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CPEC: An opportunity or another East India Company?

East India Company never desired to procure foreign investment. Whereas, China’s foreign direct investments in different sectors of Pakistan, make it quite different. Chinese investment of $35 Billion in the energy sector has provided 17000MW of energy which has helped Pakistan overcome energy shortages.

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In 2013, when Pakistan and China deepened bilateral relations and started a major project known as CPEC (CHINA PAKISTAN ECONOMIC CORRIDOR) which has investment of $62 billion (2017 Report). Over these years, we have seen a misconception that CPEC is going to be the modern-day East India Company within Pakistan and abroad (mainly west). I negate the argument, and following I will be explaining how two differentiates under the main agenda; East India Company under the British empire had imperialist nature and exploited the subcontinent for resources whereas CPEC profits both Pakistan and China, also, having objective of industrial and infrastructural development which was never an agenda of EIC but CPEC includes.

Why does the East India Company reference come into being? The West highlighted the phenomenon of surveillance, Chinese domination of local markets, sovereignty compromise at borders, and debt trap which will exploit Pakistan just as at the time of the subcontinent. In this globalized world, all states are not just interconnected but are dependent on each other for various commodities and technology.

Moreover, in the 21st century, big powers seek to have economic security as well as have overseas enterprises to have the agenda of the global economy. Our colonial history is somehow controversial so there were some apprehensions on the actions of China. But the PAK-CHINA corridor is based on a win-win philosophy where domination and invasion of a foreign power into other states becomes meaningless in this century. How will we differentiate between the two when investments and ways of entering into a state refer to the same identity (Economic quest)?

Read more: Pakistan to hold CPEC Int’l conference

1. Monetary stratagem

At the time of the East India Company, the subcontinent was rich in resources and the British only wanted to extract resources under Mughal rulers, whereas, China stepped in Pakistan when it did not have many resources compared to history. The former came into a region known as the Golden Sparrow having 27% of world resources, the latter party made an investment in Pakistan when it had only 4% of resources left in the land. According to Adam Smith, the British followed the policy of Mercantilism, “all for ourselves and nothing for other people, also extracting resources and selling back the manufactured products at high price”, whereas China is following the policy of economic interdependence where both gain by bilateral relations.

China itself has been a victim of imperialist aggression and has a history of non-invasion, being communist state that follows capitalist economic policies; the primary purpose is to make profits for their own enterprise and leave share for the host state. My stance for CPEC- an opportunity is cemented by the case study of the Africa-China partnership, where China has filled a huge gap in infrastructural building (railways, roads, ports, airports) without colonizing the African union as a whole. Also, Chinese investment invites labor from the host state which helps to eradicate the unemployment ratio in Pakistan, which had nothing to do when EIC (East India Company) came to the subcontinent. EIC used inhumane and harsh policies to influence the region, whereas China’s soft power is ruling the world in 21st Century.

2. Accomplishments

According to a survey in 2017, it was expected to increase by 6% in 2019 by a $62 billion project between Pakistan and China. A report by World Bank in 2020 forecasted that Pakistan’s GDP can go as high as possible to 6.6%, a hallmark in the history of Pakistan till 2030. Also, if the transport sector, energy, tax reductions gets a boost from this project the GDP mark could touch 14.6%. Also, the project has helped Pakistan overcome the stigma of “terrorism” and has paved a way for integration within the region along with Afghanistan and Iran. Peaceful rise of China will help Pakistan become a gateway from the Far East towards Europe.

EIC never desired to procure foreign investment. Whereas, China’s foreign direct investments in different sectors of Pakistan, make it quite different. Chinese investment of $35 Billion in the energy sector has provided 17000MW of energy which has helped Pakistan overcome energy shortages. Other than this sector, almost $37 B was involved in the infrastructural building i.e. transportation networks, special economic zones, highways, and railways which helped economic growth within Pakistan.

Read more: China expresses gratitude as Pakistan provides safe environment to CPEC projects

Unlike EIC, having their own labor creates another consequence of Chinese Investments, but this was highly mistaken. However, Chinese investments also invited labor from Pakistan in these projects and it has employed 82% of total labor and is going to create 23 million jobs by 2030 in Pakistan which equally benefits both states. What about individual life? The CPEC project has made other FDI more attractive to Pakistan of about $2.2 B in 2019 which has made Pakistan a robust and developing road economy.

4. Checks and Balances

Formal institutions have been made in Pakistan which was not part of the colonized subcontinent. What power does it have? The powers of these institutions/courts have to ratify and demystify the projects’ wrongdoings and pave a way for smooth functioning without hurdles and corruption. EIC has exercised all the assertive/ influential power in the subcontinent but there are few examples in Pakistan; NEPRA disapproval of increase in power tariffs by Chinese companies, Supreme Court rejection of Chinese company plea to bid in Dasu Hydropower project, and local court banning the Chinese company to control Sost dry port. So it implies that COEC is not an authority ruling in Pakistan for economic exploitation, instead, it’s an economic partnership.

Also, the Chinese billions of investments in Nepal, Sri Lanka, Bangladesh, and Bhutan make China a global economic power and not imperial power to subjugate states for its own interests only. However, loans from EXIM bank of China allow Chinese intrusions in the Economy of Pakistan but it also helps to get rid of staunch policies of IMF and World Bank which are affecting Pakistan for the last 40 years.

Read more: NICL – A Proud Insurance Partner of Government of Pakistan for CPEC Projects

What is the way forward?

The different arguments in favor of CPEC says that China has a strategy of trade/investment and not invading has made us believe that we must face the East where sunrises and not the west where sunsets. This strategic partnership has gone beyond and turned into economic integration because Pakistan has a shared history of good relations with China.

CPEC will open different ways of opportunities in Pakistan and baseless allegations of it being another East India Company has already faded away.

 

The author is an undergraduate student enrolled in bachelor’s in International Relations at National Defense University, Islamabad. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.