corridor (CPEC). The report also says that those resisting are either killed off or incarcerated without a trial. Abdul Hamid Khan, Chairman of the Balawaristan National Front (BNF) said that both the countries have to build many cantonments in Gilgit-Baltistan for deploying their huge army

divisions.

 

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Pak Selling Strategic Gilgit-Baltistan Land to China.

With OBOR Party being over, Chinese diplomats have hailed the first OBOR forum a great success story, as it  has led to assurances of buy-in from 30 states. The ultimate challenge now is to ensure universally recognised good practices of transparency and equality along with an inclusive development theme.

 

Too Many Goals lead to No Priority

 

Hailed as the “world’s project”, the OBOR initiative is aimed to boost infrastructure in Asia and Africa for the next decade and a half. In an attempt to bring all partners on board, the forum identified and approved over 270 goals under the umbrella of OBOR initiative.

 

Though setting high-level goals is a step in the right direction, but an agenda that involves 270 goals, runs the risk of being too general. The problem with this impossibly long list of goals is that nothing gets prioritised at the end of the day. All these 270 goals would not only result in a total lack of focus, but they would also be self-defeating.

 

 

 

Pitfalls of not being transparent

 

The situation clearly indicates that strategic bits of the initiative are not very clear. In fact, every Chinese province and state-owned firm has its own version of investment plan for OBOR projects. No framework was ever presented by Beijing in the forum and it seems that the Chinese are willing to throw cash without first working out the business case.

 

Beijing’s billion dollar investments to build ports in Sri Lanka became a nightmare for the country which has been mired in unsustainable debt. Similarly, dam projects in Myanmar have not gone well either.

 

Last month, Nepal and China signed a memorandum to build an $8 billion cross-border rail link as part of proposed China-India-Nepal corridor, but without first getting New Delhi on board.

 

Since 2009, China has poured $6.8 trillion in wasteful infrastructure investments with negative rate of returns and its incremental capital output ratio (ICOR) has increased by at least 50% in the last decade. At present, there are over 900 deals in the pipeline worth $900 billion which are set to reach $4 trillion mark in a couple of years – yet little is known about the project’s feasibilities. In fact, Chinese investors call the initiative “one road, one trap”.

 

The recent leaks of documents which detail China-Pakistan Economic Corridor’s (CPEC) long-term plan drafted by Beijing has raised many eyebrows and confirm worst fears of some people that the whole corridor may be actually ill-planned – rising bilateral trade deficits to skyrocketing levels.

 

At present, Pakistani exports to China are raw materials and primary goods such as textiles, rawhides, oil seeds, skins and agro products; whereas Pakistan imports from China are mainly finished goods such as machinery and chemicals. So, it is a no-brainer that Chinese investments to set up factories for production of value-added products from primary inputs would be highly profitable. In fact, this offers China the perfect opportunity to move its outdated polluting industries offshore as per its commitments to the Paris Agreement and focus primarily on innovation.

 

This Chinese version of the plan is still very vague and at the very best, is wishful thinking. There is very little that talks about the cross border movement of labour, environmental impact assessments of corridor projects and fiscal risk management.

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ONE BELT ONE ROAD OR ONE ROAD MANY TRAPS

Former president of Pakistan Peoples Party (PPP) Balochistan Mir Sadiq Ali Umrani has said that eastern Balochistan has been completely neglected in the China-Pakistan Economic Corridor (CPEC) project. He told a press conference on 04 Jun 17 that, not even a single project from the region has been included in the mega economic development project. He highlighted the canal irrigation system as the salient feature of the region adding that the eastern Balochistan plays an important role in the agriculture sector of the province.___________________________________________

Eastern Balochistan Neglected in CPEC

Former president of Pakistan Peoples Party (PPP) Balochistan Mir Sadiq Ali Umrani has said that eastern Balochistan has been completely neglected in the China-Pakistan Economic Corridor (CPEC) project. He told a press conference on 04 Jun 17 that, not even a single project from the region has been included in the mega economic development project. He highlighted the canal irrigation system as the salient feature of the region adding that the eastern Balochistan plays an important role in the agriculture sector of the province.

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Pakistan Be Ware

PAKISTAN NEEDS TO LEARN FROM CHINESE EXPERIENCE OF AFRICA AND MALDIVES

On scams by China in Africa, Rev. Mwamalanga, an economist and human rights activist had stated that “China is not a reliable partner. It will abandon Africa as soon as its needs are met. China is not a philanthropist but rather manoeuvring to woo and buy the African good will,” He argues that by pursuing and practicing non-interference policy, China is indirectly destroying the democratic dispensation in Africa which will eventually lead to massive corruption and human rights violations among other woes. He accuses China for grabbing exclusively huge natural resources while dumping only sub-standard products in Africa, emphasizing that the only motive behind Chinese activities in Africa is to serve its own national interests.

Ghana is one of the victims.

China Hunan Construction Engineering Group Corporation (CHCEGC),  CHCEGC was awarded the rural electrification project in Ghana (Africa), which has over the years been embroiled in controversies. The report on the project by the Auditor General of Ghana revealed that the national electrification project, which cost the taxpayers of Ghana millions of dollars, was executed with substandard poles and leaking transformers. The nationwide audit by the Auditor General’s Department had revealed lots of shoddy work, poor project supervision, and underhand dealings in the execution of the project. It was also discovered that statistics on projects in the rural electrification project are misleading especially the projects have not been completed yet classified as completed and vice versa.

 

Maldives is yet another victim of China.

Toll on the China-Maldives Friendship Bridge will be collected by the China for the next 20 years, without a share of penny for the Maldives Govt. This means that the people of Maldives will be at the mercy of China for using the bridge. Also, the maintenance cost, after the completion of the project, will be borne entirely by the Maldivian Govt. And to add to this, the loan of interest for the project is levied by China @5%, whereas the same loan could have been taken from World Bank @1.5%. But, in spite of lower interest rates given by World Bank, China forced Maldives to be chosen to be the lender.

 

Do Pakistanis find any similarity with CPEC.