Campaign of Fear, Uncertainty and Doubt (FUD) About CPEC

An unrelenting campaign of fear, uncertainty and doubt (FUD) about China-Pakistan Economic Corridor (CPEC) has been unleashed in the media in recent weeks. This strategy harkens back to the aggressive marketing techniques used by the American computer giant IBM in the 1970s to fight competition. As in IBM's case, the greatest fear of the perpetrators of FUD is that CPEC will succeed and lift Pakistan up along with rising China.

Fear, Uncertainty and Doubt (FUD):

A definition of FUD that captures its essence is offered by Roger Irwin as follows: "Unable to respond with hard facts, scare-mongering is used via 'gossip channels' to cast a shadow of doubt over the competitors offerings and make people think twice before using it".

A number of articles in western and Indian media have attempted to use FUD against China-Pakistan Economic Corridor. Some Pakistani journalists and commentators, some unwittingly, have also joined in the campaign.   As expected, these detractors ignore volumes of data and evidence that clearly contradict their claims.

Part of the motivation of those engaged in FUD against CPEC appears to be to check China's rise and Pakistan's rise with its friend and neighbor to the north. Their aim is to preserve and protect the current world order created by the Western Powers led by the United States at the end of the second world war.

Growing Infrastructure Gap:

Development of physical infrastructure, including electricity and gas infrastructure, is essential for economic and social development of a country such as Pakistan. China-Pakistan Economic Corridor financing needs to be seen in the context of the large and growing infrastructure gap in Asia that threatens social and economic progress.

 Rich countries generally raise funds for infrastructure projects by selling bonds while most developing countries rely on loans from international financial institutions such as the World Bank and the Asian Development Bank to finance infrastructure projects.

The infrastructure financing needs of the developing countries far exceed the capacity of the World Bank and the regional development banks such as ADB to fund such projects. A recent report by the Asian Development Bank warned that there is currently $1.7 trillion infrastructure gap that threatens growth in Asia. The 45 countries surveyed in the ADB report, which covers 2016-2030, are forecast to need investment of $26 trillion over 15 years to maintain growth, cut poverty and deal with climate change.

Chinese CPEC Loans to Pakistan:

About 80% of the $55 billion of the Chinese money for CPEC is private investment while the rest is composed of soft loans to the government, according to Shanghai Business Review.

The Chinese soft loans for CPEC infrastructure projects carry an interest rate of just 1.6%, far lower than similar loans offered by the World Bank at rates of 3.8% or higher.

Chinese companies investing in Pakistan are getting loans from China's ExIm Bank at concessional rates and from China Development Bank at commercial rates. These loans will be repaid by the Chinese companies from their income from these investments, not by Pakistani taxpayers.

Rising Confidence in Pakistan:

Pakistani economy is already beginning to reap the benefits of the current and expected investments as seen in the 5.2% GDP growth in the current fiscal year, the highest in 9 years.

The World Bank's Pakistan Development Update of May 2017 says that "Pakistan’s economy continues to grow strongly, emerging as one of the top performers in South Asia".

Rapidly expanding middle class and rising demand for consumer durables like vehicles and home appliances attest to the positive impact of CPEC. Consumer confidence in Pakistan has reached its highest level since 2008, according to Nielsen.

US-based consulting firm Deloitte and Touche estimates that China-Pakistan Economic Corridor (CPEC) projects will create some 700,000 direct jobs during the period 2015–2030 and raise its GDP growth rate to 7.5%,  adding 2.5 percentage points to the country's current GDP growth rate of 5%.

US News Ranks Pakistan Among World's 20 Most Powerful Nations

Countering FUD:

Pakistani government should respond to the FUD campaign against CPEC by countering it with facts and data and increasing transparency in how CPEC projects are being financed, contracted and managed. It is particularly important in a low-trust society like Pakistan's where people can be easily persuaded to believe the worst about their leaders and institutions. 

Summary:

An unrelenting campaign of fear, uncertainty and doubt (FUD) about China-Pakistan Economic Corridor (CPEC) has been unleashed in the media in recent weeks. This strategy harkens back to the aggressive marketing techniques used by the American computer giant IBM in the 1970s to fight competition. Part of the motivation of those engaged in FUD against CPEC appears to be to check China's rise and Pakistan's rise with its friend and neighbor to the north. As in IBM's case, the greatest fear of the perpetrators of FUD is that CPEC will succeed and lift Pakistan up along with rising China.  Their aim is to preserve and protect the current world order created by the Western Powers led by the United States at the end of the second world war.   Pakistani government should respond to the FUD campaign against CPEC by countering it with facts and data and increasing transparency in how CPEC projects are being financed, contracted and managed. 

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Comment by Riaz Haq on December 30, 2017 at 8:32am

INDIA AND THE UNITED STATES SHOULD REVISIT THEIR OPPOSITION TO CHINA-LED CONNECTIVITY
ARIF RAFIQ


https://warontherocks.com/2017/12/india-united-states-need-rethink-...

For the last several months, there has been a concurrent rise in criticism from the United States and India of China’s Belt and Road Initiative — the trillion-dollar, 65-country connectivity project that encompasses the breadth of the Eurasian and Indian Ocean regions.

