Recently, ace China watcher, Andrew Small, authored report on the current status of the China-Pakistan Economic Corridor(CPEC). At a time when geo-economics is challenging the preponderance of geopolitics, discussions and debates on connectivity initiatives like CPEC is all-important. Hence, the report is an important, timely contribution. Without prejudice to the report, it must be said that CPEC, regardless of its scale, is a significant, transformative initiative for China and Pakistan, and will undergird their relations for a considerable period of time. The report merits both clarification and additions.
Let us start by looking at how both China and Pakistan are committed to making CPEC a success. It is heartening to see that the report acknowledges, to a degree, the need to keep CPEC on track. However, the extent to which Small portrays that CPEC is off-track, is a tad problematic and hence needs to be seen differently. Let’s break it down. Small says that Given the magnitude of the project, both sides will find it essential to craft a narrative of success and progress, even if “their private assessments of its prospects are more pessimistic.”
What this report and other western publications term pessimism, slowdown, and whatnot, I see it as a combination of the three Rs: Recalibration, Reassessment and Reassurance. What China and Pakistan are doing with CPEC is based on recalibration and reassessment that will ultimately lead to better, mutually-beneficial outcomes and reassurance. Two sovereign countries are expected to undergo all that you allude to in your report.
While the report calls a watered-down version of CPEC as somewhat repugnant to its transformative and gargantuan nature, it must be said that tailoring expectations and project designs in-line with ground realities is much more reassuring and sustainable.
Let’s pose a question: should two sovereign nations cobble-up towards implementing workable, advantageous, and sustainable projects, or should they, fearing international criticism, show inflexibility and go for lofty aims without taking into account the milieu on ground? Certainly, most, if not all, will want countries to go for the former. China and Pakistan have, as the report identifies, navigated challenges and impediments in a bid to keep CPEC on track. Let’s face it, plans and goals change; delays and deliberations happen. For example: Did President Bush on the night of 6th Oct 2001 think that US forces would be bogged down in Afghanistan, with no victory in sight for 19 years and counting? No. Nobody thought that the mighty US would consider withdrawal, leaving Afghanistan to handle its own affairs. Similarly, the managers of CPEC on both sides initially did not know what they were getting into or that the tactical challenges would call for recalibration of strategic goals.
Notwithstanding the damaging effects of COVID-19, China and Pakistan did not back down from their vows to take CPEC to the next level. As a matter of fact, it is during the pandemic that CPEC has staged a comeback. For Andrew, the turnaround might be modest, but certainly , the flurry of deals, coupled with the accelerated developmental works in South Balochistan, is emblematic of better things to come. This assertion dovetails with the critique of the author’s refrain that gives the impression that Beijing has failed, or is in for disappointment. It is too premature to make such an assessment. That the pandemic didn’t deter both countries from picking up the pace on the project is all but an indication of the fact that both are committed to expanding the scale of the project.
The report indeed does a good job in outlining some of the political, strategic, and economic hitches that have stifled CPEC. That said, the troubles are certainly surmountable. Let’s look at the strategic factors first. Small makes a good point about the effects of the Washington-Beijing rivalry on CPEC and Pakistan’s ability to walk a tightrope. He argues that CPEC is now a factor in the wider rivalry between Washington and Beijing ; CPEC is being “bound up” in geopolitical tensions rather than “neutral” economic and developmental initiative.” However, Pakistan has been pretty clear on what it wants. In response to Washington’s efforts to ‘convince’ Islamabad about the grievous ramifications of CPEC , Pakistan has doubled-down on not only expressing its support for China, but also vociferously highlighted how its economic future is tied to China. PM Khan has not shied away from defending China during his trips to the US. He also told the US audience that while the US was wasting money in futile wars, China was developing infrastructure. Concomitantly, ties with the US have also improved, as evidenced by Washington-Islamabad cooperation and coordination over the Afghan peace process, and an excellent relationship between PM Khan and President Trump has developed. In short, Pakistan does not want to get into a zero-sum game, and this is what Washington needs to understand. Dr. Mooed Yusuf said in his recent talk: if country A launches 10 projects in our country, we will be more than happy if country b launches 20. This is instructive and reflective of how Pakistan is looking to conduct economic diplomacy.
