Dissolving CPEC Won’t Prevent Pakistan From Falling Into China’s ‘debt Trap’: Report
Even though newly-elected Pakistan Prime Minister Shehbaz Sharif’s government has decided to scrap the China-Pakistan Economic Corridor (CPEC) Authority, the step is highly unlikely to prevent a fall into Beijing’s “debt trap”, Islam Khabar reported. Notably, CPEC is a $62 billion project and part of Chinese President Xi Jinping’s flagship Belt and Road Initiative (BRI), which is aimed to build a vast network of roads, railways and waterways across borders to facilitate trade with Beijing.
CPEC was largely supported by ex-Pakistan PM Imran Khan and his Pakistan Tehreek-i-Insaaf (PTI) government took two years to set up the CPEC Authority. However, the group mostly remained dormant as a major part of his political dispensation was not in favour of having another bureaucratic structure.
The reluctance over the authority was so much so that the PTI government did not even fill the chairman position after Asim Salim Bajwa resigned.
Now, Sharif’s government has ordered to dismantle the “redundant organisation” and accused the staff of misusing resources, effectively abolishing the implementation of the controversial transport network expansion programme. The decision was made after Chinese power producers shut down 1,980 megawatts of production capacity following non-clearance of their Rs. 300 billion dues, Express Tribune reported.
Pakistan Planning Minister Ahsan Iqbal has passed the orders to begin the process of shutting down the Authority.
Scrapping CPEC Authority does not address pressing economic issues: Report
The delay in the “potential game-changer” project caused evident discontent among the ministers of the incumbent Pakistan government. The Planning Minister also pointed out that the development of CPEC was “sluggish and unfortunate”, thus, pushing away investors, which was the main attraction when the project was flagged off in 2013. Apart from the overdue, the revolving account for the establishment has been pending since 2014.
Over the years, CPEC projects also faced delays due to taxation policies and the PTI government’s violation of the promises made to China, for example, failing to exempt sales tax on Chinese imports, the Express Tribune reported.
The pressing issues led the Pakistan government to tap into one viable solution, closing the CPEC Authority. However, the move does not address the economic viability and debt sustainability of the project as a whole, Islam Khabar reported. This is mostly because the project is largely driven by the interest of China than Pakistan. The benefits emanating from Pakistan were seen as “incidental.” Also, the cost-benefit analysis indicated that the CPEC was continued by Imran Khan in order to please China.
Further, an analyst, quoted by the publication also said that the projects increased Islamabad’s dependence on China and squeezed Pakistan into a worsening domestic and foreign economic situation. The report concluded that the increased closeness with China was also a bait to be used against India, thus, Islamabad failed to judge that the flawed project was commercial in nature rather than growth and development for Pakistan.
(Image: AP)