Shortly after his visit to New Delhi in September, Secretary of Defense James Mattis told Congress that the Belt and Road Initiative was an attempt by Beijing to dictate connectivity and that the project runs through “disputed territory.” His sentiments were echoed weeks later by Secretary of State Rex Tillerson, who insinuated that the project was an example of “predatory economics.” And in its National Security Strategy released last week, the Trump administration — in an indirect swipe at Belt and Road —pledgedto “help South Asian nations maintain their sovereignty as China increases its influence in the region.”

The Trump administration’s more critical posture toward the connectivity project is a departure from its initial tacit embrace. Washington sent a delegation to the Belt and Road Forum in May, while New Delhi boycotted the event, stating that “connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency, and equality” — implying that the Belt and Road Initiative contravenes these norms. India stands out as one of the few Asian countries that have yet to join.

With nearly identical oppositional language now emanating from official and semi-official corridors in India and the United States, a bilateral consensus appears to be emerging.

Given New Delhi’s aspirations to become a great power, its reluctance to embrace projects that seem to advantage Beijing is understandable. But India’s strategic community — as well as U.S. analysts and policymakers influenced by New Delhi’s discourse — ought to revisit some of their complaints about the Belt and Road Initiative and the “closely related” China-Pakistan Economic Corridor (CPEC), as they largely do not hold up to scrutiny. These contentions revolve around a misplaced belief that China’s underlying goals are to exclusively dictate connectivity, deploy a strategic project disguised as an economic one, and redraw India’s borders. In fact, both the Belt and Road Initiative and CPEC are massive connectivity initiatives with a clear economic logic. Far from a coherent effort to establish China’s strategic dominance over its neighbors, the projects are in fact aimed at fueling the next generation of growth both in China and throughout the Eurasian and Indian Ocean regions.

Contention 1: China Is Dictating Connectivity

Along with Mattis, officials in New Delhi have argued that Beijing is aiming to dictate connectivity or impose on other countries a physical dependence on China-bound logistics networks for trade.

These claims wrongly presume a level of coherence to the Belt and Road Inititative as a business model or grand strategy. China-based or Chinese state-owned enterprises are investing in ports and special economic zones in relatively close proximity to one another: Abu Dhabi, Colombo, Duqm, Gwadar, Hambantota, and Karachi. With different project sponsors — the Duqm project in Oman, for instance, is led by companies based in the Ningxia Hui Autonomous Region — it’s unclear how these ports will compete with or complement one another. Rather than a grand strategic plan, the Belt and Road is perhaps better viewed as a series of asymmetrical parts — projects in dozens of countries that may or may not fit together a decade or two from now. As Alexander Gabuev at the Carnegie Moscow Center notes, the initiative “has become so inflated, that it’s no longer helpful in understanding anything about China’s relationship with the outside world.”

Perceptions of Belt and Road as a hegemonic venture also stem in part from its original name: the One Belt, One Road initiative. But Beijing dropped the word “one” from the initiative’s name in 2016 in response to these criticisms, renaming it simply the Belt and Road Initiative. While the change could be symbolic, it does suggest that Beijing is responsive to criticism and its approach toward the initiative can be influenced by external criticism. China is also careful to describe the Belt and Road as an “initiative” and not a “strategy” to emphasize that its objectives are economic, not military.

Similarly, Indian commentators describe CPEC as a Chinese effort to unilaterally redraw the region’s economic geography in Beijing’s favor. Retired Indian Army officer Lt. Gen. PK Singh argues that CPEC “draws Pakistan further away from South Asia towards China.” Indeed, the corridor could very well drive Pakistan away from the South Asian economic ecosystem toward China — though, as I will discuss later, it also provides a potential opportunity for northwestern India to reach western Chinese markets. By boosting economic activity between and along the belt from Kashgar in China to Pakistan’s Arabian Sea coast, linking the world’s second-largest economy with South Asia’s second-largest economy, CPEC is likely to weaken India’s potential to serve as the linchpin of intraregional trade in South Asia. India must reconcile and work with this rather than simply protest. While “India, Inc.” is a global player in banking, information technology services, and energy, it lags behind China in the scope and reach of its merchandise trade. China also offers Pakistan greater potential as an export market. Presently, most trade between China and Pakistan is by sea. But with more efficient and reliable ground connectivity with western China and investment in Pakistani commercial agriculture and livestock industries, Pakistani exporters will make greater use of overland access to China.

Importantly, China is not unilaterally building or financing any roads to Pakistan’s Arabian Sea ports. China is financing and constructing the Gwadar Port and the upgrade of the Karakoram Highway in Pakistan’s Gilgit-Baltistan region, but the new highway networks that actually connect China to these ports in Pakistan are mainly funded by other lenders. The Hazara Motorway, which links the Karakoram Highway to the Rawalpindi-Islamabad area, is funded by the Japan-led Asian Development Bank and Britain’s Department for International Development. The rehabilitation of a section of CPEC’s “western route” in Balochistan was funded by USAID (the road is part of Pakistan’s national highway network and the USAID project was launched well before the road was notionally included as part of CPEC). The corridor’s single-largest road project in terms of cost is a section of the Karachi-Lahore Motorway. One of its other sections is funded by a consortium of Pakistani banks and it overlaps with a highway funded by the Saudi-led Islamic Development Bank. In short, China has no potential unilateral route to the Arabian Sea. It must cross through Pakistan’s national highway network, which is mainly financed by Pakistani and other foreign lenders.

