The following report was originally submitted as part of my A-level EPQ – for which I received an A* – and was completed in February 2020. Therefore, some of the information may be outdated. Regardless, I hope it proves informative for anyone interested in Sino-Pak relations.
The China-Pakistan Economic Corridor (CPEC) is perhaps one of the world’s largest infrastructure overhauls seen in the last decade. It is comprised of 70 projects, ranging from coal-fired power plants to fibre optic cables, and is currently worth over $62 billion in Chinese investment (Ministry of Planning and Development, 2019; Siddiqui, 2017).
CPEC is the flagship for China’s Belt and Road Initiative (BRI), a global development strategy similar to the US Marshall Plan. It marks the beginning of a new venture in Sino-Pak relations, which already has a strong military and political base. The aim: to ensure sustained economic growth for both Pakistan and China’s western region of Xinjiang.
However, the question must be asked: Is CPEC good for Pakistan?
By this, I mean, is CPEC good for Pakistan economically and politically? This is an important question considering Pakistan’s history as a client state to foreign powers such as the US and Saudi Arabia. These relationships have plunged Pakistan into over $82.19 billion of external debt, with 29.5% of its population below the poverty line (CIA, 2019).
In addition, Pakistan’s involvement in the US War on Terror claimed the lives of over 23,375 Pakistani civilians while leaving the country with several terrorist organisations to deal with (Al-Jazeera, 2018). Meanwhile, corrupt Pakistani officials hoard money in overseas bank accounts while the poor suffer from a crippling economy. It is no wonder we should be concerned with the recent developments concerning Pakistan’s newfound love for China.
Will CPEC break or reinforce the status quo?
That being said, CPEC doesn’t just affect Pakistan; it could have implications for the whole world. Pakistan is located in one of the world’s most strategically important locations. The Indus River has always been the crossroads between civilisations and ruled by great powers such as the Achaemenid Empire, Alexander’s Macedonian Empire, the Mongols, the Mughals and, most recently, the British Raj.
Today, Pakistan borders two of the world’s fastest-growing economies: India and China, not to mention the oil-rich Middle East and mineral-rich Afghanistan. With the Strait of Hormuz only 600km from Gwadar port and direct access to the Arabian Sea, Pakistan will undoubtedly play a crucial role in the global economy with the help of CPEC.
What does CPEC mean for the BRI? And what does the BRI mean for the world and its future?
In this essay, I aim to answer these questions and highlight the steps Pakistan should take to ensure it can get the most out of CPEC.
CPEC Projects
| CPEC PROJECTS | |
| CHINESE-FINANCED PROJECTS | |
| Energy | There are currently 17 priority projects, 3 actively promoted projects and 2 potential projects related to generating and transmitting electricity. These include coal-fired power plants, wind farms, solar parks, transmission lines, and hydropower. The projects are estimated to cost more than $20 billion, with a combined power capacity of around 12.5 GW. |
| Infrastructure | There are currently 5 road projects financed by China, including the Peshawar-Karachi motorway, alongside 3 rail projects, including expanding and reconstructing the existing ML-1 line between Peshawar and Karachi, essentially connecting north to south. These projects are estimated to cost more than $12 billion. |
| Gwadar | A total of around $1 billion is to be invested into the BRI’s flagship project, Gwadar on the coast of Pakistan’s Balochistan province, in the form of: – Gwadar East-Bay Expressway. – New Gwadar International Airport. – Construction of breakwaters. – Dredging of berthing areas and channels. – Development of Free Zone. – Water treatment, supply and distribution facilities. – Pak-China Friendship Hospital. – Pak-China Technical and Vocational Institute at Gwadar. – Gwadar Smart Port City Master Plan. |
| Rail-Based Mass Transit | There are currently 4 mass transit projects in the works, of which 2 are undergoing feasibility studies, and 1 has a completed feasibility study. The final project, Lahore’s Orange Line, is currently under construction and is estimated to cost around $1.6 billion. |
| Provincial | A total of 6 provincial-level projects, including a seaport, 3 roads, a canal and an iron ore mining, processing, and steel mills complex, are currently in the early planning phases. |
| SEZs | There are a total of 9 proposed SEZs throughout Pakistan. None of which are currently underway. |
| Social Sector Development | Alongside the various infrastructure projects, CPEC will also include the following: – People-to-people exchanges. – Transfer of knowledge in different sectors. – Establishment of the Pakistan Academy of Social Sciences. – Transfer of knowledge in the education sector through a consortium of business schools. |
| Technology | A cross-border optical fibre cable was inaugurated in 2018 and cost $37.4 million. A pilot project for Digital Terrestrial Multimedia Broadcast is currently in its planning stages and is estimated to cost around $4 million. |
| PSDP PROJECTS | |
| Western Route Projects | There are a total of 6 motorway projects taking place in western Pakistan. Currently, 3 are in the early stages of development, 1 is under construction, and 2 have been completed. The total cost of all the projects is estimated to be around $2 billion. |
Are SEZs Good for Pakistan?
