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CPEC: Transforming into failure
October marked the CPEC’s 10 year anniversary. As reported by Chinese authorities
the Belt and Road Initiative has resulted in the Chinese government providing almost
$1 trillion in financial assistance to countries which are part of the initiative. An event
was held in Beijing to celebrate the 10th anniversary of the initiative, its successes
were highlighted, however the failures were masked.
The China-Pakistan Economic Corridor (CPEC), one of the BRIs prominent
initiatives, has failed to live up to its statement of ‘promoting bilateral cooperation and
building an economic corridor’. Large scale Chinese loans have only resulted in
putting Pakistan in a debt paralysis, one which harm has the potential of harming
China as well.
The project has two main goals: to connect China directly by land to its energy sector
projects in Pakistan and to revolutionise and technologically transform the partner
nation. The deep-sea oil ports in Karachi and Gawadar are connected to China’s
Xinjiang region. CPEC also circumvents the maritime route which passes through
the South China Sea, it is persistent to mention that it is quite costly and inefficient
and that it lies in potentially contested waters which would be disastrous in case of a
conflict that might arise in the region. The completion of CPEC would save China an
estimated $2 billion in transportation costs and help it secure a permanent energy
supply in the current geopolitical sphere.
Pakistan is the biggest recipient of the Belt and Road initiative funding, this has
resulted in the country being caught in a wave of corruption. China has given up to
$62 billion in funds, some programs that have been successfully established include
the Coal Power Plant in theThar Desert. However, a large number of the funded
projects have encountered issues, reports estimate that 20 percent of the projects
have been cancelled.
Loans have increased Pakistan’s $100 billion foreign debt, 30 percent of which is
owed to just China. Pakistan's conflict with India in the Gilgit region has
also resulted in setbacks for the projects, decades long work has been ruined due to
conflict or natural causes such as flooding or earthquakes. In a bid for foreign
investment the Pakistani government formed Special Economic Zones, however
there have been no investments in the zone from any Chinese firms, probably due to
the smuggling rings present in the zones. Pakistan has shown no increase in its
exports after the establishment of CPEC, starting initiatives would prove not be
beneficial unless Chinese investors follow through and invest in the projects
themselves.