Economic Growth or a Debt Trap for Pakistan: Cpec Can Be a Mega Disaster for Pakistan

By Dr. Shabir Choudhry

With the CPEC, Pakistan may have a new infrastructure on its land, but it is for the Chinese goods and lorries; and to advance the Chinese global agenda. Aim of the CPEC is not to empower Pakistan and its people.

In view of many Pakistanis, this new relationship is not an economic partnership with China. It is a new form of colonialism, but if the Pakistani ruling elite, and people of Pakistan are happy with this new relationship then no one from outside can help them.

• Language: English
• Publisher: AuthorHouse UK
• Release date: Oct 27, 2018
• ISBN: 9781546297581

Dr. Shabir Choudhry

Dr Shabir Choudhry is a renowned Kashmiri intellectual, writer, scholar and a senior leader of United Kashmir Peoples National Party. Throughout his adult life, he has championed the cause of united and independent Jammu and Kashmir with secular and liberal society. He has courageously spoken for the rights of minorities and oppressed people, and has been a victim of Pakistani establishment.

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© 2018 Dr Shabir Choudhry. All rights reserved.

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Published by AuthorHouse 10/25/2018

ISBN: 978-1-5462-9757-4 (sc)

ISBN: 978-1-5462-9758-1 (e)

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CONTENTS

1. Preface

2. Foreword

3. Introduction

4. IS CPEC ‘China Punjab Execution Corridor’?

5. Economic growth or debt trap

6. Can CPEC promote India Pakistan friendship?

7. CPEC and foreign policy of Pakistan

8. Why America oppose IMF funding to Pakistan?

9. Is Pakistan becoming a client state? Dr Shabir Choudhry

10. IMF package, Pakistan and CPEC, Dr Shabir Choudhry

11. Pakistan needs to live in a real world. Dr Shabir Choudhry

12. Imran Khan, CPEC and Pakistan economy, Dr Shabir Choudhry

13. Will CPEC end deprivation of Balochistan?

14. Grey list and Pakistani economy

15. CPEC and new imperialism

16. Counter narrative on CPEC, Dr Shabir Choudhry

17. CPEC and geo political realities

18. Is CPEC neo colonialism? Role and responsibilities of World community in protecting our natural resources.

19. CPEC is not designed to empower local people

20. CPEC and the Indian concerns

21. CPEC- a relation of dependence. Dr Shabir Choudhry

22. CPEC will be a mega disaster, Dr Shabir Choudhry.

DEDICATION

This book is dedicated to respected late Naila Khaneen, daughter of Jammu and Kashmir, who from the platform of United Kashmir Peoples National Party challenged forces of occupation in so called Azad Kashmir and in Gilgit Baltistan. In a conservative society of Pakistani Administered Jammu and Kashmir she boldly came out to lead the Movement for united and independent Jammu and Kashmir with democratic and secular society.

Also, she courageously challenged those who wanted to promote extremism, violence, hatred and religious intolerance; and encouraged women to take active part in this struggle.

May Allah SWT bless her soul.

Dr Shabir Choudhry, London October 2018

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1. PREFACE

Writing on current affairs, and especially on projects like China Pakistan Economic Corridor (CPEC) and Belt and Road Initiative (BRI), which have international ramifications; and which affects politics and economies of dozens of countries, is not an easy task. Politics of countries or situations related to the projects change frequently, and that transforms the entire view point.

In my last book on the CPEC, ‘Is CPEC Economic Corridor or a Strategic Game Plan’, I explained in detail how this mega project will affect legal, social, political and environment situation of Gilgit Baltistan, and so called Azad Kashmir, areas that are legally not part of Pakistan.

As Pakistanis are least concerned about plight of the people of Gilgit Baltistan and so called Azad Kashmir, in my new book, ‘Economic Growth or a Debt Trap for Pakistan’, I have tried to explain how the CPEC will hurt Pakistan and the Pakistani people. I did this in hope that the thinking people will realise that the CPEC will hurt them and their future generations; and may protest either to annul the project or get better terms and conditions.

During the United Nations Human Rights Council’s 39th Session in Geneva, I had an opportunity to listen to speeches of the Baloch leaders and personally interact and interview them. Apart from Mama Qadeer Baloch, Professor Naela Qadri Baloch and Karima Baloch, I also spoke to Munir Mengal and Bilal Baloch.