CPEC is going to see many changes to the Pakistani economy. In particular, under CPEC, Pakistan will introduce new Special Economic Zones (SEZs). These are areas where business and trade laws differ from the rest of the country.
China is helping Pakistan establish a total of 9 SEZs, most likely based on the Chinese model, such as Shenzhen in the Guangdong province and Kashgar in Xinjiang (Ministry of Planning and Development, 2019). Chinese SEZs are export-oriented and primarily driven by market forces. They give special tax incentives for foreign investment and have greater independence from the central government on international trade activities. Furthermore, Chinese SEZs are listed separately in national planning and retain the authority to pass legislation. This gives SEZs the same power as provincial-level administrations regarding economic policy.
Proponents of CPEC put forward the idea that SEZs will bring about economic growth by liberalising the Pakistani economy via increased exports and foreign direct investment.
If there is one proposition with which virtually all economists agree, it is that free trade is almost always better than protection.
The Economist
Why trade is good for you
This is based on the theory of comparative advantage (a country’s ability to produce goods and services at a lower opportunity cost than its trade partners). In short, by liberalising the Pakistani economy, Pakistan will be better off. This is because it will naturally force Pakistan to specialise in whichever industries it has a comparative advantage, such as raw cotton. Overall, this would increase Pakistan’s output in those industries, leading to increased exports and economic growth as a result.
Pakistan would then be obligated to increase trade in whichever industries it lacks a comparative advantage, such as dairy products. This will allow other countries to specialise in whichever industries they have a comparative advantage while trading with Pakistan in whichever industry they lack a comparative advantage. Theoretically, this would increase world output and, by extension, economic growth for all countries (The Economist, 1998).
In China, following the establishment of its first SEZs in 1980 and various economic reforms designed to open up the country to global trade, GDP skyrocketed from $191 billion (1980) to $1.2 trillion (2000) and eventually $13.6 trillion (2018) (World Bank, 2019). China is a textbook case study of how market liberalisation can significantly transform a country’s economic position.
If Pakistan learns from China, there is no reason the country would not also achieve long-term economic growth. Furthermore, the CPEC proposed SEZs are said to have the potential to generate over half a million direct jobs and over a million indirect jobs in Pakistan (Malik, 2019).
However, as seen in the case of the Kingston Free Zone in Jamaica, free trade is not always conducive to the betterment of a country’s citizens. In the 1980s, Jamaican citizens were forced to work in poor conditions on low wages for foreign companies that were not legally required to operate according to government standards.
SEZs worldwide have been responsible for the rampant exploitation of workers and loss of government revenue. Other negative socio-economic impacts include suppressing labour rights, preventing trade unionisation, and poor environmental standards. Evidently, without proper government regulation, the SEZs proposed by CPEC can potentially exacerbate existing problems concerning Pakistani labour. This, in turn, could have severe social and political implications for Pakistan, which already has the third-largest number of people trapped in modern-day slavery at 3.19 million after China and India (Reuters, 2018).
Will CPEC End Pakistan’s Energy Insecurity?
One major obstacle to Pakistan’s economic success is the country’s poor energy provision. Pakistan currently ranks 115 out of 137 countries for reliable electricity, with only 70.8% of the country’s population having access to electricity, leaving over 52 million people without access (CIA, 2019; World Bank, 2019).
Private sector investors see the lack of reliable electricity as a potential risk to profit. And rightly so; in 2015 alone, power sector inefficiencies cost the Pakistani economy $18 billion (6.5% of GDP) (World Bank, 2018). Couple this with the associated social implications, such as increased strain on healthcare and lower quality of education, and you have a recipe for disaster.
