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CPEC: Fix “system” to get maximum benefits – Jan Achakzai

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Jan Achakzai |

The best news from Pakistan came last week when Prime Minister Imran Khan opened International Airport at Gwadar to cater to big aircraft including world’s largest passenger airliner, the Airbus A380, paving way for making the port region’s transportation hub. The new Airport will be completed with the Chinese government’s grant of $230 million. It is part of the numerous projects in Gwadar being finished by China as part of its Belt Road Initiative (BRI)’s flagship project, CPEC.

China Pakistan Economic Corridor (CPEC) is being billed in public conversation by the PTI Government as a growth engine. However, there have been some concerns that CPEC may have slowed down as admitted by the Pakistan Tehreek-e-Insaaf Minister Hammad Azhar who logically explained the reason: “The Foreign Direct Investment (FDI) inflows resulting from CPEC activities have seen a tapering off because of the temporary gap between the first phase of CPEC being completed last year and the second phase focused on the western regions picking up”. (News, March 31)”.

PTI government is working on poverty alleviation programme learning from Chinese model. China’s miracle is the only and best example of the poverty alleviation for countries like Pakistan to emulate. 

In the shouted hyperbole, like the previous government of PML-N, PTI government is claiming to be committed to CPEC and peddling a narrative that it is trying to link CPEC with the social development of the people.

The Best Part

The top leadership of the government led by Prime Minister, Imran Khan, is absolutely on the same page with its Chinese counterpart to make CPEC a success, and has the will to remove all challenges on its way to execute the project of the century-a multidimensional corridor with auxiliary special economic zones as envisaged and planned by both countries.

Read more: Can Pakistan’s policymakers respond to much-hailed CPEC?

Pakistan’s armed forces are fully backing the project and have raised a force of nearly 15000 men to ensure its security

The Good Part

Work is afoot to execute the vision of the government. Feasibility studies being prepped for the next level of CPEC—special economic zones. The strategic framework agreement of the two countries under the current leadership is to expand to other sectors including agriculture.

PTI government is working on poverty alleviation programme learning from Chinese model. China’s miracle is the only and best example of the poverty alleviation for countries like Pakistan to emulate.

The focal Ministry of CPEC, Planning, Development, and Reform (MoPDR) sorely in need of major reforms: specific and tangible reforms. It is not a mere coincidence that three bureaucrats are at the helms in any government.

However, there are several gaps which are relevant to the CPEC operations and need to be addressed on a war footing.

The Bad Part
  1. As they say, the devil is in the details. Start with the policy: policy is largely framed by those who do not know the policy whether he/she is a bureaucrat or a politician. Usually, section officers are instructed to formulate policies. For instance, bureaucrats and politicians are talking about “one window facilitation” to attract foreign investment, but no one is aware of its technicalities. Similarly, every political leader is raising the slogan that Pakistan is rich in mineral resources but when he/she is asked about the data and the way forward to exploit it, he/she would seem to be completely blank or naïve about it. Rather the bureaucrat would act totally opposite to what is expected and may become an investment barrier through his/her authoritative and dictatorial attitude he/she has inherited from the system, training, and culture. Policy is the nucleus of turning around the destiny of a nation. Here, it is totally missing and somehow run by emulating practices having no relevance or organic expertise. The basic fault is not following the internationally accepted principles to engage “right man for the right job”. But we need subject specialists to formulate the policies.
  2. The focal Ministry of CPEC, Planning, Development, and Reform (MoPDR) sorely in need of major reforms: specific and tangible reforms. It is not a mere coincidence that three bureaucrats are at the helms in any government. It is generally turning out to be the most chronic problem in our institutions that bureaucrats keep on lingering their positions in upcoming governments. The worst part is that such individuals are often implicated in serious allegations of corruption both financially and morally and also incompetent, replete with capacity issues and instead of serving the institutions or the national development, they are just manipulating, maneuvering and playing with other employee’s careers to save their own skin and positions.
  3. A classic case in the Planning ministry is an individual employee who is holding an important position on CPEC, appointed in Nawaz government, he is incompetent, with a plethora of capacity issues. After the inception of Imran Khan government, he started using the top position and grabbed an additional portfolio of being focal person for CPEC. And a number of times he did blunders in explaining the nitty-gritty of financial layout of the CPEC projects and quoting wrong figures carried many times in the top English dailies and International media creating a total confusion on behalf of Pakistani government while annoying the Chinese counterparts as a result time and again Chinese Ministry had to clarify rescuing him.
  4. The story does not end here, the Ministry of Planning has recently advertised a post of MP1 as Project Director for CPEC/Coordinator, with the TORs tailored made for its blued-eye official with the connivance of the top leadership of MoPDR whereas the Ph.D. employees are already working in the MoPDR or in attached departments. The responsibilities could have been assigned to them to perform in a much better way and also this could have saved the emoluments which are wasted uselessly while the government has been clamoring for austerity measures.
  5. Moreover, the first and only official think-tank of the CPEC which works under the Ministry and Pakistan Institute of Development Economics (PIDE) is in shambles because the MoPDR is running the portfolio through bureaucratic mindset/means and thus no potential research has been carried out as yet. The think-tank is rather serving as a refuge for the concerned MoPDR’s employees’ incompetence, and inefficiencies. Such practices put together are the epitome of the bad governance negativity affecting CPEC which is hailed as the lifeline of Pakistan’s economy.
  6. One would have high hopes that this government would chuck out incompetence from the concerned ministry but tapping at the back of such incompetent lot and promoting and rewarding them with praise and prestige are no less than adieu to the slogans of good governance and eliminating corrupt practices. But there are other reasons for that hackneyed bureaucrats and the likes who hold and drag their power positions, a) they are appointed by their backers and supported in order to sustain their dominance in the organisations, 2) incompetent ministers oblivious to the ground realities and who are miles away from serving the nation, appoint favourites to strengthen their own constituencies etc.
  7. The situation in the planning ministry in the previous government was bad but under the current   government, the ministry has beset with the following challenges: failure to understand the portfolio of CPEC, failure to identify bottlenecks, failure to appoint professional employees to the right positions, failure to learn from the Chinese best practices and failure to get rid from the worst practices; these cardinal reasons have been the cause of delay of many CPEC projects. For instance, in the last Joint Cooperation Committee (JCC) meeting held at Beijing in December 2018, many MoUs were not signed because the MoPDR delegation went blank without even preparing the relevant documents etc. Those concerned lot who use classical clichés, busy in press conferences, employ plagiarized write-ups boast and claim to be the sole proprietor of CPEC, are the very people to play with the fate of CPEC.
  8. In addition to loans for short term budgetary support, we are laying emphasis on investment in social development and poverty alleviation programmes—critical for Pakistan—but they are not the projects attractive to Chinese investors. We can do little with both: social sector investment and loans. The right option is to create an environment whereby we could attract the Chinese entrepreneurs through savvy policies aimed at competing with India, Vietnam, Myanmar, and Bangladesh on lower tariffs, management, logistics, labour costs, and ease of doing business.

