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. 


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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Riaz Haq said…
Economic Survey of Pakistan 2016-17

Per Capita Income in dollar terms has witnessed
a growth of 6.4 percent in FY 2017 as
compared to 1.1 percent last year. The per
capita income in dollar terms has increased
from $ 1,531 in FY 2016 to $ 1,629 in FY
2017. Main contributing factors for the rise in
per capita income are higher real GDP, growth,
low population growth and stability of Pak


Real GDP growth was above
four percent in 2013-14 and has smoothly
increased during the last four years to reach
5.28 percent in 2016-17, which is the highest in
10 years.


The agriculture sector met
its growth target of 3.5 percent, helped by
government supportive policies and by
increased agriculture credit disbursements.
During 2015-16, the agriculture credit
disbursement was close to Rs 600 billion while
during 2016-17, the target was raised to Rs 700
billion. During July-March 2016-17, the
disbursement was observed to be 23 percent
higher as compared to the previous year. These
developments, along with the Prime Minister’s
Agriculture Kissan Package together with other
relief measures have started yielding positive
The large-scale manufacturing output is
primarily based on Quantum Index
Manufacturing (QIM) data, which show an
increase by 5.06 percent from July 2016 to
March 2017. Major contributors to this growth
are sugar (29.33 percent), cement (7.19
percent), tractors (72.9 percent), trucks (39.31
percent) and buses (19.71 percent). High
growth of sugar is based on production of 73.9Million Tons of Sugarcane as compared to 65.5
million tons last year, which represents an
increase by 12.4 percent.
Large Scale Manufacturing growth has picked
up momentum and posted a strong 10.5 percent
growth in the month of March 2017 compared
to 7.6 percent in March 2016. The YoY growth
augurs well for further improvement in growth
during the period under review.
On average, the LSM growth stood at 5.06
percent during July-March FY 2017 compared
to 4.6 percent in the same period last year. The
sectors recording positive growth during JulMar
FY 2017 are textile 0.78 percent, food and
beverages 9.65 percent, pharmaceuticals 8.74
percent, non-metallic minerals 7.11 percent,
cement 7.19 percent, automobiles 11.31
percent, iron & steel 16.58 percent, fertilizer
1.32 percent, electronics 15.24 percent, paper &
board 5.08 percent, engineering products 2.37
percent, and rubber products 0.04 percent.
Pakistan is bestowed with all kinds of resources
which also include minerals. Pakistan possesses
many industrial rocks, metallic and nonmetallic,
which have not yet been evaluated. In
the wake of the 18th Amendment, provinces
enjoy great freedom to explore and exploit the
natural resources located in their authority, with
the result that they are currently undertaking a
number of projects using their own resources,
or in collaboration with the federal government
or with donors to tap and develop these
The services sector recorded a growth of 5.98
percent and surpassed its target which was set
at 5.70 percent. Wholesale and retail trade
sector grew at a rate of 6.82 percent. The
growth in this sector is bolstered by the output
in the agriculture and manufacturing sectors.
The share of Agriculture, Manufacturing and
Imports in Wholesale and Retail Trade growth
is 18 percent, 54 percent and 15 percent
respectively. The Transport, Storage and
Communication sector grew at a rate of 3.94
percent. Finance and insurance activities show
an overall increase of 10.77 percent, mainly
because of rapid expansion of deposit formation
(15 percent) and demand for loans (11 percent).
Riaz Haq said…
#Pakistan presents new $50 billion #development-heavy #budget for FY 2017-18 - ABC News - via @ABC

Pakistan's Finance Minister Ishaq Dar Friday presented a $50 billion development heavy budget that also promised a seven percent increase in military spending, a growth rate of near 6 per cent and an appeasement for farmers who protested ahead of the budget announcement, clashing with police who used tear gas to disperse them.

The budget offered Pakistan's farmers $6.8 billion in loans, as well as fuel and electricity subsidies.

In poor Pakistan the budget promised $1.15 billion in subsidies, mostly to reduce electricity and fuel costs. In his speech to Parliament Dar said the annual per capita income in Pakistan had increased from $1,334 to $1,629 over the last four years of Prime Minister Nawaz Sharif's government. Tax collection which is notoriously low in Pakistan also increased nearly 80 percent in the same period, he said.

In addition to a seven percent increase in military spending, Pakistan's budget also gave every soldier a 10 percent salary hike for fighting terror. The defense budget was set at $9 billion compared to $8.4 billion last year.

Pakistan's defense budget is not open for debate by Parliament nor does it generally include pensions paid to military personnel. The cost of their pensions comes out of the current budget.

Pakistan has been in a protracted war against terrorists with most battles waged in the tribal regions that border Afghanistan.