When you compare this to the rapidly emerging economy of China, where access to electricity is at 100%, it is clear to see the importance of a reliable energy supply in developing a strong economy (World Bank, 2019). By introducing energy reforms, Pakistan could save $8.4 billion in business losses and increase total household incomes by at least $4.8 billion annually (World Bank, 2018).
Proponents of CPEC claim it will fulfil the electricity demand and ensure the reliability of electricity supply in Pakistan. After all, CPEC includes a total of 22 projects dedicated to energy generation and supply, which, when combined, offer a power capacity of 12.4 GW (Ministry of Planning and Development, 2019). When this is added to Pakistan’s current installed power capacity of 30 GW, there will be more than enough energy to overcome Pakistan’s deficit of 5 GW (Energypedia, 2019). Therefore, in theory, CPEC will fulfil Pakistan’s energy demands and leave room for demand to increase, which is crucial for long-term economic growth.
However, the question remains: does it work in practice?
Of the 22 energy projects, only 8 are fully operational, leaving a significant energy deficit from a lack of power capacity (Ministry of Planning and Development, 2019). Furthermore, transmission inefficiencies frequently lead to blackouts across the country. Pakistan’s transmission capacity sits at 22 GW, well below the country’s current installed power capacity (Rehman, 2018). This slow progress meant CPEC did not achieve its 2020 goal of addressing the bottlenecks in the country’s economic and social development (Ministry of Planning and Development, 2017).
In other words, CPEC has already failed to achieve 100% energy access by its own deadline of 2020. If the country cannot even provide enough electricity for its people, how will it provide enough energy for the second phase of CPEC? Therefore, in practice, CPEC has failed to fulfil its own goals, let alone the electricity demand of Pakistan.
In due course, these projects will be completed. However, if they are to be completed in the same timeframe as CPEC’s second and third-phase projects, there will be dire consequences for the Pakistani economy. Without sufficient energy provision, Pakistan will have to increase energy imports to complete its second and third-phase projects, such as the New Gwadar International Airport, which began construction in October 2019.
This will increase the country’s current account deficit, as seen with the ‘Punjab Speed’ predicament (Rafiq, 2019). As a result, the Pakistani rupee will be devalued yet again, and annual growth will continue to slow. Pakistan will then be forced to seek another bailout from the International Monetary Fund (IMF), the World Bank, and other countries like China.
Even if all the energy projects are completed, they will become obsolete over the long term. Of the 12.4 GW provided by CPEC, 8.2 GW are coal-based (Ministry of Planning and Development, 2019). The negative impacts of burning coal are widely documented. Pakistan is a country with four major cities (Peshawar, Islamabad, Lahore and Karachi) with air quality rankings ranging from unhealthy to hazardous (AQI, 2019). Is it wise to invest in coal-fired power plants? While coal is more reliable and efficient, it will not last forever.
Once Pakistan exhausts its domestic supply of Thar coal, it will have to import coal from abroad, most likely from China. Pakistan already depends on Saudi Arabia and Iran for oil and gas, making up 80% of its energy mix (Energypedia, 2019). Add China to the mix, and Pakistan will become even more vulnerable to the influence of foreign powers and the fluctuating prices of fossil fuels. This is ultimately counter-productive to achieving sustainable long-term economic growth for Pakistan.
Is CPEC a Debt Trap?
Another major issue afflicting Pakistan’s economy is the ongoing debt crisis. Since the establishment of CPEC, Pakistan’s total external debt has increased from around $60 billion (2013) to over $90 billion (2018). However, it is important to note CPEC itself did not cause the debt crisis.
As Pakistan accumulates more debt, the country will have to use more money to service debt in the future. Between 2017 and 2018, Pakistan serviced $7.5 billion of debt, of which $2.3 billion was interest. Due to the increasing issue of debt servicing, the current account deficit increased from $18 billion (2017) to $21 billion (2018) (Rehman & Tahir, 2019).
Furthermore, due to the interest of such debt having reached a high level, Pakistan has had to borrow more money to repay its obligations. Despite declaring he would rather die than go to the IMF seeking a bailout, Pakistan’s Prime Minister Imran Khan was forced to turn to the IMF for $6 billion in the face of a weak economy, making it the 12th time Pakistan has had to rely on the IMF (Bokhari & Findlay, 2019).
