Will Pakistan be caught in a massive Chinese debt trap and eventually become China's colony? What are the terms of Chinese financing and investments in CPEC projects in Pakistan?
Are Pakistanis required to pay exorbitant interest rates on infrastructure loans and unreasonably high return on equity on power plant investments?
Is there an IBM-like organized campaign of fear, uncertainty and doubt (FUD) being waged by CPEC's detractors to convince Pakistanis that it's a zero sum game in which China's gain is Pakistan's loss?
Is there no possibility of win-win in CPEC for both China and Pakistan?
Azad Labon Ke Saath host Faraz Darvesh discusses these questions in Urdu with Riaz Haq (www.riazhaq.com)
https://youtu.be/YZzea9OsC2k
Related Links:
Haq's Musings
Campaign of Fear, Uncertainty and Doubt Against CPEC
CPEC Financing: Is China Ripping Off Pakistan?
CPEC Transforming Least Developed Parts of Pakistan
Pakistan Rising or Falling? Reality vs Perception
Pakistan Generating Positive Vibes at Davos 2018
CPEC to Create Over 2 Million Jobs in Pakistan
Pakistan's $20 Billion Tourism Industry Boom
Home Appliance Ownership in Pakistani Households
Riaz Haq's YouTube Channel
PakAlumni Social Network
3 comments:
#Eurasia, the supercontinent will define this century. #Pakistan #China #CPEC #BRI
https://www.weforum.org/agenda/2018/02/how-countries-can-find-their-place-in-the-new-eurasian-century/
The end of the Cold War was supposed to inaugurate Europe’s age of reconciliations, when the continent, finally at peace with itself, would be able to exist as a unified whole. But reconciliation worked perhaps too well: the disappearance of the Iron Curtain also meant that Europe struggled to differentiate itself from the lands to the east. By expanding it might expand without limits; by retreating it might become an importer of instability.
The decade that brought down the Berlin Wall was also responsible for opening China to global capitalism. Deep value chains were quickly established, together with the infrastructure - both physical and digital - necessary to make them work. It is frequently forgotten that this infrastructure was first developed by Western multinationals and financial institutions.
In recent years, Chinese authorities have increasingly taken on this task and with the Belt and Road Initiative, a development project of unmatched ambition, they intend to be firmly in control. Spanning some 70 countries and requiring investment approaching $4 trillion, the initiative is deliberately intended to reshape the global political and economic order. China's trade with countries along the Belt and Road rose 17.8% year-on-year in January 2018.
Pakistan revives Belt-and-Road projects under Chinese pressure
https://www.ft.com/content/ab809f2c-1101-11ea-a7e6-62bf4f9e548a
China has long faced criticism that its BRI projects burden fiscally weak countries with unsustainable debt. Islamabad is expected to pay $40bn in debt repayments and dividends to China over the next two decades.
Sakib Sherani, former adviser to the Pakistani finance minister, told the Financial Times that CPEC-related debt is “not unmanageable” but cautioned that Pakistan’s ability to meet its debt obligations hinges on increasing exports.
“There is a disconnect. CPEC-related debt eventually must generate enough exports to be able to deal with the repayments,” he said.
Last month US ambassador Alice Wells warned that “China is going to take a growing toll on the Pakistan economy”. She added: “Even if loan payments are deferred, they’re going to hang over Pakistan’s economic development potential, hamstringing prime minister Khan’s reform agenda.”
Beijing dismissed these fears. “Debt incurred from CPEC stands at $4.9bn, less than one-tenth of Pakistan’s total debt. I’m afraid US is not bad at math, but rather misguided by evil calculations,” a Chinese spokesman said on Twitter. “Whatever the US says or does to sabotage our co-operation, China will work with Pakistan for steady progress in CPEC.”
Phase-II of CPEC, flagship BRI project, much broader in scope: Pakistan Ambassador to China
Phase-II much broader in scope: Ambassador
https://www.globaltimes.cn/page/202201/1246043.shtml
GT: The first brick of the CPEC was laid in 2013, it has been nine years, can you comment on the current status of CPEC construction efforts? Tackling the energy shortage was frequently mentioned in the earlier years of the CPEC, how is the situation now?
Haque: The CPEC marks a new phase in Pakistan-China relations by placing economic cooperation and connectivity at the center of bilateral agenda. Being the flagship project of the Belt and Road Initiative (BRI), it aims to enhance connectivity and trade linkages between Pakistan, China and the region through a network of roads, rail, fiber optic, energy pipelines, industrial clusters and Special Economic Zones.
In its first phase, the CPEC has helped us develop major infrastructure and address our essential energy needs. The energy projects which have already been completed include 1,320 megaWatt (MW) capacity coal-fired power plants in Sahiwal (Punjab), Port Qasim (Karachi) and Hub (Balochistan); 660MW Engro Thar coal power project; 1,000MW Quaid-e-Azam Solar Park in Bahawalpur (400MW project is complete while 600MW is under-implementation), and some smaller wind & solar energy projects. A mega, 878-kilometer long, Matiari to Lahore ±660 KV HVDC Transmission Line project has also been completed with the capacity to evacuate 4,000 MW electricity.
It has also upgraded Pakistan's national and international highway network to provide more reliable Pakistan-China connectivity across the Karakoram Mountains and smoother inland communications. The CPEC investment and its spin-off effects have also generated thousands of jobs.
GT: How do you see the current challenges and opportunities facing the CPEC in 2022? What's there to be built in the second phase?
Haque: It is a matter of great satisfaction that despite the challenges posed by COVID-19 pandemic in the last two years, the CPEC cooperation and work on all projects continued unhindered. The recently held 10th meeting of the Joint Cooperation Committee reviewed wide-ranging cooperation under the CPEC framework and identified more areas of cooperation including establishment of a Joint Working Group on Information Technology and Industry, which is expected to support high-quality development of the CPEC as envisioned by the leadership of the two countries.
While the first phase of CPEC was mainly focused on infrastructure and energy projects to cater to the immediate needs, the high-quality CPEC phase-II is much broader in scope and focuses on industrial relocation, agricultural modernization, science and technology cooperation, job creation and our people's socio-economic well-being. We are also making rapid progress on the development of the Gwadar Port and Free Trade Zone, which would promote regional connectivity and economic integration.
GT: What is the current level of third-party participation in the construction of the CPEC?
Haque: As the CPEC aims to promote regional integration and win-win cooperation, Pakistan and China have agreed to welcome and encourage high-quality investments and introduction of advanced technologies and expertise in the CPEC from third-party partners who are ready to work with us for common development.
The two countries are jointly working to finalize a mechanism for third-party cooperation under the CPEC framework before formally processing such requests.
GT: Regional cooperation is a key word for 2022 and BRI construction is also progressing rapidly. How do you see Pakistan's and CPEC's role in this direction?
Haque: Pakistan is one of the earliest supporters and participants of the BRI. We emphatically endorse the spirit and philosophy of the BRI, which seeks to transcend national boundaries and lay bridges for a win-win cooperation and closer economic integration for a shared future.
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