At the very outset, I would like to give credit to the Pakistan’s military strategists, who I have criticised more often in my writings. Back in 2012 while doing my background interviews for my book I was told by a serving general that Pakistan would have to make a choice between the US and the China bloc soon in the future than it was earlier expected.’ Of course, the general was talking about the strategic alliance which though existed for many decades but still Pakistan was considered to be America’s policeman for the region particularly since 1954. I did not argue with him that why Pakistan cannot have peaceful coexistence with its neighbours and declare itself as a neutral country in the tug-of-war at the international theatre.
So, when President Zardari signed off Gwadar to China towards the fag end of his term in 2013, it was no surprise to me. This has given China access to the Indian Ocean and easier connection to Central Asia and Iran. One of the most important projects of the China-Pakistan Economic Corridor (CPEC) is the building of a motorway from Gwadar to the Chinese Xinjiang province via the Karakoram Highway. It would be the shortest route to connect western China with the seaport. Gwadar is sitting on the door of the Persian Gulf which is the major oil route. It is the major success of China’s maritime geostrategic policy.
And equally, it was also no surprise that the present government signed off the CPEC agreement on the dotted line without negotiating a better deal for Pakistan. Now when the euphoria about CPEC agreement is mellowing down, reports have started coming in that in the long-term Pakistan will have to pay heavily for not guarding its interests.
For unexplainable reasons, the government has kept confidential the information regarding the financial structuring of the various projects being undertaken under the CPEC agreement. But what has leaked out is the fact that the power projects would be given 17 percent return on equity and that the loan by the China Development Bank would be at the rate of 6 to 7 percent, which is much higher than what we could get from the multilateral agencies. At the same time, the government has waived the condition to call for competitive bidding.
The deal about constructions of the four economic corridors is being kept shrouded in secrecy. There are many questions which are being legitimately raised regarding y don’t know the financial structuring of these infrastructure projects including what would be the equity of Pakistan for of the land acquired by it for these motorway projects; what would be the Chinese investment and it would be done through which companies; how the cost of these projects would be met; would they be on the basis of build-operate-and-transfer; what kind of toll tax has been envisaged by the government.
Those who support the CPEC deal have a simple answer: ‘beggars are not choosers’. Their logic is also simple that Pakistan needed investment in the power sector and communication infrastructure and China which is a dear friend was the only one willing to give it. To some extent that is true. All the Chinese investment is going to add the creation of goods and services which will ultimately reflect on the growth of GDP. But the fact that the Chinese have been given a tax holiday and many other such facilities may ultimately not bring the desired benefit to Pakistan’s economy and the people at large. The taste of the benefits of this investment agreement should be ultimately judged against how much benefit it will accrue to the people of Pakistan in terms of the rise in per capita income and employment.
For China, it serves its ‘One Belt One Road’ policy as it wanted to expand its influence in the West of the country. For Pakistan, it is also more than an economic deal. It is an attempt to create deeper strategic interests of China in the country to counter the growing India-US strategic axis.
One of the major reasons of strong China-Pakistan relations is thus the latter’s geostrategic position, although the common border between the two countries is only 523 km. Pakistan, a weaker and smaller state compared to its declared adversary (India) needed support to balance its standing with India.
Some of the primary reasons for stable relations with China are: first because the Chinese have always been patient with Pakistan; second, they do not interfere in the tumultuous domestic politics of Pakistan; and third, they see Pakistan as a counter-balancing force to India.
Pakistan-China relations were best explained recently by an authentic 2012 National Defense University (NDU) report as following, “Pakistan-China relationship is unique and enduring. Both countries have a different belief system yet the friendship is bound by a high level of trust. It has matured into a comprehensive partnership at multiple levels, especially in the political and security domains. While it is recognised to be of crucial importance for the National Security of Pakistan, it is of equal significance in the regional security considerations of Beijing. The defining moments in the Pakistan-China relationship can be traced back to 1956, the year of first high-level visits and 1963 Trans-Karakoram Tract Treaty.” (My emphasis)
The Chinese support during Pakistan-India 1965 war was the real turning point. The Pakistani establishment was pretty disappointed with the US which had stopped military supplies on the ground that Pakistan had violated its undertaking that arms given to it will not be used against India.
During the 1971 Pakistan-India war, China again supported Pakistan. It blamed that India had interfered in the domestic affairs of Pakistan. China “continued to supply military equipment under existing agreements and extended political support to the Pakistan position in the United Nations.
Thus, for Pakistan CPEC is not only of economic importance, as the name suggests, but it is also an assurance that the world’s second-biggest economic power would support it against any possible Indian aggression. The fast-growing strategic dialogue between the US and India is further pushing Pakistan in the China camp.
Daily Times, March 26, 2017