Contention 2: Belt and Road and CPEC Are Strategic Projects Masked by an Economic Façade

Indian strategist Brahma Chellaney has described the Belt and Road Initiative as a form of “debt-trap diplomacy” in which China saddles poor countries with debt they have little odds of paying back, which it then leverages to exact concessions that undermine those countries’ sovereignty and autonomy. Chellaney claims that BRI heralds the “dawn of a new colonial era.” His view reflects an Indo-American consensus, as suggested by Tillerson’s reference to “predatory economics.”

But neither Belt and Road nor CPEC is a strategic ploy masquerading as investments, as some allege. CPEC specifically has a real and powerful economic logic for Pakistan, China, and even India. The corridor does offer China some indirect strategic benefits — it consolidates Beijing’s alliance with Islamabad and reduces its dependence on the Malacca chokepoint. But CPEC is ultimately about economics. It not only raises the potential for cross-border Sino-Pak trade, it also enhances Pakistan’s ability to trade with the outside world beyond China. Most of the nodes that constitute the project’s road network bolster Pakistan’s domestic connectivity and with the outside world.

In fact, the aforementioned Karachi-Lahore Motorway resembles India’s own planned Delhi-Mumbai Industrial Corridor and runs parallel to it. Much like the Indian highway, the Karachi-Lahore Motorway cuts transport time between Pakistan’s two largest cities. There are also planned industrial zones along the route. And the Karachi-Lahore Motorway will be complemented by upgrades to Pakistan’s main rail line.

Not only do the two highways run parallel to one another, CPEC can potentially fill the gaps in between. For example, with the completion of the Karachi-Lahore Motorway in 2020, Karachi could be the fastest route to sea by road for traders in Amritsar in India’s Punjab state. Additionally, with the completion of the Karakoram Highway realignment, traders in northwestern India may also be able to access western China’s markets more readily through Pakistan, potentially reducing the trade deficit with China that India routinely complains about. While India often thinks of Pakistan as an overland trade route to Afghanistan, there is also potential for India-China transit trade through Pakistan.

Indian commentators, such as Singh, also describe the Gwadar port as a strategic project that is not economically viable. But in fact, that is a more accurate description of India’s Chabahar port project. Gwadar may be able to absorb some of China’s transshipment with the Persian Gulf and East Africa and host industries like mineral processing and petrochemicals. Meanwhile, Chabahar is oriented around Afghanistan, a narco-state whose documented economy has grown at an annual average 1.65% over the past four years, according to the World Bank. India has used Chabahar to send food aid to Afghanistan to bypass the Pakistan transit route and replace Pakistan as Afghanistan’s primary source of imported wheat. But the fact that Indian wheat had to be sent to Afghanistan fully subsidized indicates that the prospects for Chabahar-based Afghanistan trade are dim.

Critics of China’s overseas investments point to the case of the Sri Lankan port of Hambantota — the Sri Lankan government was compelled to swap equity in the loss-making venture to China in exchange for debt forgiveness — but ignore the Greek port of Piraeus, which a Chinese state-owned operator has catapulted into one of the world’s top 40 container ports in less than eight years. As Belt and Road rolls out, its infrastructure portfolio is likely to include Hambantotas, Piraeuses, and outcomes in between.

Hambantota, it should be noted, was at its heart a vanity project for the previous Sri Lankan president, Mahindra Rajapaksa. Chinese financers and sponsors went forward with a grandiose project that Western and other multilateral donors and investors would have reje.... The indulgence of foreign rulers is, in fact, a characteristic of Chinese foreign assistance. A study of Chinese aid in Africa shows that it’s far more likely to go toward the home districts of African rulers than compared to aid given by other donors and lenders.

With CPEC, the Chinese appear to be adopting greater prudence, emphasizing the fiscal and commercial viability of projects. While the bulk of the aid is directed toward the Pakistani ruling party’s base of Punjab, the province is also home to a majority of the country’s population and the bulk of its industrial centers. And Pakistan’s railways minister said that when Pakistani officials asked the Chinese for a bullet train, “they laughed at us.”

Contention 3: CPEC Moves Through ‘Disputed Territory’ and Is an Attempt to Reconfigure Borders

Indian and American officials have said that CPEC moves through “disputed territory,” but this is another red herring. The term “disputed territory” refers to the Karakoram Highway that passes through Gilgit-Baltistan, also claimed by India as part of the ongoing territorial dispute over Jammu and Kashmir.