Professor Naela Qadri Baloch is a matured and energetic human rights and a political activist. She knows how to get her message across effectively. While talking to me she said:

I wish China and Pakistan also treat us as human beings. We are just like other human beings with feelings. We also get hurt when we are tortured or when our relatives and brothers are abducted, tortured and killed. Tens of thousands of our people are missing. We don’t know if they are alive or dead.

I could see pain in her eyes. She was clearly upset. She further said:

Since the CPEC, brutality in Balochistan has intensified. We also hold the CPEC responsible for our miseries and suffering. To us it is not an economic project, it is a project to kill our people, control our resources, control Gwadar and influence trade and politics of the region. There is insufficient clean drinking water in Gwadar. Now because of the influx of the Chinese and non - local people who are settling here, demand for clean drinking water has risen very sharply. In order to provide water to the Chinese and non-local people, the local people are deprived of the water which belongs to them.

It is not possible to give account of everything what the Baloch delegation said about the CPEC, and about the sufferings of the Baloch people. However, I just want to add one more quote from Professor Naela Qadri Baloch. She said, ‘today we suffer, and if China has its way then people of Pakistan will suffer too. In fact, the entire region will suffer, and they will regret for remaining quiet’. ¹

In writing this book, I have benefited from wisdom of many friends and colleagues. They encouraged me to continue; and must not care for the critics. Their criticism indicates what you are saying is hurting them; and they have activated their social media brigade to attack you.

I must thank Sardar Shaukat Ali Kashmiri, Chairman of United Kashmir Peoples Party for his unreserved support and advice. I am also greatly indebted to Claudia Wadilich, who is a German Lawyer, writer and human rights defender. She specialised in diplomacy and criminology. She is also a Secretary of a Think Tank NGO Balochistanproject, registered in Illinois, USA.

It is honour for me that she is also among my admirers; and she has kindly agreed to write a foreword for this book. I am grateful that from her busy schedule she managed to find some time to go through my book, and write a Foreword.

Last, but not least, my wife and children who have always supported me through thick and thin. Without their help and support, I could not have continued my struggle for united and independent Jammu and Kashmir; and completed many tasks of writing books.

I hope this book will provide a different narrative to readers what has been advance by the officials of Pakistan. Also, I hope this book will help people to understand merits and shortcomings of the CPEC.

Dr Shabir Choudhry,

Chairman South Asia Watch, London

06 October 2018

Reference:

1. Professor Naela Qadri Baloch is a renowned human rights activist, and I met her in Geneva during 39th Session of the UN Human Rights Council.

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2. FOREWORD

by Ms Claudia Wädlich

claudia%20(IMAGE%2001).jpg

The well-known human rights defender and author of many books on Jammu and Kashmir, terrorism and India Pakistan relations, Dr Shabir Choudhry presents one of the rare few true, independent analyses of the CPEC, the China Pakistan Economic Corridor, with this highly interesting volume on CPEC.

The CPEC, which once has been the second name of the East India Company, with corresponding consequences of a first economic colonization. Think-tanks often serve one side or the other. That makes their views and judgments biased in favour of one party. Genuine writers and thinkers should preserve their independence, and present the whole truth.

Also, they should offer assistance by pointing out misleading and one-sided politics, and promote and facilitate peaceful and practical solutions that disputes could be resolved to the satisfaction of the aggrieved parties.

Exactly this task comes with the author with bravura. As a responsible person of a think-tank, Balochistan Project, I can only confirm that sometimes one has to sit on all chairs, because you neither follow one side, nor the other. Painfully, and somewhat frequently, the author, Dr Shabir Choudhry, had to learn this too.

However, the controversial issue of the CPEC, with its enormous strategic, economic, and political ramifications, is such a tremendous and unpredictable force, not only for South Asia, but for the politics and future of the entire world. It has all the ingredients that are required for a conflict to become a disaster.

If leaders of the major powers, including the Superpower, American, do not tread carefully on the contentious issues of the CPEC and Belt and Road Initiative, then they can become implicated in a disastrous conflict.

