The Unbearable Lightness of CPEC

Now that the Imran Khan-led PTI has been shown the door, policy pundits are busy assessing the regime on different parameters. Overall, there has been a consensus that the PTI performed poorly as there was a huge gap between aspirations and actual policy implementation.

However, here, I will specifically examine progress and evolution of CPEC during the PTI regime.

There is a dominant perception that unlike its predecessor – the PML (N), the party that had started the China-financed initiative, the IK-led political set up was not very enthusiastic about the development of CPEC projects. For instance, last year at the inaugural ceremony of the newly 886 km-long 600 KV transmission line from Matiari to Lahore constructed under the CPEC framework, former PM Imran Khan was reported to have admitted that the breakout of the coronavirus pandemic hampered progress on CPEC projects. Hardly a month before the said event, former Minister for Planning, Development & Special Initiatives, Asad Umar, brushed aside observations of the Chairman Senate Standing Committee on Planning that CPEC had been slowed down during the past three years of the government.

To come up with a fair assessment, let’s examine the evolution of CPEC, particularly considering key decisions made during the Joint Cooperation Committee (JCC) meetings on CPEC held thus far. The 10th JCC meeting in September last year, organized through videoconference, was held after nearly two years which was co-chaired by Asad Umar from the Pakistani side and Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC) of the People’s Republic of China.

Flowery rhetoric and official statements including “broadening the scope of cooperation” aside, there had not been any significant breakthrough regarding the inclusion of new projects or some positive developments concerning ongoing SEZs or the much-awaited Main Line-1 (ML-1). Some of the outcomes included establishing an Investor Facilitation Centre specifically for assisting Chinese investors and ensuring enhanced security arrangements for CPEC-related ventures. In addition, an MoU was signed by both sides to establish a Joint Working Group (JWG) on Information Technology Industry. The JCC also announced the signing of an MoU related to Karachi Coastal Comprehensive Development Zone (KCCDZ) and Agreement of Cooperation Framework between Ningbo Port and Gwadar Port.

In addition, ventures that came under discussion during the 10th JCC comprised of 700 MW Azad Pattan Hydropower Project, South-North Gas Pipeline, Policy Framework for Thar Coal Gasification, Strategic Underground Gas Storages, National Seismic Study of Sedimentary Area; Joint Prospecting, Exploration, Development, and Marketing of Metalic Minerals, Dir Motorway Project; Peshawar – D. I. Khan Motorway; Clean and Green Gwadar Movement Project, Potential Cooperation in the Copper-Gold mine exploration, Stone processing and other areas of mutual interest. Although several projects were discussed but there was no green signal from Beijing whether it was willing or not to include these in the CPEC portfolio. To be fair, in all the three JCC meetings held during the PTI tenure, CPEC somehow did not pick up the expected tempo, particularly the pace of industrialization under the envisaged SEZs.

The first-ever meeting of JCC was held on August 28, 2013, in Islamabad whereas the second one was convened in February 2014 where feasibility studies on 16 energy projects were approved by both sides. During the third JCC meeting held on August 27, 2014, several prioritised or early harvest projects were given a nod. The fourth JCC summit was organized in Beijing on March 25, 2015, where again multiple energy projects comprising coal-based power plants, hydel, solar, and wind energy projects were discussed, reviewed and approved for funding. The fifth meeting took place in Pakistan on November 10-12, 2015. In this three-day long huddle, besides other developments, approval was accorded to enhance the capacity of coal-based power plants from 660 to 2600 MW to be built at the Thar Desert in Sindh province. In addition, it was agreed to include the construction of the Diamer-Bhasha Dam in the CPEC framework.

It was, however, later withdrawn due to some disagreements between the two parties. For instance, Siegfried O. Wolf has discussed in his book titled ‘The China-Pakistan Economic Corridor of the Belt and Road Initiative: Concept, Context and Assessment’ why Pakistan later withdrew the inclusion of the Diamer-Bhasha Dam from the CPEC portfolio.  According to the author, “Islamabad withdrew its request to include the ($14 billion worth) —Bhasha Dam in the CPEC scheme, citing the strict monetary conditions imposed by Beijing. It was made clear that not only were the financial conditions set by China not feasible but also that Beijing’s demand to take ownership of the Diamer-Bhasha Dam project was not in line with Pakistan’s national interests” (p.175).

During the 6th JCC meeting held in Beijing on December 29, 2016, various new projects were signed, and it was also agreed that each province would get an industrial zone so that the dividends of CPEC are fairly distributed among the federating units of the country. The 7th JCC summit on CPEC was organized on November 20, 2017 in Islamabad. One of the major outcomes of this summit was the signing of a much-debated and long-awaited ‘Long Term Plan for China–Pakistan Economic Corridor (2017–2030)’. The document listed seven major areas comprising connectivity, energy, trade and industrial parks, agricultural development and poverty alleviation, tourism, cooperation in areas concerning people’s livelihood and non-governmental exchanges and financial cooperation. It must be clarified that the LTP did not provide any additional information that was not already known about CPEC. However, it helped in clarifying some of the apprehensions regarding the long-term vision and goals of the initiative and actual fields of cooperation between the two countries.

The 8th JCC meeting and the first one during the PTI regime was held in Beijing on December 20, 2018. Reiterating Pakistan’s firm commitment to CPEC, then Federal Minister for Planning Makhdum Khusro Bakhtyar had termed the initiative as “the heart and soul of Pakistan-China economic cooperation”.

Key outcomes of the JCC included the signing of an MoU on Industrial Cooperation and establishing a cooperation framework on socio-economic development. The MoU of industrial cooperation was stated to include cooperation in diverse industries such as textiles, petrochemicals, iron and steel, and mines and minerals. Minister for Planning said that cooperation in the industrial sector would help attract investment in special economic zones and encourage relocation of Chinese industry. Both sides agreed to cooperate to develop Special Economic Zones in a speedy manner.

The 9th JCC meeting was held on November 5, 2019, in Islamabad. On this occasion, a ceremony was held wherein the Multan-Sukkur Motorway of the eastern corridor was inaugurated. In addition, Gwadar Master Plan was approved and signed. The ceremony also witnessed the signing of two MoUs; one between All China Federation of Trade Unions (ACFTU) and the Ministry of Planning for further strengthening the worker exchanges and another on Healthcare between the Ministry of Health and Research Development International (RDI). Then Federal Minister for Planning had highlighted that “ML-1 was also a top priority project for Pakistan and the stage was set to take the discussion to next level and formulate a Joint project financing group to discuss the modalities”. However, there were no words about ML-1 during the 10th JCC meeting held last year.

In sum, a chronological order of all the 10 JCC meetings shows that some of the projects which Pakistan has been pursuing such as the Diamer-Bhasha dam (outside CPEC framework) or ML-1 (considered the logistic backbone of this corridor), and some road projects (including KKH remaining portion) seemed to be no longer the priority of either of the two sides.