Pakistan is in the midst of a perpetual cycle of debt, which must be addressed if the country ever wants sustainable long-term economic growth. Will CPEC exacerbate or relieve the debt crisis?
Proponents of CPEC are often quick to point out the insignificance of Pakistan’s external debt to China, which is currently around $6 billion, less than 6% of Pakistan’s total external debt (Khawar, 2019). In fact, the majority of Pakistan’s external debt is owed to multilateral lenders such as the IMF and the World Bank (Masood, 2019). However, nobody calls these organisations a ‘debt trap’ despite having plunged many more developing economies into debt than China.
On the contrary, CPEC offers increased trade, allowing the country to repay its debt in the long term. Pakistan is forecasted to collect between $6 billion to $8 billion from CPEC toll taxes and rental fees, with 4% of China’s total trade ($154 billion according to 2015 figures) passing through CPEC (Rafiq, 2017). Other lenders do not offer this, making the debt from China less of a burden as CPEC provides the funds to pay it back.
On the other hand, Pakistan is one of 8 countries of particular concern regarding the risk of debt distress (Kugelman, 2019; Rolland, 2019). Furthermore, China has been charging Pakistan interest rates as high as 5% compared to the 2% to 2.5% rate given to other BRI countries (Hurley, et al., 2018). Due to the high cost of electricity and transmission losses, Pakistan would also have to pay Chinese companies for electricity Pakistani distribution companies cannot afford, resulting in a currency crisis as Chinese companies move money outside the country.
In addition, an increase in CPEC-related imports combined with decreasing exports, as the Pakistani market is flooded with Chinese products, could push the country further into a currency crisis. Therefore, it is fair to say while CPEC represents an opportunity for Pakistan to end the debt crisis, it also poses a risk of falling even deeper into it.
There is also the concern that if Pakistan cannot repay Chinese loans, China may begin seizing assets as it did with Hambantota Port in Sri Lanka (Kugelman, 2019). Thereby compromising Pakistan’s sovereignty and robbing the country of potential revenue. However, the likelihood of this occurring is very slim.
A study by the US-based Rhodium Group found most of China’s debt renegotiations end with the debt being completely written off (Kratz, et al., 2019). Furthermore, China’s long-standing political and military relationship with Pakistan, which saw the joint development of the JF-17 Thunder fighter jet, Al-Khalid tank and Pakistan’s nuclear infrastructure, makes asset seizure all the more unlikely for Pakistan.
If Pakistan can utilise CPEC and policy reforms to increase exports, there is no reason why the debt crisis cannot be solved in the long term. Therefore, the argument that CPEC is a ‘debt trap’ is not entirely fair. CPEC itself did not cause the debt crisis. CPEC itself will not exacerbate the debt crisis. CPEC itself will not even relieve the debt crisis. To pin all the responsibility on CPEC is neither fair nor well-grounded. It is, in fact, Pakistan’s own economic policy that will determine whether the country remains in debt, not CPEC.
Does CPEC Favour Punjab?
Since Pakistan’s creation in 1947, the country’s politics have been dominated by the Punjab province. Of Pakistan’s 342 seats in the national assembly, 174 seats are reserved for Punjabi politicians, as Punjab makes up the majority of the country’s population. By dominating the lower house of Pakistan’s parliament and contributing to 57% of the country’s GDP, Punjab has proven itself to be the most influential province of Pakistan (Dawn, 2010).
This has led to controversies in the past. For example, the proposed Kalabagh Dam has been debated for the last 40 years. The project is advocated by Punjab-based power brokers but has been opposed by politicians from the country’s smaller provinces, such as Sindh, which sees the project as a threat to its water security. Therefore, it is a viable concern CPEC may favour Punjab over the other provinces of Pakistan.
Proponents of CPEC tend to claim all Pakistani provinces will benefit equally. Following the 18th amendment to the country’s constitution in 2010, many powers were devolved at the federal level and given to the provinces (Hussain, 2019). It was seen as a step towards democracy, allowing the smaller provinces greater autonomy from the Punjab-dominated centre.
As a result, when it comes to CPEC projects, parliament only provides oversight and is not responsible for coordination and decision-making (Rafiq, 2017). It is down to the provinces to plan and execute projects with China. Therefore, it is argued the notion of CPEC favouring Punjab is a false narrative. Due to the devolved power, all the provinces are in the same boat regarding CPEC.