Read more: NLC & CPEC: A partnership of progress

The Worst Part
  1. After the 18th amendment, provinces have been empowered to device their own investment policies; provincial governments do not want any interference of the Centre—partly, it is because of the undue longing of authority and fishy factors attached to international investments. It is the provincial government which is to allot land for the roads, Industrial zones and grant many other No Objection Certificates (NOC) at whims etc, for the smooth execution of CPEC projects. This very provincialism has proved to be the major bottleneck and the reason for delay in CPEC projects initiation and conflicts. One example is the dispute over construction of eastern/western routes despite running all the routes within Pakistan’s territorial jurisdiction. This led to the issue of blaming CPEC being not inclusive and rather termed as “Punjab Centric”.
  2. There has been no independent evaluation of the Board of Investment (BOI)’s mandate, the employees’ capacity, skills and their experience in attracting both domestic and foreign investment. In the context of CPEC, BOI remains a toothless organization because of provincial autonomy gained under 18th amendment only sending letters pleading compliance with its decision. While meeting the Chinese entrepreneurs and listening to their views, one observes, they are eager to invest in Pakistan but because of BOI’s lack of capacity and capability, they do not get inspired and eventually prefer to invest in India and elsewhere and not in Pakistan. The inefficiencies of BOI coupled with confused 18th amendment is a dilemma happening to be a major irritant in execution of CPEC projects— unfortunately still not being realised by the authorities at the policy level.
Bottom-Line

When the CPEC idea was conceived, Pakistan was termed as investment dry country. CPEC changed this perception to a large extent but we have missed and still losing millions of dollars as we are not providing the basic need of ease of doing business to the Chinese and other foreign investors.

For this to happen, archaic bureaucracy, supra bodies like BOI and 18th Amendment are not the right answers. In other words, the system is broken we need to fix the system to create an investment-friendly environment.

Even if we manage to tailor and twist the Chinese model according to our needs, still a lot can be achieved, the role of the various regulatory bodies of Pakistan can play a pivotal part in creating a baseline for enabling a business-friendly environment. For this to happen, archaic bureaucracy, supra bodies like BOI and 18th Amendment are not the right answers. In other words, the system is broken we need to fix the system to create an investment-friendly environment.

In today’s world, vision-less-sleep walkers are tomorrow’s economic captives. It is for Pakistan to choose its right destiny today. Once in a lifetime opportunity has knocked on Pakistan’s door to be the next Asian dragon by leveraging CPEC and attracting Chinese public and private sector investment through the effort of visionary leadership, right policies, and robust capabilities to create a supportive environment. Are we ready?

Read more: CPEC under PTI: Qureshi discusses progress on megaproject in China

Jan Achakzai is a geopolitical analyst, a politician from Baluchistan, and ex-advisor to the Baluchistan Government on media and strategic communication. He remained associated with BBC World Service. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.