Friday's budget was seen as business friendly, offering a 30 percent tax cut to the corporate sector. It also exempts industries from the country-wide rolling power cuts that afflict Pakistanis on a daily basis.

Of the $20 billion plus development budget, Dar said $1.8 billion will go toward financing projects linked to its multi-billion dollar China-Pakistan Economic Corridor scheme that includes a vast array of joint ventures including roads and power plants.

Opposition politicians slammed the budget, with Asad Umar of the Tehreek-e-Insaf (Movement for Justice) party saying it takes from the poor to give to the rich.

"Money is being snatched from the pockets of the poor and middle classes to enhance the wealth of the unproductive elite," Umar said in a statement.

In a country with a literacy rate of 69.5 per cent among men and 45.8 among women, according to the latest CIA country report, the education budget was set at $887 million, considerably less than the sums allocated for defense and development.

The health sector in Pakistan, often bemoaned by many Pakistanis as inadequate, was allocated $126 million according to the figures released by the government.

Pakistan's protesting famers timed their protest hours before Dar presented the budget for the next fiscal year before lawmakers on Friday.

Pakistani TV channels broadcast footage showing riot police dragging farmers away from the scene, as well as protesters throwing stones at the police.
Riaz Haq said…
Cambodia, Sri Lanka and the China debt trap

Sri Lanka’s growing economic engagement with China has also generated concern among scholars and policymakers. One side of the argument posits that China has made a positive contribution to the economic growth of Sri Lanka. China has provided Sri Lanka with over US$5 billion between 1971 and 2012. Most of this has gone into infrastructure development, with China investing US$1 billion into a deep-water port at Hambantota and billions into the Mattala Airport, a new railway and the Colombo Port City Project.

As a small country emerging from civil war, infrastructure is crucial in facilitating Sri Lanka’s trade and foreign investment sectors. The World Bank forecasts that Sri Lanka’s GDP growth is likely to grow from 3.9 per cent in 2016 to around 5 per cent in 2017.

Yet opponents see flaws in the China–Sri Lanka bilateral relationship. First, Sri Lanka has borrowed billions of dollars from China in order to build domestic infrastructure. Sri Lanka’s estimated national debt is US$64.9 billion, of which US$8 billion is owed to China. This can be attributed to the high interest rate on Chinese loans. For the Hambantota Port project, Sri Lanka borrowed US$301 million from China with an interest rate of 6.3 per cent, while the interest rates on soft loans from the World Bank and the Asian Development Bank (ADB) are only 0.25–3 per cent. Sri Lanka is very deep in a debt crisis or ‘debt trap’ as some scholars describe it.

Second, Sri Lanka is currently unable to pay off its debt to China because of its slow economic growth. To resolve its debt crisis, the Sri Lankan government has agreed to convert its debt into equity. But the recent Sri Lankan decision allowing Chinese firms 80 per cent of the total share and a 99 year lease of Hambantota port caused public outrage and violent protests in Sri Lanka. In addition, Chinese firms have been given operating and managing control of Mattala Airport, built by Chinese loans of US$300–400 million, because the Sri Lankan government is unable to bear the annual expenses of US$100–200 million.

According to Brookings Institute visiting fellow Kadira Pethiyagoda, having access to the Hambantota port and Mattala airport provides Beijing with a strategic military position in the event of an Indian Ocean conflict and is also key for its ‘Belt and Road’ initiative. The growing Chinese influence may also compel Sri Lanka to support China’s position on the South China Sea dispute and ‘One China’ policy.
Riaz Haq said…
OBOR will spur growth in Asia, says UN official

A statement by the (Indian) Ministry of External Affairs (MEA) last week had said the OBOR would create “unsustainable debt burden for communities”. However, Sebastian Vergara, Economic Affairs Officer at the United Nations’ Department of Social and Economic Affairs (DESA), says the project would benefit Asia, in an interview with National Herald.

However, achieving productivity growth must be a government policy priority if India wants to continue to grow above 7%. India must encourage public private partnership (PPP) projects in key sectors, especially infrastructure. Business structural reforms should be vigorously pursued. The health of the public banking sector is a big worry for India, and the government needs to tackle the level of debt with sound policies.
Riaz Haq said…
Moody's: Pakistan shows strong growth and reduction in fiscal deficits

New York, May 07, 2017 -- Strong growth performance, fiscal deficit reduction and improved inflation dynamics underpin the Government of Pakistan's B3 rating with a stable outlook, says Moody's Investors Service.

At the same time, credit challenges include a relatively high general government debt burden, weak physical and social infrastructure, a fragile external payments position, and high political risk. In particular, the government's very narrow revenue base weighs on debt affordability. Meanwhile, exports and remittance inflows have slowed and capital goods imports have risen, resulting in renewed pressure on the external account.

