CHINA PAKISTAN ECONOMIC CORRIDOR (CPEC) - BY: Mr. Kashif Mateen Ansari

imageMr. Kashif Mateen Ansari,
CEO Sachal Energy


At the moment CPEC is one of the most significant topics under discussion. It ranges from the drawing rooms to the floors of the National and the Provincial assemblies. Though the CPEC is rightly a game changer in the region and especially, for Pakistan but it has also evoked a lot of positivity mixed with anxiety, unfounded fears, and some rightly-placed apprehensions. As soon as CPEC was announced, there was a visible lobby which lost no opportunity to finding fault with the CPEC, the way it is planned or in the manner it is executed as well as how it moves forward. While we will try to discuss some reservations about CPEC, we will also try to steer our discussion in areas, which are often not yet touched upon in the popular discourse. CPEC has been maligned on various bases ranging from Punjab being the favored beneficiary, to the fears of the Baloch losing their own homeland and becoming a minority. However, if you look at Chinese history for the last thousands of years, China has never engaged with occupational wars, it does not bear any favoritism towards taking over and subjugating other people. The way CPEC Is planned, it is a large infrastructural project having no parallel in the history of Pakistan. It is planned as a network of roads and rail bridges and tunnels and then adding together industrial zones and power generation being the most dominant element of the grand project. Now in the area of power generation we all know that in the early harvest projects, we are looking at almost 10,000 MW of energy ultimately getting to our grids. Already work on grid projects is underway that means the bottleneck created by our old and poorly maintained grid would be solved. New grid lines are being planned and at least a few of the major ones have started coming on ground. Another fear is that the cheap Chinese goods are going to elbow out the Pakistani products. I think this is an unfounded fear because what we are seeing in the core projects of CPEC, they do not relate to any cheap product. First of all we are looking at the power plants. The Pakistani manufacturers and the Pakistani industrial sector have nothing to offer in competition where we can produce the power machinery the turbine generators or the power plants. While we are looking at the roads and the railways most of the raw material in the form of cement and steel will come from the local area economy and once it comes to the construction of these mega projects I believe there is still a division over the underlying sub-contracting between the Chinese and the Pakistani businessmen. However, what we must look at is that, at the moment at many levels Pakistani businesses do not possess the adequate experience and knowledge in high- level engineering and technology. They will be best served by their interaction with the ongoing and the future projects and working in those areas where they have a competitive advantage and yet being exposed to those areas which are traditionally new to us and thus creating new expertise and understanding. The real trade between China and Pakistan will start and as the numbers go we are looking at hundreds of thousands of containers moving over these arteries. Obviously this will give rise to enormous economic activity ranging from the logistics businesses to the services and supplies enroot for the trade convoys going down to Gwadar and I believe that the people living in the far flung areas of the Baluchistan, KP and GB will see unprecedented economic growth which they have never seen before. With the better network of railways and roads they will be connected to the outside world, information knowledge and money will flow-in, opportunities will grow so shall the economy. With the availability of power and increase in the power generation we are sure that the economic activity will grow. There will be remarkable increase in the GDP and the peripheral economic activity will also be stimulated by the availability of the power. There will be a certain cost to it. First of all you must allay the fears about the CPEC being loaded on the weak economic backbone of Pakistan in the form of the costly debt. First of all not all the part of the CPEC is debt, and second, if there is a debt associated with the project that can produce returns in excess of the interest burden of the debt then such a debt can only enhance the economic activity and will not harm the economy in general. Although it is very easy to criticize the CPEC and the Chinese investment marking it as purely debt but if you look back a few years even from my own experience of developing a Wind Power Project, Pakistani projects were struggling to find any financing in the international market. Hence, even the availability of the foreign debt by virtue of CPEC is a positive thing for our economy. However, generally the kind of fear that Mr. Kashif Mateen Ansari CEO Sachal Energy 14 February 2017 is evoked by the perception of the foreign debt actually relates to the debt which is not used for any productive set-up of projects or economically viable project. If a foreign debt is used only to pay off for the largesse or the corruption of the ruling elite then obviously that debt is a trap that would lead any economy to ruin. But in case of CPEC projects, the investments which are coming in the form of debt, will ultimately result in the construction of power plants or the erection of the major grid lines or the network of motorways, rails and roads along with the industrial estates, allied industries and the dry ports, which will have a positive impact on our economy. What we have yet failed to understand is that CPEC requires something more, not only that this is an economic activity creating enormous economic opportunities for the people but also there will be an avenue of the cultural exchange and enhance friendly ties, with not only China but with all the regional players in Central Asia and South Asia. I believe the real long term effect of the CPEC would be the integration of this region in a friendlier economic zone lowering of the restrictions on the movement of trade, goods, and people. It is likely to enhance the cultural exchanges between us, the Central Asian states, China and rest of the South Asia. What we need to look forward to is how we can enhance the technical knowledge and the productivity of our people, how to get ready for the incoming competitions, how to benefit from the enormous opportunities that are going to open in front of us, how not to get carried away by our fears rather to look towards our future with hope and promise. We must also start thinking on the lines that we have to put down the gauntlet and reduce the negativity towards the regional players, though this has to be reciprocated from all sides but nonetheless we have to change the narrative on our side also. We have to bring forth a narrative of peace, a narrative of mutual co-existence and respect for all the players in the region. We have to cultivate and encourage any opportunity to improve ties with India and we must look towards China to help us in settling our dispute over Kashmir and water. We must look towards Afghanistan to help Afghanistan gain stability which in turn would stabilize our tribal areas and foremost we have to equip our young generation with the modern knowledge and tools to be able to take part in economic activity that is now being unleashed from the heights of Himalayas down to the shores of Gwadar.

Posted on Mar 16, 17 | 12:31 pm