On the other hand, given the history of Punjab’s dominance politically, economically, and socially compared to the rest of Pakistan, Punjab remains the most equipped and desirable province to absorb investment from China. This has led to two major controversies concerning CPEC’s lack of transparency and alleged favouritism towards Punjab. Despite being resolved, these issues have fuelled an overall distrust of Punjab amongst Pakistan’s other provinces.
The first controversy began in 2014, when politicians from the Khyber Pakhtunkhwa (KP) province began claiming the CPEC route had been shifted from KP towards Punjab, thereby excluding the region from Chinese investment. The original route proposed in 2006 passed through the impoverished areas of Balochistan, southern Punjab and central KP, including the provincial capital of Peshawar (Bengali, et al., 2015; Rafiq, 2017).
Following the rise of the Tehrik-e-Taliban, which grew to threaten most of KP, the route was changed to avoid KP. In response, Pakistan Tehreek-e-Insaf (PTI) held a dharna to dislodge the Pakistan Muslim League (PML-N) for electoral fraud with the alleged support of a former Inter-Services Intelligence chief. In 2015, politicians staged a walkout from the Senate. To placate critics, the government proposed CPEC would have three routes (Eastern, Central and Western). By 2017, the issue was resolved. However, the debate may resume should there be another change in government (Schwemlein, 2019).
The second controversy is centred on the Orange Line in Punjab’s capital of Lahore (Rafiq, 2017). When CPEC formally launched in 2015, the mass transit rail line stood out as a municipal project amongst largely intercity and interregional connectivity-focused projects. This led to an outcry amongst the smaller provinces of Pakistan.
No Pakistani city outside Punjab’s jurisdiction, except Islamabad, has a mass transit system. Including it as part of CPEC, despite having to be subsidised at $160 million per year to keep fares affordable, is a clear example of CPEC’s favouritism towards Punjab (Dawn, 2016). Following the controversy, it was asserted that the Orange Line was not part of CPEC; instead, it was a bilateral agreement between the Punjab government and China planned four years prior.
It was not until December 2016, following document leaks confirming the project had been on the CPEC agenda early on, that the Orange Line was formally added to the Planning Commission of Pakistan’s list of CPEC projects (Rafiq, 2017). Following this, additional municipal rail projects were added in Karachi, Quetta and Peshawar to appease the smaller provinces (Ministry of Planning and Development, 2019).
Will Gwadar Port End Baloch Separatism?
Balochistan has proven itself to be a difficult province for the Pakistani leadership to handle. The conflict goes back to 1948, when Kalat, a princely state that used to make up most modern-day Balochistan, acceded to Pakistan. The Khan’s brother opposed the move, and since then, multiple insurgencies have been fought against Pakistan. However, it was not until the latest insurgency following disputes between the Rajiha, a subtribe of the Bugti tribe, and the government over natural gas concessions in 2003 that anything close to a unified Baloch revolt occurred.
By 2013, the insurgency subsided but is still said to be operational in the Awaran region and Makran coast (Rafiq, 2017). With CPEC’s flagship Gwadar port located on the Makran coast, Baloch separatism poses a considerable security risk. Will CPEC placate or provoke the Baloch separatists?
Proponents of CPEC put forward the idea that making Gwadar the focal point of the economic corridor will bring about economic growth and social development for the people of Balochistan. Thereby putting an end to Baloch disenfranchisement and, by extension, the broader anti-Pakistan sentiments fuelling Baloch separatism.
Following the 2013 elections, the PML-N had to form a coalition with the Balochistan National Party (BNP). This nationalist party is pro-Pakistan yet wishes to see more autonomy for Balochistan. By maintaining the support of the BNP, the government has been able to move towards more equitable development through CPEC, thereby avoiding an intensified insurgency. Baloch politicians admire China’s ability to rapidly improve its standard of living and see CPEC as a means to uplift the Baloch people if done right (Rafiq, 2017). Therefore, Gwadar port is the only solution for the Baloch insurgency.
However, the BNP still echoes the view Balochistan should have control of its resources. This view is shared by Baloch separatists and has been central to the historical struggle in the province.
Balochistan is home to over $1 trillion of natural resources; however, despite being so mineral-rich, the region has the lowest human development index (HDI) in Pakistan (Baloch, 2015). Any income generated by these resources has primarily been used for the social development of Pakistan’s other provinces, mainly Punjab, rather than the betterment of Balochistan from whence they came.