Moody's conclusions are contained in its annual credit analysis of Pakistan, "Government of Pakistan -- B3 Stable". The analytical factors that are used in its Sovereign Bond Rating Methodology are: economic strength, which is assessed as "moderate"; institutional strength "very low (+)"; fiscal strength "very low (-)"; and susceptibility to event risk "high".

Moody's notes that prospects for growth have improved following Pakistan's successful completion of its three-year Extended Fund Facility (EFF) program with the International Monetary Fund (IMF) in September 2016 and the launch of the China-Pakistan Economic Corridor (CPEC) project in 2015.

Moody's notes that the implementation of the CPEC project has the potential to transform the Pakistani economy by relieving infrastructure bottlenecks, and stimulating both foreign and domestic investment. However, headwinds to further fiscal consolidation and renewed pressure on the external account present downside risks to the rating.

"Since 2013, implementation of economic reforms and increased foreign investment flows have contributed to macroeconomic stability and higher GDP growth. However, government debt remains elevated and pressure on the external account continues. " said William Foster, a Vice President and Senior Credit Officer at Moody's.

The stable outlook represents balanced upside and downside risks to the sovereign credit profile. Support from multilateral and bilateral lenders has bolstered Pakistan's foreign currency reserves and fostered progress on economic reforms. Meanwhile, implementation of the CPEC project has the potential to transform the Pakistani economy by relieving infrastructure bottlenecks, and stimulating both foreign and domestic investment. However, headwinds to further fiscal consolidation and renewed pressure on the external account present downside risks to the rating.

Upward triggers to the rating would stem from sustained progress in structural reforms that would significantly reduce infrastructure impediments and supply-side bottlenecks. This would improve Pakistan's investment environment and eventually aid a shift to a sustained higher growth trajectory. A fundamental strengthening in the external liquidity position and meaningful reduction in the government deficit and debt burden would also be credit positive.

Conversely, Moody's would view a stalling of the government's post-IMF program economic reform agenda, material widening of the fiscal deficit, a deterioration in the external payments position, withdrawal of multilateral and bilateral support, or a more unstable political environment as credit negative.
Riaz Haq said…
CPEC: calling the shots

By Yasir MasoodPublished: June 2, 2017

To counter the nefarious narratives of the critics against CPEC, let’s first understand that the inflow of the funds from China, now estimated to be $62 billion: (a) $36 billion as Chinese investment in power projects which will add up 7,000-11,000 MW to the national grid by 2018. This sum will have no direct financial implications on Pakistan’s external payment obligations and; (b) $26 billion in a Chinese government loan, dedicated to building infrastructure. Since the inflow of funds as loans and FDI has dissimilar financial implications; therefore, a separate evaluation is direly needed to compute some of the major benefits as under.

Pakistan’s economy has severely suffered because of the energy crisis over the last decade or so. A much-needed uptick in power generation under CPEC will help revitalise the worst-affected industrial sectors. And particularly the cotton textile production and apparel manufacturing, which are the country’s largest industries, accounting for about 66 per cent of the merchandise exports and almost 40 per cent of the employed labour force. It will also help rejuvenate the remotely located cottage industry, small size manufacturing, agriculture and mining industry businesses to become commercially viable and contribute its due share of the GDP, on the one hand, and create more job opportunities in the far-flung areas on the other.

It is a misgiving that the Chinese power companies would be availing higher tariff rates. The National Electric Power Regulatory Authority (Nepra) has not mentioned any such concessions or exemptions and has to act according to its jurisdiction to maintain uniformity. Similarly, other regulatory bodies will also look after the environmental hazards, avert abuse of dominant positions, ensure recovery of other levies, implementation of labour laws, and above all, the vibrant and robust courts can swiftly act to protect the constitutional rights of the general public as per laws of the land.

The second part, which will be an interest-bearing loan, that constitutes about 40 per cent of the total $62 billion chunk under the CPEC framework will not overburden Pakistan’s ballooning current and future foreign payment liabilities, as dreaded by some critics unfamiliar with repayment dynamics. Pakistan has been borrowing from the IMF at an interest rate ranging from 5 to 10 per cent just to avert the default on external payments in time. Whereas CPEC loan will be carrying an aggregate interest rate of not more than 1.9 per cent per annum and even below, repayable in a period stretched over 25-30 years and even more.

Reimbursement of the loan with markup, which is estimated to be around $1.5 billion per annum, will start in 2019 and after gradual increase would remain within the range of $4.5 to $5 billion even in the peak years. This additional burden on account of CPEC’s loan would be quite nominal when compared with its eventual upshots — briefly calculated below.