But the Karakoram Highway has been in existence for nearly four decades. Under CPEC, the road network is merely being realigned and enhanced to facilitate commercial traffic. China is also developing hydroelectric power projects in the regions of Kashmir under Pakistan’s administration, Gilgit-Baltistan and Azad Jammu and Kashmir. But the United States and multilateral lenders have previously financed similar projects in Pakistani Kashmir. And India has is planning upwards of $15 billion in hydroelectric power projects in the portion of Kashmir that it controls.

These projects do not alter the boundaries of these disputed regions. And in any event, in Gilgit-Baltistan, the prevailing demand is for greater integration within the Pakistani federation.

Will India Be the Odd Man Out?

Neither the Belt and Road Initiative nor CPEC are manifestations of Beijing’s altruism. Through both projects, Chinese banks are financing the overseas operations of state-owned enterprises that are facing overcapacity and oversupply at home. Foreign countries will gain new infrastructure and electric power that they will pay back through direct repayment or indirectly via electric power bills.

Still, Pakistan is bound to gain from CPEC. The best option for India, as well as Japan, is to compete in areas where they can offer value.

Others in this series have noted the need for more pragmatic realism in Pakistan’s foreign policy, but India too would benefit from a dose of realism about the gap between it and China and what it gains from absolute opposition to the Belt and Road Initiative. In terms of physical infrastructure, India is in many ways better positioned to be a beneficiary of multilateral support than a leader or lender. Its road infrastructure is at least a decade behind China’s. It needs Chinese, Japanese, and South Korean expertise in developing and financing road and high-speed railway networks. India, whose productivity pales in comparison to other large economies, also lacks the ability to build the successful industrial zones that are generally paired with thriving ports.

But India, along with Japan and South Korea, can compete with China on electric power projects and, perhaps down the road, on metro rail transport projects. India and Japan have had success in outcompeting China in Bangladesh’s power sector.

In a previous contribution to this series, Daniel Markey noted that “China’s deeper involvement in Southern Asia is stirring competitive Indian tendencies rather than cooperative ones.” A decade from now, India will have to assess what it has gained in opposing the Belt and Road Initiative and instead spending hundreds of millions of dollars on connectivity with countries like Afghanistan (assuming New Delhi fulfills its pledges on Chabahar). India may find itself to be the odd man out.

India’s interests and regional stability will be better served by a greater effort to look for economic convergences with China and Pakistan. That does not mean India should return to its pre-1962 war naivete and call for Sino-Indian brotherhood (Hindi-Chini Bhai Bhai). The two countries are and remain strategic competitors. But strategic competition has not inhibited trade between the two Asian giants, which grew from $2 billion to $70 billion from 2000 to 2014. India ought to view Chinese investments in Pakistan with similar pragmatism. And to unleash the region’s economic potential, New Delhi should engage Islamabad in dialogue to find pathways toward de-escalation in Afghanistan and Pakistani Balochistan, where India and Pakistan are engaged in shadow wars. By 2019, when the general elections in Afghanistan, India, and Pakistan are complete, deescalation can perhaps yield to a composite bilateral dialogue on resolving outstanding issues — including Kashmir — allowing South Asia’s two largest economies to redevote energy toward regional economic cooperation.

Comment by Riaz Haq on February 21, 2018 at 11:37am

Who’s Afraid of China

http://newslinemagazine.com/magazine/whos-afraid-china/

Ishrat Husain is a former dean and director of IBA and a former governor of the State Bank of Pakistan.

The foremost singular contribution that has already made a significant and visible difference is the addition of 10,000MW to the generation capacity in Pakistan, in a span of four years. It has overcome chronic energy shortages, altered the fuel mix, and substituted plants with 61 per cent efficiency factor in place of those operating at 28 per cent, bringing down the cost to consumers. Electricity outages had cost the economy about 1.5 to 2 percentage points of the Gross Domestic Product (GDP). Export orders were cancelled and the buyers walked out of Pakistan as their traditional suppliers could not fulfil the orders on time, due to energy shortages. The value of exports took a dip, precipitating a balance of payments crisis. As new hydel, renewable, coal-based projects come on board, there will be a corresponding shrinking of imports of furnace oil and diesel.

The associated risk of an additional supply of power is that unless we restructure or privatise the distribution companies, or make the power distribution sector competitive, the circular debt would keep on rising. Distribution losses and non-recovery of dues have put enormous pressure on public finances, and the subsidies on this account may escalate if institutional reforms are not undertaken.

The second area that would benefit Pakistan is the construction of highways and the railway line linking Gwadar with Kashgar and the mass transit systems within big cities. The rehabilitation and upgrading of the main railway line with high speed trains, would relieve businesses of the high cost of domestic transportation of goods to and from Karachi (at present, the bulk of the freight is carried by a trucking fleet). The inner city mass transit systems in Lahore, Peshawar, Karachi and Quetta, would provide safe and affordable public transport to the citizens, who face inconvenience and spend a lot of time and money in commuting to work. The reduced travel time and saving in transportation expenses would increase their productivity and also augment the purchasing power of the lower income and the lower middle-income group.