Also, Both China and Pakistan have repeatedly said that CPEC is open to, and for, all. China was even willing to change the name of the initiative to accommodate India, but India dished out threats, and till-date supports terrorist organizations that have targeted the Chinese and their interests in Balochistan and Sind and want to resist CPEC by force.
Coming to the political squabbling now. Small has indeed pinpointed the correct issues, especially those that were and probably are related to the change of guard in Pakistan. However, those pushbacks should not necessarily be seen as detrimental to CPEC. It is prudent and creditable if the government in Pakistan is looking at making this project greener, less corruption-prone, and more equitable. Papering over these issues in a bid to expedite CPEC might have won the government some brownie points, but might have also resulted in more costs and less benefits. If anything, this seemingly tough period has strengthened the scaffold of cooperation between the two countries.
Small has used an age-old lens to analyze Civil Military Relations related to CPEC. Analyses on CPEC and Pakistan could be enriched if the prism is broadened. Small contends: “The civil-military struggles in Pakistan around CPEC are also effectively over. Where Prime Minister Sharif and the Pakistan Muslim League-N (PML-N) government sought to maintain control over the projects and, implicitly, to use CPEC as a means of tilting the balance a little further in favor of the country’s politicians running the economy, the CPEC authority is now run by a retired general.” However, it must be understood that the CPEC Authority was established to remove hindrances to the project’s smooth progress. It is being headed by a civilian, the general, as the author acknowledges, has retired. Institutional harmony is the key. This demonstrates a solemn commitment by Pakistan to get the job done. After all, it is a national project; disharmony is the last thing that Pakistan needs or can afford.
Two reasons could have propelled the government to appoint a retired army man to head the CPEC Authority. First, is the pronounced security angle to CPEC. The project has to be secured from a number of internal and external threats, which the military understands and continues to deal with.
Second, the ability of the military to navigate bureaucratic hitches, can come in handy in increasing the pace of the project. Islamabad’s objective is to fast-track the project’s completion. This arrangement makes the achievement of the very aim possible.
The author rightly points to the need for Pakistan to reform its economy, especially the power sector. As for reforms, Pakistan’s PM Imran Khan announced that new deals have been signed with the IPPs to reduce costs and circular debt. More reforms are underway in the power sector. Small writes:”“There will likely be at best a handful of special economic zones created, and the process around them has been sluggish. These were once intended as the centerpiece of CPEC’s second phase and as the part of the investment package that would generate exports, jobs, and broader industrial cooperation between the two sides. Instead, opposition from Pakistani business means that the special economic zones are taking the form of smaller pilot projects.”
Though concerns raised over the prospects of the SEZs are somewhat valid, Pakistan has taken steps to leverage the SEZs bonanza. The current government realizes the importance of SEZs. PM Imran Khan, while performing the groundbreaking ceremony of the SEZ in Faisalabad said and I quote: “There are many industries that wish to relocate from China. We had yet to provide them the environment for them to relocate to Pakistan. This special economic zone is that environment that China seeks.”
The government has approved the construction of SEZs, as it deems them important for the future of industrialization in the country. In this regard, the government has included 4 SEZs in its priority list. The focus on the SEZs has been complemented by efforts to improve the business and investment landscape in the country.
While pushing for Doing Business(DB) reforms, the government has established a project management unit at the Board of Investment (BOI), in a bid to facilitate companies and SMEs interested in investing in SEZs. The BOI’s Facilitation Wing has been established to resolve issues faced by businesses. The idea behind reforms is to make it easier for businesses to invest in SEZs and elsewhere. The reforms revolve around introducing online registration, automation, etc.
In sum, it is premature to write off CPEC, or even its scale or to say that Beijing is disappointed. As the report emphasizes, CPEC is invaluable to both the countries. It is for the US to look at the potential of economic connectivity that the project brings with it. Analyzing it through a singular framework is both inaccurate and dangerous. The US needs to understand that CPEC and Pakistan are integral parts of China’s Western Horizon.
Dr. Rabia Akhtar is Editor, Pakistan Politico. She is a nuclear historian, defense and foreign policy analyst. Tweets @Rabs_AA