News Analysis |
A report in the UK daily, the Financial Times, has raised new controversy about the China Pakistan Economic Corridor. Some government officials were quoted in the report as expressing reservations over the way CPEC had been negotiated between Islamabad and Beijing. The report was titled ‘Pakistan rethinks its role in Xi’s Belt and Road plan’. It centered on quotes by the advisor to the Prime Minister, Abdul Razak Dawood, for commerce, textiles, industry, and investment.
The finance minister is also quoted later on in the report as saying Pakistan should be careful not to offend Beijing in its ‘review’ of CPEC, adding that Pakistan would not follow in Mahathir’s footsteps. Abdul Razak Dawood is a Pakistani industrialist and politician. He served as the minister of commerce during General Pervez Musharraf’s tenure. He is the CEO of Descon, a multinational company involved in engineering and construction, chemicals, power, and inspection.
The Hambantota port was handed over to Beijing by Colombo after struggling with debt. The port has been acquired under a 99-year lease. This allows China to establish a footprint near the underbelly of India, something which New Delhi is not comfortable with.
Descon has operations in over six countries. He is a now advisor to Prime Minister Imran Khan. Asad Umar, the finance minister, is the former CEO of Engro, another multinational corporation which deals in fertilizers, foods, chemicals, and energy. When Mr. Umar is talking about Mahathir, he is referring to the Malaysian Prime Minister who put a stop to Chinese investments in his country under the Belt and Road Initiative.
Malaysian Prime Minister Mahathir Mohamad has said, “I believe China itself does not want to see Malaysia become a bankrupt country,” fearing that being unable to repay Chinese loans would stall the Malaysian economy. A rail link, connecting the South China Sea with strategic shipping routes in Malaysia’s west and a natural gas pipeline was canceled. The two, comprised nearly $20 billion in investments.
The FT report quoted the advisor to the PM as saying, “The previous government did a bad job negotiating with China on China-Pakistan Economic Corridor (CPEC) they did not do their homework correctly and did not negotiate correctly so they gave away a lot.” A nine-member committee formed by the PM will ‘think through CPEC’, the report further quotes Abdul Razak as saying.
Critics of Chinese investments have also pointed out the acquisition of a port in Sri Lanka. The Hambantota port was handed over to Beijing by Colombo after struggling with debt. The port has been acquired under a 99-year lease. This allows China to establish a footprint near the underbelly of India, something which New Delhi is not comfortable with. Indeed, the financial times report ‘decrying CPEC and how Pakistan doesn’t want to end up like Sri Lanka’ was quickly picked up by India media. The times of India quoted Imran Khan as saying that CPEC deals with China ‘unfair’ to Pakistan.
It is in the interest of Western countries and India to inhibit the progress of the Belt and Road Initiative. Stories such as the ones in the Financial Times and the Wall Street Journal are not unprecedented. Nor will they be the last of their sort.
This is not the first time that criticism has been leveled against the China Pakistan Economic Corridor. A mega-project of such a scale naturally invites questions that need to be answered. These questions often pertain to the feasibility of such projects and the returns from it. However, it must be noted that the nature of reporting in Western and India media about CPEC can be pernicious at times. During the previous government’s tenure, there was a concern that the Western route might get canceled under CPEC.
Cynics argued that CPEC stood for ‘China Punjab Economic Corridor’ instead. Intense media debates ultimately forced the government to call in an All-Parties Conference in which all stakeholders were assured that the Western Route was not getting canceled and that the fruits of the China Pakistan Economic Corridor will be distributed equitably. Similarly, there was a report published in the Wall Street Journal in July of this year which argued that CPEC was leading Pakistan into a debt crisis.
Read more: Pakistan at crossroads & CPEC
As per the report, ‘China has mostly extended loans in opaque deals often contingent on using Chinese contractors. Pakistan is now one of several countries grappling with the financial and political fallout of taking on so much Chinese debt.’ The Chinese Embassy had to issue a statement to rebut the claims made in the Wall Street Journal. The statement said, ‘The report from the Wall Street Journal severely deviates from the facts…The cooperation under CPEC has always adhered to the principles of mutual benefit, equality, and reciprocity.’
Now, with the claims made in the financial times, the government once again had to issue a rebuttal. In an official response, the Ministry of Commerce and Textile rejected the article, especially its title. He said that the statements attributed to the advisor to Prime Minister on Commerce and Textiles had been taken out of context and distorted. The foreign ministers of Pakistan and China held a joint press conference after the three-day talks last week, in which both sides reaffirmed their commitment to the China Pakistan Economic Corridor and to the long-last all-weather friendship between the two nations.
Read more: CPEC in the eyes of an economic guru
More fallacious reports in leading newspapers and journals in Western and Indian media can be expected in the future, as CPEC gets closer to complete implementation. The ‘free media’ in the West or India is often not as free as it sounds. It is in the interest of Western countries and India to inhibit the progress of the Belt and Road Initiative. Stories such as the ones in the Financial Times and the Wall Street Journal are not unprecedented. Nor will they be the last of their sort.