With this in mind, the BNP has called on the federal government to hand control of Gwadar port over to the Balochistan provincial government (Dawn, 2015). Unfortunately, the port remains in the hands of Chinese Overseas Port Holdings Limited (South China Morning Post, 2013). This could spell disaster for Pakistan. With Gwadar now in the hands of China, resources are bound to leave not just Balochistan but Pakistan as a whole. Therefore, little to no income generated will ever reach the Baloch people. Social development will continue to stagnate, and anti-Pakistan sentiment will worsen.
The nature of CPEC’s interregional connectivity dictates resources are bound to leave Balochistan no matter what. Promising no resources leave the province would be impractical and counter-productive. Instead, what can be done is to ensure Balochistan receives a disproportionally high benefit from CPEC projects to help de-escalate the insurgency and improve its low HDI. Unfortunately, this has not been the case.
Take, for example, the Saindak copper mine project. Only 2% of revenue is awarded to the Balochistan province; meanwhile, the Metallurgical Corporation of China receives 50%, and the Pakistani federal government receives the remaining 48% (Muhammad, 2014). In addition, the Balochistan Mineral Resources Development Board, formed in 2015 to oversee exploration and mining licenses, is indirectly controlled by the federal government. Seven of the nine members are bureaucrats, with only the final two being elected officials (Rafiq, 2017).
This almost certainly indicates CPEC has so far continued the status quo. Until more is done to ensure the social development of Balochistan, the insurgency will continue to pose risks to CPEC.
Will CPEC Improve Pakistan’s Foreign Relations?
It is almost an unwritten rule that when it comes to Pakistani foreign affairs, one has to mention India and vice versa. The Indo-Pak rivalry is virtually iconic in nature, going back to the establishment of the respective countries as they gained independence from the British, resulting in the largest human migration in history. Over a million people lost their lives, and many more were displaced in what is now known as Partition. Since then, Pakistan and India have fought a total of four wars.
Considering South Asia’s tumultuous history, there is a genuine concern CPEC may exacerbate the strained – if not dysfunctional – relationship between Pakistan and its much larger, economically superior neighbour.
Proponents of CPEC point towards the fact CPEC offers the opportunity to foster an economic partnership between India and Pakistan. It is within Chinese interests that as many countries as possible join the BRI as part of the country’s common destiny vision to bring peace and economic balance to the world (Wang & Liu, 2019; Yu, 2019). Hence, China invited India to BRI meetings in 2017 and 2019.
Similarly, Pakistan also wishes for peace with India. Following the flare-up in Indo-Pak tensions during the 2019 Pulwama Attack, which saw cross-border airstrikes carried out by both sides, Pakistan released a captured fighter pilot as a peace gesture (BBC, 2019). Furthermore, Pakistani Prime Minister Imran Khan expressed his wishes for peace following the victory of the Bharatiya Janata Party in the recent 2019 Indian elections, a desire reciprocated by Indian Prime Minister Narendra Modi (Mackenzie, 2019).
Unfortunately, India declined both Chinese invitations. This is part of India’s fear of being encircled by the BRI, thereby being shut out from international trade (Roy, 2019). As a result, India has been reluctant to join BRI negotiations so far, being critical of Chinese activities in the South China Sea and CPEC on the grounds it undermines India’s sovereignty claims over Kashmir (Pandit, 2018).
In fact, this fear has driven India to exploit the instability in Balochistan by publicly announcing its support for Baloch separatists in 2016 in an attempt to sabotage CPEC (Thakuria, 2019). Since then, the Baloch insurgency has been emboldened, leading to increased attacks on Pakistani military personnel and CPEC labourers (Rafiq, 2017).
On the 18th of April 2019, Baloch militants blocked the Makran coastal highway and executed 14 members of the Pakistan Armed Forces (Aamir, 2019). This highlights how, instead of being used as a tool for peace, CPEC has instead been exploited and used to deepen the Indo-Pak divide.