The learned author, in his analysis also brings in Jammu and Kashmir conflict, and how that affects the countries in South Asia. He also shows, how the CPEC can endanger interests of the various parties, and how it can lead to more terrorism and instability in the region.

In particular, I encourage the Government of Pakistan, the Pakistani military, the Government of India and also European governments to engage in this analysis, and play their due role in avoiding a confrontation.

May the author, and esteemed colleagues submit more books that people can make informed judgments on this important matter. They are all a valuable source; and they inspire people to take part in social, political and human rights issues, which can help to alleviate misery and suffering of the people.

Jammu and Kashmir can be proud of its true son, author of this, and many other books, Dr Shabir Choudhry.

I wish him success with this book and with all his future projects.

Ms Claudia Wädlich 02 October 2018

Think tank of NGO Balochistanproject, and a writer.

Registered in Illinois, USA

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3. INTRODUCTION

It is believed John Adam, second President of America said:

There are two ways to conquer and enslave a nation, one is by the sword. The other is by debt.

Logic of the above quote, whoever said it, is that both war and debt are useful weapons to control and influence individuals, tribes and nations. Many strong individuals and nations have done this in the past.

Good thing about China is that they hesitate to use gun to advance their agenda. Perhaps, at present, they don’t feel that powerful to challenge might of America; and don’t want military confrontation with any major power, which can hinder their economic progress.

Systematic and consistent rise of China’s economic, cultural and military power, in view of some strategic experts is seen with suspicion. Like many other great powers, China also takes pride in its history and civilisation, and is gradually extending its power and influence.

However, unlike ‘Western imperialism’, China is not using ‘gunboat diplomacy’; instead Beijing is using its economic muscle, which some call ‘debt trap diplomacy’, and culture to advance its agenda.

Smiling face and economic aid to build infrastructure attracted many developing countries around the world. Apart from building ports, airports, railway lines, dams, factories, motorways, tunnels, bridges etc, China is also setting up Confucius Institutes in the developing world to teach Chinese language and culture.

With combination of these strategies, China is extending its sphere of influence in developing countries. Unlike the gunboat diplomacy, which imposed their culture afterwards, China is softening the ground beforehand that people and society as whole is receptive to Chinese dominance or control.

Beijing knows America and other major powers are carefully monitoring their movements, and if they use force to dominate and enslave others, that will provide America; and some others, an excuse to sabotage the agenda Beijing has in mind. So, it is best to use smile, and economic muscle to assert themselves on the world stage.

Sardar Shaukat Ali Kashmiri, Chairman of United Kashmir Peoples National Party, while talking on the subject of the CPEC and ‘debt trap’, said:

‘Chinese way of investment is different to other countries, and other international financial institutes. They attract developing countries with a development project by making funds available easily; and attach certain conditions, as to what may happen in failure to make payments. The repayment on loans start after 3-4 years of starting the project. The recipient country hopes that after the completion, the project will generate sufficient income to enable the recipient country to pay back instalments.’

He paused, and with a smile continued his conversation:

‘After completing about two thirds of the project, the Chines deliberately start dragging their feet, and slow down work on the project under different pretexts. The Chinese, around that time, offer funds for some other development projects. Incomplete projects are of no use to the recipient country; and they want completion of the projects that the country can start generating income. The country reluctantly accepts new projects, fearing that refusal could result in non-completion of the original projects.’

Shaukat Kashmiri further said:

‘The CPEC will not only cause enormous problems for Pakistan, it will also create very serious legal, social, economic and environment problems for Gilgit Baltistan and so called Azad Kashmir. Also, it can endanger peace and stability of South Asia.’ ¹

It must be pointed out here that Sri Lanka is among those countries, which had to compromise its sovereignty by leasing the Chinese built Port to China for 99 years; and yet China has offered 2 more projects to Sri Lanka. One project is construction of a cement factory, and the second is an oil refinery, which will cost more than $4 billion. Interestingly, despite the previous experience, the Sri Lankan government is seriously considering the offer.

China is spending more than one trillion dollars on its Belt and Road Initiative. Most of this is in the form of loans to the developing countries hosting the BRI projects. The Chinese have mastered art of concluding economic agreements, which are heavily in favour of Beijing. Some countries have spoken out, and called the loans, ‘debt trap’ and new kind of ‘imperialism’.