The western route would open up backward districts in Balochistan and southern Khyber-Pakhtunkhwa (KP) and integrate them with the national markets. The communities living along the route would be able to produce and sell the output from their mining, livestock and poultry, horticulture and fisheries, to a much larger segment of consumers. Their transportation costs would become considerably lower, the proportion of perishables and waste would go down, cool chains and warehousing would become available and processing would become possible in the adjoining industrial zones. Access to a large trucking fleet and containers, with greater frequency and reduced turnaround, time may help in the scaling-up of operations. The fibre optic network would allow the citizens of these deprived districts access to the latest 3G and 4G broadband Internet connections.

Comment by Riaz Haq on February 24, 2018 at 10:25am

Pakistan Scholar Program: 2014-2015 Information and Application

https://www.wilsoncenter.org/opportunity/pakistan-scholar-program-2...


Current Wilson Center Pakistan Scholar

Khurram Husain, 2013-14

Previous Wilson Center Pakistan Scholars

Simbal Khan, 2012-13
Zahid Husain, 2011-12
Huma Yusuf, 2010-11
Dr. Sabiha Mansoor, 2009-10
Amb. Riaz Mohammad Khan, 2008-09
Dr. Samia Altaf, 2007-08
Khaled Ahmed, 2006-07
Dr. Mushtaq Khan, 2005-06
Dr. Ayesha Siddiqa, 2004-05

The Wilson Center

The Woodrow Wilson International Center for Scholars is Washington's only independent, wide-ranging, non-partisan institute for advanced research where vital current issues and their historical and cultural background are explored through research and dialogue. Created by the Congress of the United States as the nation's official memorial to its twentieth-eighth president, the Center seeks to commemorate through its residential fellowship program both the scholarly depth and the public policy concerns of Woodrow Wilson.

Eligibility

This competition is open to men and women who are from, and based in, Pakistan. Applications will be accepted from individuals in academia, business, journalism, government, law, and related professions. Candidates must be currently pursuing research on key public policy issues facing Pakistan, research designed to bridge the gap between the academic and the policymaking worlds.

The Wilson Center customarily expects its visiting scholars to possess the terminal degree in their field. For academics, such as university professors, the terminal degree generally means a Ph.D. But other professions have different terminal degrees; for journalists or businesspeople, it could well be a B.A. In exceptional cases, the Wilson Center will waive the terminal degree requirement for highly qualified and unusually talented applicants. But under no circumstances will the Pakistan Scholar competition be open to anyone currently pursuing a graduate degree or working on a doctoral dissertation.

In addition, applicants must have at least eight years of professional or research experience. Preference will be given to applicants who have published scholarly books or substantial articles in academic or policy-related journals or newspapers.

Applicants must be completely fluent in both written and spoken English.

Length of Appointment and Responsibilities

Pakistan Scholars will be in residence at the Woodrow Wilson Center for the U.S. academic year, September 2014 - May 2015. While at the Wilson Center, Pakistan Scholars will be expected to carry out a full schedule of rigorous research and writing based on the topic outlined in the research proposal submitted at the time of application. They will also be expected to participate in workshops, seminars, and conferences organized by the Center's Asia Program, and in other ways to participate in the intellectual life of the Wilson Center and the larger community of South Asia observers in Washington.

Stipend

The stipend provided to Pakistan Scholars is $5,000 per month. In addition, the Wilson Center will also pay a portion of health insurance premiums for the scholar, and provide assistance for travel from Pakistan. The scholars will be provided with suitable work space, a Windows-based computer, and where feasible, a part-time research assistant.

Comment by Riaz Haq on May 28, 2018 at 6:10pm

#China’s #loans to #Pakistan should drive #economic development, boost its #manufacturing, #exports and #debt repayment ability. #CPEC - Global Times

https://www.thenews.com.pk/print/322593-china-s-loans-to-pakistan-t...


Pakistan expects to obtain $1 billion to $2 billion of fresh Chinese loans to help it avoid a balance-of-payments crisis, Reuters reported. Some observers hope China's economic assistance will help the country avoid having to go to the IMF for a bailout, but the key issue is the sustainability of China's financial help.

China will not be stingy in offering help to Pakistan to strengthen its infrastructure, but China's bank loan is a market-driven commercial decision in line with international practices. The main point is Pakistan's debt repayment ability. 

China-based financial organizations stick to a principle of not imposing additional political conditions when providing loans to other countries, distinguishing them from most Western financial institutions like the IMF. 

This might be one reason why Chinese loans are welcomed in Pakistan. China is likely to continue to finance new projects in the country but will also assess their debt repayment ability to avert the risk of bad debt. After all, Chinese loans to Pakistan are not a gift.

The multi-billion dollar China-Pakistan Economic Corridor (CPEC) has begun to bring tangible benefits to Pakistan's economy, which is likely to boost Pakistan's debt repayment ability. It's possible that we're entering a virtuous cycle in which Chinese loans promote the development of the CPEC, and this then improves Pakistan's debt repayment ability. However, the South Asian country may need to propel economic reforms to ensure the effectiveness of the loans and allow the local economy to benefit more from CPEC projects.

It is hoped that people will learn a lesson from the IMF's operations. In 2013, the IMF approved a loan plan for Pakistan to support its program to stabilize and rebuild the economy, but the multilateral lender failed to strictly monitor the use of the loans, and in the end they did little for Pakistan's economic development.

