For China, China-Pakistan Economic Corridor (CPEC) is a geopolitical game-changer – the biggest success of Chinese expansionism, and for Pakistan, it is a life-time opportunity and its last chance for economic modernisation.
For the last 18 months, the US$60 billion infrastructure project has been both a source of interest and concern even as there has been a global debate over its potential and problems.
China appears to be backing away from its initial financial promises to Pakistan under Beijing-financed CPEC, amid rising corruption and terrorist attacks on Chinese engineers.
According to Asia Times, Pakistan Army is set to take near-total control of the CPEC in a bid to reassure Beijing that their investments will be more secure amid terrorist attacks on Chinese engineers and others facilitating the infrastructure projects.
The new bill comes at a time when reports suggest that China is slowly retreating from its promises.
Overall lending by the state-backed China Development Bank and the Export-Import Bank of China declined from a peak of USD 75 billion in 2016 to just $4 billion last year. Provisional 2020 figures show that amount shrunk to around $3 billion in 2020, according to data of Boston University researchers in the United States.
The belt-tightening is believed to be in line with Beijing’s so-called “rethink strategy” for its US$1 trillion BRI, which is under broad fire for “structural weaknesses” including opacity, corruption, overlending to poor countries resulting in “debt traps” and adverse social and environmental impacts, the Boston University researchers said.
Pakistan Prime Minister Imran Khan, whose government is criticised for being under military control, is also facing flak in his country for not prioritising and expediting big-ticket Chinese infrastructure investments, Asia Times reported.
In 2018, Imran Khan had put on hold several CPEC projects suspecting corruption by the previous government. However, two years later, several of his Cabinet members were named in big corruption scandals involving the country’s power sector. About one-third of Pakistan’s power companies are involved in Chinese projects under the CPEC.
The 278-page inquiry report, compiled by the Securities and Exchange Commission of Pakistan (SECP) and presented to Imran Khan in April, unearthed alleged irregularities worth over USD 1.8 billion in subsidies given to 16 independent power producers (IPPs) including those belonging to Imran Khan’s advisors Razak Dawood and Nadeem Baber, Asia Times said.
The SCEP had also investigated the profits earned by the Chinese power companies. The report revealed that Huang Shandong Ruyi Pakistan Ltd (HSR) and Port Qasim Electric Power Co Ltd (PQEPCL) were together overpaid by 483.6 billion rupees (USD 3 billion).
Terrorists in Balochistan province, meanwhile, have intensified their attacks on CPEC projects and Chinese nationals working on them, raising the security costs and political risks of the projects. Islamabad’s move to give the military more control over the scheme is a clear attempt to mollify China’s rising security concerns.
(With inputs from agencies)