Economy and Business

Overselling CPEC

It is easy to understand that the volume of trade going through the ports of Pakistan will increase once the CPEC project gains momentum.

May 12, 2017
It is easy to understand that the volume of trade going through the ports of Pakistan will increase once the CPEC project gains momentum. But when the chief economist of the Planning Commission claims, as he did in a recent interview with Reuters, that 4pc of global trade will pass through this route, it can only be called a gross exaggeration. In fact, that figure is absurd since it implies that approximately $700bn could be flowing through the CPEC infrastructure, going by figures of global merchandise exports alone. Clearly, this is an overstatement of colossal proportions. 
The same individual then went on to claim that Pakistan could earn up to $8bn a year just from toll taxes and ‘rental fees’ from this traffic, helping it to easily tide over the repayment obligations from the various investments that have come in under CPEC, and which he claims will peak at $5bn per year.
Once again, this sounds like an overly optimistic assessment. First of all, nobody is sure of what toll taxes and ‘rental fees’ he is talking about, and, secondly, whether his projections of the volume of traffic that would be generated by CPEC are realistic. Thirdly, who will be responsible for the cost of maintaining the road infrastructure in the years to come? For a long time now, there have been calls for more transparency in CPEC implementation, particularly regarding the financing arrangements. Thus far, the government has kept silent.
 If this is the best that the Planning Commission has to offer in response to repeated calls for more disclosure, then it suggests that the government itself does not know what it is getting involved in. Ahsan Iqbal, the deputy chairman of the Planning Commission, has repeatedly urged those who are asking questions about CPEC to avoid “negative propagation”, hinting that doing so plays into the hands of Pakistan’s enemies. But what else are we supposed to do when we are fed this sort of overoptimistic information, if not ask questions?
Read More:
Dawn News, May 12, 2017

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