Now Pakistan's economy is on an upswing with the help of Chinese loans. Nadeem Javaid, who advises Prime Minister Nawaz Sharif's government and works closely on the CPEC program, was quoted by Reuters as saying last year that debt repayments and profit repatriation from CPEC projects will reach $1.5 billion to $1.9 billion in 2019, rising to $3 billion to $3.5 billion by the following year. 

China is likely to strengthen economic collaboration with Pakistan under the CPEC program, in a bid to ensure the effectiveness of the loans. The key to stronger cooperation between the two countries lies in how to improve Pakistan's economic innovation capability and allow the country to develop its own capacity for long-term economic sustainability. 

China's loans to Pakistan essentially aim to drive Pakistan's economic development, and thus the loans should be offered in a way that aligns with the local economy and helps restructure the South Asian economy and boost its manufacturing and exports.

Comment by Riaz Haq on June 1, 2018 at 5:23pm

The China–Pakistan Economic Corridor
by Aasim Sajjad Akhtar
(Jun 01, 2018)
Topics: Political Economy
Places: Asia , China , Pakistan

https://monthlyreview.org/2018/06/01/the-china-pakistan-economic-co...

U.S. imperialism has played an unambiguously destructive role in Pakistan for most of the country’s seventy-year history. Aside from decisively empowering the military establishment, its support of religious militancy in the 1980s precipitated a complete transformation of the body politic. The secular political traditions of other societies in the region were similarly undermined by the rise of millenarianism, with Afghanistan worst affected. Today Washington seeks to maintain its waning influence in the region through a zero-sum strategic game that has seen India, Pakistan, Iran, and Afghanistan pitted against one another, forcing their own people to bear the cost.

In this context, China’s claim to advance a development agenda that transcends the narrow geopolitical calculus that has long defined regional dynamics should be evaluated carefully. The biggest question mark in the OBOR strategy in South Asia remains Beijing’s frosty relations with New Delhi. Still, the volume of official trade between China and India totaled almost $71 billion in 2016—nearly six times that between China and Pakistan. Thus economic ties are expanding despite the Modi government’s nationalist posturing. In any case, China’s growing economic and political role in the region necessarily means that the era of Washington’s unrivalled hegemony, especially in its longtime frontline state of Pakistan, has ended.

Yet the discussion above confirms the danger that China’s emergent hegemony represents more of the same for Pakistan’s long-suffering people, especially those from historically underrepresented ethnic groups. There has also been little evidence so far that the ideal of building an “ecological civilization” that has gained credence in China in recent years is anything more than an afterthought when it comes to Chinese investments in Pakistan.12

Even if one takes the rather blunt metric of CPEC financing, the rhetoric is far removed from reality. Of the $28 billion injected into Pakistan’s economy by late 2016 through CPEC’s “early harvest” projects, $19 billion was in the form of commercial loans. In the not-too-distant future, this portends yearly debt repayments of more than $3.5 billion.13 It is not at all clear, then, that China offers a financial alternative to the International Monetary Fund/World Bank juggernaut that has already saddled Pakistan with a foreign debt burden approaching $80 billion.

Perhaps most importantly, China’s seemingly apolitical developmental intervention is consolidating the existing structure of power in Pakistan, and in particular the military establishment that Washington helped make into the country’s dominant force. Recent events suggest China is exerting some pressure on Pakistan’s GHQ to break with the religious militants long used as proxies against India and Afghanistan.14 This would make sense, given China’s commitment to expanding market exchange through its infrastructural and other investments, and the attendant fear that these investments may be threatened by militant movements in Pakistan.

Even if peace were achieved overnight, however, the Chinese vision of “development” would not represent a genuine and sustainable alternative to neoliberal development practices as they have been institutionalized around the world. China’s intervention in Pakistan thus cannot be considered the progressive “other” to the destructive militarism—both state and non-state—that U.S. imperialism and domestic elites have imposed on Southwest Asia for decades.

Comment by Riaz Haq on June 3, 2018 at 8:26pm

Former 'Economic Hitman' Reveals to Sputnik How CIA, NSA Conceal Activities

https://sputniknews.com/analysis/201711231059372967-economic-hitman...