On the other hand, following India’s brutal lockdown in Kashmir, it was China that brought the issue to the UN Security Council on behalf of Pakistan (UN, 2019). This was partly due to the long-standing Sino-Pak relationship but also to protect Chinese interests in Kashmir, namely CPEC. As a result, it could also be argued CPEC, having brought China and Pakistan closer, has proven itself to serve Pakistani interests on the world stage by bringing important issues into the spotlight. Furthermore, the international perception of Pakistan has significantly improved, in no small part due to CPEC, in recent years (Mehmood & Ahmad, 2019).
However, at the time of writing, the Kashmir lockdown continues, and Indian Muslims are now at risk of losing their status as Indian citizens (Al-Jazeera, 2019; Chotiner, 2019). These issues will most certainly lead to more stand-offs between India and Pakistan. CPEC may not solve the many Indo-Pak disputes; however, it has given Pakistan the upper hand in international discourse, that is, the support of China.
Nonetheless, its well-known influence goes both ways, and Sino-Pak relations are no exception. By supporting Pakistan’s stance on the Kashmir dispute, China has effectively bought Pakistan’s silence on the various human rights violations occurring within Chinese borders. Pakistan has failed to publicly address China’s ethnic cleansing of Uyghur Muslims in Xinjiang despite jumping at any chance to call out India (Dhume, 2019). Considering the fact Pakistan was created on the basis of protecting the rights of Muslims and the country’s close ally, Turkey, has denounced China for its treatment of Muslims, this hypocrisy will undoubtedly lead to some future political complications.
Conclusion
In conclusion, it is clear to see CPEC does indeed have the potential to revolutionise Pakistan. Not just economically but socially and politically as well. However, as highlighted, more needs to be done by Pakistan to ensure it can capitalise on this opportunity. Pakistan must ensure it does not fall into the many pitfalls of large investment packages, such as CPEC, which many other developing countries often fall into. It is also important to remember CPEC will not change the status quo on its own and needs the necessary policy changes to be truly effective. As such, I have decided to summarise the key steps I believe must be taken to ensure CPEC yields the greatest rewards with minimal losses.
First, as recommended by Arif Rafiq, Pakistan needs to create a formalised CPEC authority that oversees all investments from China (Rafiq, 2017). This should be led by the Prime Minister with equal representation from all provinces. This will ensure CPEC projects are distributed evenly and improve interagency coordination. As a result, this will build a sustainable consensus in favour of CPEC.
Second, I would suggest the government introduce their own version of China’s Leading Small Groups (LSGs) to supplement the CPEC authority (Rolland, 2019). Every project should have its own LSG that focuses on community dialogue to ensure local residents are kept in the loop, and their needs are addressed. This will significantly improve the public’s approval of CPEC.
Third, Pakistan must scale back on CPEC projects until the energy crisis is addressed. I propose Pakistan put all non-energy projects on hold and introduce more projects focused on increasing transmission efficiency. Once the energy projects are completed and the energy crisis ends, Pakistan should begin work on other CPEC projects. This will help avoid another ‘Punjab Speed’ incident (Rafiq, 2019).
Fourth, I would recommend CPEC place more emphasis on renewable energy. In doing so, Pakistan can ensure a sustainable energy supply, which will help foster long-term economic growth. Introducing solar panels on a local scale will be especially effective in rural communities. In fact, Balochistan has a solar power potential of over 2,200 kWh/m² per year, making it the ideal location for concentrated solar power plants (World Bank, 2020).
Fifth, CPEC should invest in more welfare projects on the local level, especially in Balochistan. This will help ensure the correct social development measures are being taken to improve education and healthcare provision throughout Pakistan. As a result, Pakistan’s HDI will increase along with household incomes. Thereby, CPEC will be able to alleviate poverty and contribute to the betterment of Pakistani citizens.
Sixth, Pakistan must review its economic policy to increase government revenue and protect workers’ rights, especially in SEZs. By doing so, Pakistan will end the debt crisis and ensure Pakistani citizens are not exploited by foreign companies. More importantly, it will provide the government with the necessary funds to continue social development throughout Pakistan.
Lastly, Pakistan must ensure peace with its neighbours so CPEC can continue unhindered. To do this, Pakistan must invite its neighbours to the negotiation table and discuss how Pakistan can facilitate trade between South Asia and the wider world. One example would be connecting Afghanistan to CPEC via an Afghanistan-Pakistan economic corridor (Rafiq, 2017). Thereby giving Pakistan access to Afghanistan’s natural resources and giving Afghanistan access to the Arabian Sea.
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