CPEC: is it complicated?
China has been an indisputable unifier in Pakistan’s politics. The two countries have built great goodwill over many decades. CPEC was supposed to cement this relationship, by adding economic dimensions to the relationship. But now, there is an impression that CPEC-related consensus is eroding in Pakistan. Though Islamabad still overwhelmingly backs the projects, critical voices within PTI government have made themselves heard.
The election of the PTI – which had, on several occasions in recent years when it was in the opposition, raised concerns over transparency and financing of CPEC projects – could be an opportunity to address those concerns. The new government has, by default, acquired some wiggle room to re-negotiate projects that are in the pipeline to maximize economic gains for Pakistan. Besides, more openness can quell suspicions of one-sided agreements.
The opposition needs to act maturely on this issue. Having finally found a talking point that resonates, the main opposition party PML-N– which had negotiated CPEC’s early-stage energy and infrastructure projects in their term – has come out all guns blazing against the PTI. But there is no need to brand the sitting government as anti-China if the incumbents feel that it is prudent to review previous agreements.
Even before concerns were raised in Pakistan, the Chinese government had found itself defending against criticism from the West that Belt and Road Initiative (BRI) projects were fueling indebtedness in the recipient countries. Now, dissatisfaction in Pakistan – the latest grumbling came from a prominent cabinet member, who is among the country’s top industrialists, in the Financial Times – has put Beijing in a tough spot.
Some observers surmise that the new government in Islamabad has kicked up the dust over CPEC just to balance relations with the US. If it is true, it would be akin to the diplomatic see-saw Pakistan has long deployed in its relations with China and the US – tilting one way or the other, depending on circumstances. Others suspect that the CPEC criticism is mainly due to the fact that new government cannot afford continued American belligerence at a time when it may have to knock on the IMF door.
Whatever the case may be, the new Pakistani government has to walk a tightrope on this issue. It should be careful so as not to offend China. It seems that the Chinese government is itself willing to have a fresh look at projects in Pakistan. Critics should welcome such a review – whether it is conducted in the interest of transparency or to rationalize the CPEC portfolio to make projects more commercially and socioeconomically viable.
China and Pakistan both need to make CPEC work. For strategic reasons, Beijing cannot simply walk away from CPEC. The flagship’s failure could be a setback for BRI, which is President Xi’s main foreign legacy. For economic reasons, Pakistan cannot afford to refuse Chinese loans for BOP support and infrastructure development. The new government must take steps to avoid CPEC becoming a strain on Pak-China cooperation in other areas. And for that, it must negotiate better this time.