Sputnik: Mr. Perkins, how did you know that your employer executed orders from the CIA and the
NSA? Was that a moment of truth?
John Perkins: I need to clarify – I never worked directly for intelligence agencies. As for the company I worked
for, I can say that we received orders from the World Bank or the US Agency for International Development
(USAID) or through the Treasury Department. We had an agreement on Saudi Arabia with the Treasury
Department.
So, my company received money from these institutions and, in my turn, I received a salary from the
company. We never had real contacts with the NSA and the CIA. All operations ran through some mediating
contracts, mediators and subcontractors, at least as far as I know.
My contacts with the NSA were rather mediated. The person who hired me at Chas T. Main was in the US
military reserve and, possibly, he had contacts with US intelligence. So, our contacts were not direct.
(Chas T. Main was an American consulting company headquartered in Boston. Perkins was a senior
economist and economic adviser there. His job was to arrange credits from the World Bank for developing
countries, making their governments dependent on American companies. In addition, loans were used
to pressure those governments toward American political and economic interests. Read more on the issue
in the rst
part of the interview with John Perkins.)
Sputnik: So, you didn’t meet CIA or NSA operatives as part of your work?
John Perkins: Maybe, I met some of them, but they didn’t identify themselves. It is normal for intelligence
agencies ocers.
They don’t have visiting cards and usually work under ocial
cover, including as diplomats,
trade representatives in embassies or employees in private companies. So, I never met a person who I knew
was a CIA or NSA agent, but I can suggest that there were some of them in my work.
Sputnik: What is the current role of intelligence agencies in the global economy?
John Perkins: The NSA, the CIA and other agencies often employ representatives of the economic world, just
like the NSA did to me. Why? This is the perfect cover. In other words, they employ business representatives
who secretly work for intelligence agencies.
I never got paid from the NSA or the CIA. I always got paid by my employer, Chas T. Main. In its turn, the
company received money from those agencies for certain infrastructure projects in undeveloped countries.
Thus, the government could always say it was not involved and was not aware of those activities while private
companies did the job.
Sputnik: Why did you quit?
John Perkins: In the rst
years, I thought that my job was a good business for all, including for developing
countries. We invested money there and those countries really developed, which was proved by statistic data.
But in course of time, I realized thatonly certain rich local families and American companies, including my
company, were getting benet
from those investments.
When a country, like Ecuador or Indonesia, received a loan there was a must that the money could be used
on infrastructure only with the participation of American companies, such as Halliburton and General Electric;
and local oligarchy was also involved.

Comment by Riaz Haq on June 3, 2018 at 8:27pm

Former 'Economic Hitman' Reveals to Sputnik How CIA, NSA Conceal Activities

https://sputniknews.com/analysis/201711231059372967-economic-hitman...

Sputnik: What happened after you quit?
John Perkins: My former employer did their best to convince me to stay. But I nally
resigned and started
writing a book about what I did. I talked to other people in this business, so-called "jackals." They were called
when we, "economic hit men," failed to convince the government of a country to cooperate. "Jackals" used
coups, mutinies or even assassinations to topple governments that refused to cooperate.
After I quit, I received threats, including against my family and my daughter. I also received a quite tempting
oer
from another consulting company, a rival of my former employer. They told me: "Accept our oer
and
don’t write the book." At the time, I felt some pressure and started writing other books. And many years later,
I wrote "The Confessions of an Economic Hit Man," my most famous book.
Sputnik: In the rst
part of our interview, you already said that you want to change the world. Please,
tell us what you are doing? What is the main goal of your organization Dream Change?
John Perkins: Dream Change is a non-commercial organization I co-founded. Our goal is to change the dream,
to change the paradigm of "predatory capitalism." Our goal is to change perception. We need to realize that
our reality is determined and formed by perception. … Everything exists because people perceive it in this
very particular way. When a lot of people have the same vision of one or another thing this begins
to inuence
the reality. My goal now is to change this vision.
We know that the world is in a deep crisis today. The world has been caught in the trap of the currently
economic and military systems that pose a threat to the whole planet. But the reason is that global
corporations that control the world ignore the negative consequences of their actions. I want to help change
this. 

Comment by Riaz Haq on June 6, 2018 at 9:49pm

BUSINESS DAY
Confessing to the Converted
By LANDON THOMAS JR.FEB. 19, 2006

https://www.nytimes.com/2006/02/19/business/yourmoney/confessing-to...

In an early scene that sets the tone for the book, he describes being seduced by a mysterious Catherine Zeta-Jones look-alike who called herself Claudine Martin and supposedly worked at Main. In an interview, he said she plied him with cocaine, red wine and ultimately herself. "We are a small exclusive club," she says in the book. "Your job is to encourage world leaders to become part of a vast network that promotes U.S. commercial interests. In the end, those leaders become ensnared in a web of debt that ensures their loyalty."

In the book, Mr. Perkins recounts the nine years in which he worked for Main in the 1970's. From Ecuador to Panama, Iran to Saudi Arabia, the mission was the same: working in league with government agencies, Mr. Perkins claimed that he inflated the economic growth forecasts of these countries and smoothed the way for the billions in loans that they took on. Ultimately, he said, the funds were recycled to the United States as these countries became clients of big American engineering, construction and manufacturing companies, including Bechtel, Halliburton, Boeing and others.

BUT in his telling, Mr. Perkins was constantly haunted by the feeling that he was in effect a hit man -- paid officially by his employer, Main Inc., but under the more oblique sway of the government and intelligence agencies. The son of a conservative New England family, he whips himself for having succumbed to pleasures of the flesh as well as the lure of money, influence and power.

In 1980, Mr. Perkins quit his job at Main. For much of the next two decades, he worked as a consultant, entrepreneur and specialist on the culture and practices of indigenous people of Latin America. After the terror attacks of Sept. 11, 2001, he said, he felt that it was time to tell his story. After being turned down by bigger publishers, Berrett-Koehler took a chance and published the book in 2004. A best seller in hardcover, despite few mainstream book reviews, the book has sold as many as 5,500 copies a week in paperback.

