Imtiaz Gul
In your live phone calls over TV on May 11, you minced no words when talking about the West’s policy in favour of India and its implications.
Your assessment ( the western media and countries …..want to see a powerful India to tackle the growing (military and economic) threat of China” ) is unambiguous and candid.
Your conclusion (I must sayit is a futile effort on the part of New Delhi. India will end up suffering (more) in the process) also sounds realistic.
These thoughts on India and China came across as a recognition of the geo-politics currently playing out in the region, particularly since US President Joe Biden’s near open declaration of contest with an “assertive China” in his April 24 speech.
People also remember your interviews in which you categorically stated that “Pakistan’s economic future is tied to China.”
This stance on China in the evolving geo-political environment is likely to bring unusual pressures on, and challenges for Pakistan because of its closeness to China under the Belt and Road Initiative. Pressure essentially means the US-led West’s aversion to China and expectation from Pakistan to lessen reliance on China as much as possible.
Plenty of pro-West vested interest within governance structures serves as the facilitator for this anti-China western view. And this creates the biggest roadblock to our historically tested ties with Beijing.
While many aides around you – as well as the energetic Chinese ambassador to Pakistan – continue peddling the “feel-good” narrative on Sino-Pakistan relations, the reality on ground points to some disturbing realities. Three serious issues are at stake.
Firstly, as many as seven big projects of CPEC Program (ML-1, 1124 MW Kohala, 1320 MW Thar, 330 MW Thar Energy, 300 MW Gwadar, 700 MW Azad Patan, 330 MW Thal Nova) are currently facing financial constraints because the Chinese insurance company Sinosure – China’s only national policy-oriented export credit insurance agency – refuses to underwrite new financial commitments. Despite multiple assurances from the Government of Pakistan to Chinese Government in the last two years, Sinosure is holding back because of little action on ground. This implies delay in launch and execution of projects.
Secondly, all three Chinese power projects have been 100% operational for over two years and their outstanding dues are about to hit $ 1 billion. Nothing has yet been paid. Nor is there any solution in sight because your aides want them to reduce an already agreed tariff to unparalleled levels, much lower than what over 15 year old power plants have been charging Pakistan.
Dear Prime Minister,
These power projects were financed by Chinese banks and underwritten by the credit assurance agency. This means purely commercial deals and not charity.
And, most importantly, this is an issue that is not lost on the top Chinese leadership either. By implication, the release of funding for the much-touted ML-1 rail track project and the urgently needed Gwadar power plant is practically on hold. The Gwadar project cant go into big start without official financial closing. And this will impact the completion of the new Gwadar Airport as well.
Thirdly, the issue of Pakistan’s commitment to repayment of loans and outstanding dues; although these investments and the G2G loan ( project loans plus balance of payment support = $ 11.5 billion) carry an up to 25 years of grace period, Chinese officials are legitimately alarmed over the indifference and non-seriousness that Pakistani bureaucrats are demonstrating over the debt issue.
This is something that has gone into official documents for the first time since the launch of CPEC in 2015.
“The Chinese side expressed concerns about Pakistan’s debts, including IMF’s requirements for the Pakistani government to avail loans and about the impact of restrictions under the G-20 Debt Servicing Suspension Initiative (DSSI) on the financing of the ML-I project,” according to the minutes of a recent official meeting.
How we can expect the Chinese companies and banks to continue funding projects and release fresh funding when they are not getting any returns even on older investments? The absence of commitment as well as apparent insincerity to the timely repayment of loans and interests can work as a demotivating factor and thus impact the pace of CPEC projects.
My request to you Mr.PM !
Please don’t allow bureaucracy to spoil relations with China theough procedural rigmarole. China is our mechanism to self respect and sovereignty. Must ensure to stop double games by them in the name of technicalities. We must maintain and preserve the Sino-Pakistan bond with dignity, and honour our commitments. Stretching this bond to the limits through unreasonable and “un-economical” jugglery of statistics is likely to leave Pakistan neither there nor here. Pakistan needs to put solid repayment plans with well-defined timelines if it wants to turn the CPEC into real opportunity.