This is not to suggest that all the Chinese infrastructure projects proved to be debt traps. There are some success stories too. However, those countries which are entangled in quagmire of debt, end up making compromises.

In a seminar held in Geneva during the UN Human Rights Council’s 39th session on 18 September 2018, the panellists asserted that China’s debt trap policy will also have a negative impact on Europe. In their opinion, Beijing has hidden agenda to capture European markets.

Siegfried O. Wolf, Director of research, South Asia Democratic Forum, said, China wants to take over. He said:

‘They want to be a global leader. For us in Europe is a problem, because they want to push us out of the market. For example, Central Asia – If China is providing funds for new infrastructure projects, they have a lot of influence. So, when China sets rail tracks there won’t be any German or French projects. Only Chinese train will run on those tracks….Similarly, when it comes to telecommunications, one of the most under-discussed area is the digital route, the way China sets up fibre optic cables to launch satellites, and to set up their own versions of GPS. So, when China sets a standard for new markets for example, as in Pakistan, it will be difficult for Pakistan to go for German or French technology because they will go for China. So, this will give additional dependence besides the financial interests." ²

The infrastructure projects and corridors of BRI and CPEC are facing opposition and sever criticism because of many factors, including social, human rights and environmental concerns.

Hungarian Former Secretary of State (Dy. Minister) at the Ministry of Foreign Affairs, Istyan Szent Ivanyi said:

I would like to raise awareness about it because it really poses a real and serious threat. China is challenging the world order. The world order is based on clear rules and in the South China Sea, in Djibouti and in Sri Lanka, and many places like Pakistan (CPEC) - it challenges those rules and I want to draw that attention. ³

Dominating the India Ocean is a tall order for China. At present, despite strenuous efforts to assert its influence and power in South China Sea and man-made Islands, the fact is that China does not fully control or dominate South Asia Sea.

In view of the above, some experts point out that, perhaps Chinese threat to the old-world order, established after the Second World War is exaggerated. These experts feel the American and some Indian policy makers are behind this over exaggerated campaign to create obstructions.

Small countries of the Pacific are also facing the Chinese debt burden, and they are coordinating with each other to formulate a united response to the debt crises. In this regard, Tongan Prime Minister ‘Akilisi Pōhiva said:

It is no longer an issue for individual countries because there are small countries who borrowed from China and we have problems with that and the option is to collectively work together to find a way out. ⁴

Tonga’s debt to China is $115M; and collective debt burden of small Pacific Islands is more than $1.3 billion. Tongan Prime Minister fears that failure to pay the debt may result is seizure of important assets. This is not exaggeration of any kind. China has history of taking over strategically important assets. If some appropriate steps are not taken, then there is a serious threat that some more countries may become victims of the debt trap policies.

Growing Chinese - American competition and Pakistan

The British language and culture was imposed on India after the British started their imperial adventure. The colonised people of India and Pakistan, to date, take pride in associating themselves with the British conquests, awards and culture.

Invasion or imposition of the Chinese culture has already begun in Pakistan. A Pakistani writer, Mr Farooq Tirmizi notes it in the following words:

There are the Chinese engineers having lunch at restaurants in Lahore. There is the proliferation of new Chinese small businesses in Islamabad. And, of course, there are the massive Chinese machines and armies of Chinese managers and workers that you can see across worksites throughout Pakistan, if you happen to get close enough to any one of the dozens of Chinese-funded projects that dot the entire country’s landscape.

Whether we like it or not, Pakistan’s economic fate has now been tied to that of China, though how firmly – and for how long – may still be up for debate. ⁵

Some people have an idea what they may get out of the CPEC, if all goes well. However, majority of people are still avoiding this crucial question, as to what China wants to get out of the CPEC? What are the ultimate objectives of making the biggest overseas investment?

People need to look at the following questions:

1. Will this massive borrowing improve Pakistan’s economic competitiveness?

2. Will the influx of cheap Chinese goods help Pakistani industry?

3. Will the infrastructure built with huge amount of debt increase Pakistan’s exports?

4. Will this infrastructure resolve structural problems of the Pakistani economy?

5. Will this infrastructure change work ethics of Pakistani people?

6. Remember, at one time PIA was among the best airlines in the world. What have the Pakistanis done