Mr. Perkins invests much of the story with earnest, pulpy touches. He writes of himself drinking beers and listening to Jimmy Buffett under magenta skies with beautiful women, meeting with disfigured dissidents in shantytowns outside of Tehran and absorbing the whispered warnings about the United States' imperial designs from Latin American leaders.

Michael M. Thomas, a former investment banker and novelist of Wall Street manners, says a book's success will often be determined more by its voice than its subject. And for now, Mr. Perkins's message of conspiracy carries the perfect pitch for many readers -- no matter how fantastic his conclusions may be.

"The odd side of our character is that we believe that dark powers are arranged against us -- call it the Da Vinci codes of finance," Mr. Thomas said. "But really, I never heard of anybody being assassinated for lack of taking a loan."

Indeed, for all the book's success, Mr. Perkins has faced numerous questions about the veracity of some of his dreamier contentions. Earlier this month, for example, the State Department released a brief report called "Confessions -- or Fantasies -- of an Economic Hit Man" that took issue with one of Mr. Perkins' primary assertions: that the National Security Agency, with a wink and a nod, was aware of and may even have approved Mr. Perkins's hiring at Main.

Comment by Riaz Haq on July 10, 2018 at 10:12pm

22 projects worth $28.6 billion under implementation: Dr Shamshad
It is up to the new government after the elections to decide and sign agreements for long-term loan programmes, says finance minister

https://profit.pakistantoday.com.pk/2018/07/10/22-projects-worth-28...

Minister for Planning Development and Reform Dr Shamshad Akhtar, while briefing media after the 55th progress review meeting on CPEC projects held here on Tuesday, said apart from the investment on energy and infrastructure projects $8.2 billion is also being invested in railways under which the mega project of ML-1 would be completed. The work on this important project will soon be started, she added.

According to her, numbers of projects initially approved to be completed under the CPEC were still undergoing design and feasibility studies. The major development was being witnessed at Gwadar where huge investment was being made on infrastructure development.

In reply to a query, she said fast-track work on industrial zones was much needed. Previously the industrial zones failed to give the desired results for several reasons, however, a better strategy was being followed through by the Board of Investments (BoI) to ensure the success of such zones in future.

Shamshad Akhtar said that some delay has occurred in the construction of Special Economic Zones (SEZs) in the country due to lack of experience in this sector. She said that China has experience in this sector and the world largest exporter would cooperate and help Pakistan in establishing SEZs. She added that work is underway on nine industrial zones.

In reply to a query regarding International Monetary Fund (IMF), the minister said that caretaker government would not take long-term decisions. It would follow all bilateral commitments made by the previous government with China, she said. She added that it is up to the new government after the election to make decisions and sign agreements for long-term programmes.

She said that there are some concessional loans, soft loans and grants as well as Pakistan’s own expenditures for CPEC projects. “It would not be appropriate for me to say something more about it,” she said.

She said on the request of Pakistan, China has assured to soon start work on new Gwadar International Airport as well as East Bay Expressway.

She further highlighted that Pakistan and China bilateral relations are time-tested, as we have a long history of cordial, friendly and strategic cooperation in all areas and domains. Friendship with China is the cornerstone of Pakistan’s foreign policy and strategic cooperative partnership is moving from strength to strength, she underscored.

Dr Shamshad reassured China of full cooperation and support in promoting unparalleled partnership under the CPEC and Belt and Road Initiative (BRI) framework.

She emphasized to further expedite work on projects at Gwadar and SEZs that are not only of vital importance in the portfolio of CPEC but for the local population as well. She was of the view that one of the main gains from CPEC is the trade and industry development and cooperation to ensure sustainable economic growth and shape new industry clusters as well as takes fruits of CPEC to lesser developed regions of Pakistan.

She pointed out that both countries need to aggressively pursue the mega initiative to shape a new international logistics network in the region and promote regional economic integration through international economic, trade and technological cooperation and people exchanges. She further said that the two countries will make full use of existing bilateral cooperation mechanisms to form synergy, give each other support and learn from each other to complement and fully display each other’s strengths.

Federal Minister Dr Shamshad further underlined to continue in this pursuit so that we can bring transformational changes in our approach towards ease of doing business which will be key to attracting foreign direct investment (FDI).

Comment by Riaz Haq on July 24, 2018 at 9:30am

"According to data released by GOP, 42% of foreign debt of PAK is from multilateral financial institutions, 18% is from Paris Club. Chinese preferential loan only account for 10% of whole foreign debt.Who is real initiator for Debt crisis? What’s the conspiracy behind the article?"

https://twitter.com/CathayPak/status/1021459197727313920
Chinese Emb Pakistan added


This was a response to a Wall Street Journal story claiming " China’s Global Building Spree Runs Into Trouble in Pakistan"


https://www.wsj.com/articles/chinas-global-building-spree-runs-into...

"Three years into China’s program here, Pakistan is heading for a debt crisis, caused in part by a surge in Chinese loans and imports for projects like the Orange Line, which Pakistani officials say will require public subsidies to operate."

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