Pakistan’s existing transportation network is quite dilapidated and causing a huge loss of around 3.5 per cent of the country’s annual GDP as estimated by the government. According to the IMF, Pakistan’s total GDP in 2016 was around $285.153 billion of which 3.5 per cent amounts to $9.98 billion. Improvement in the transportation network under CPEC will considerably cut down such losses, thereby reducing Pakistan’s oil import bill and related transport equipment. Similarly, Pakistan’s national exchequer will be earning around $6 to $8 billion a year under toll tax revenue, etc.

Put together, the above two explained sources of income and savings alone will be substantially higher, when matched with the disbursement of loan and debt service liability to China and that too insignificantly spread over a period of 25-30 years and even more.
Riaz Haq said…
Keeping the lights on in Pakistan will drive growth, save lives by Afshin Molavi

Last week, Pakistan achieved a quiet milestone, returning to the prestigious MSCI Emerging Markets Index after losing its status in 2008. Joining 23 other countries on the index, from high-growth Asian economies to large Latin American and rising Eastern European ones, Pakistan has now returned to the “premier league” of emerging markets.

Long-term, this will mean a steady flow of global capital entering Pakistan’s equities markets. It will also offer a confidence boost for foreign investors. But Pakistanis can be forgiven if they are hardly in a mood to celebrate, as widespread electricity shortages wrack the country once again.

Peshawar residents face cuts of six to eight hours per day, and violent protests broke out in the northwest province of Khyber Pakhtunkhwa over the cuts, leaving at least two dead. Even the commercial metropolis of Karachi has not been spared, losing electricity in several parts of the city last week, prompting protests.

Electricity shortages are bad enough under normal circumstances, but during the holy month of Ramadan — when stomachs are growling, and the need for electricity to cook food ahead of the breaking of the fast becomes even more urgent — it becomes a combustible mix.

For Prime Minister Nawaz Sharif, the electricity shortages present a serious embarrassment for a leader who placed the issue at the center of his election campaign in 2013. Whether or not Pakistan can keep the lights on could determine his future as prime minister.

Enter China. One of the most impactful elements of the much-vaunted, multibillion-dollar China-Pakistan Economic Corridor (CPEC) will be Beijing’s investments in Pakistan energy projects. Last month, Pakistan inaugurated a Chinese-financed, coal-fired power plant in Punjab, completed after 22 months of work, while announcing the launch of a plant in electricity-starved Baluchistan province.

From wind and solar to coal and hydro, China’s energy projects across Pakistan are dizzying in scope and potentially transformative to the future of the South Asian country of some 200 million people. According to the CPEC website, there are at least 18 active projects in various stages of development.

As with all projects, some will materialize and be delivered on time, others will be delayed or fall off the map, but even if China delivers on half of the proposed projects, Pakistan’s future will be, well, brighter.

Numerous studies have demonstrated the direct causal link between access to energy and economic growth. Economists need not have spent so much time constructing graphs and testing the thesis. It is common sense. Imagine an industrial revolution without regular access to energy?

Pakistan has become something of a darling in the emerging-markets investment community of late. Pakistan’s Global X MSCI exchange traded index was up 18 percent over the past 12 months, though it took a sharp dive after officially entering the MSCI Index last week. It seems traders had been buying the rumor, so to speak, and sold the fact.

Over the past three years, Pakistan has issued a successful Eurobond as well as sukuk bonds, heavily oversubscribed by yield-hungry international investors betting on the Pakistan growth story. The World Bank projects a healthy 5.2 percent growth rate for 2017.

Moreover, consumer companies are harvesting growth by targeting the country’s rising middle class. Former governor of the State Bank of Pakistan, Ishrat Husain, told me that companies such as Nestle and Proctor & Gamble are seeing impressive 25-percent rates of return. Some investment strategists are even touting a new post-BRICs (Brazil, Russia, India and China) acronym: VARP (Vietnam, Argentina, Romania and Pakistan).
Riaz Haq said…
Financing burden of CPEC
Ishrat Husain

The total committed amount under CPEC of $50 billion is divided into two broad categories: $35bn is allocated for energy projects while $15bn is for infrastructure, Gwadar development, industrial zones and mass transit schemes. The entire portfolio is to be completed by 2030.


The entire energy portfolio will be executed in the IPP mode —as applied to all private power producers in the country. Foreign investors’ financing comes under foreign direct investment; they are guaranteed a 17pc rate of return in dollar terms on their equity (only the equity portion, and not the entire project cost). The loans would be taken by Chinese companies, mainly from the China Development Bank and China Exim Bank, against their own balance sheets. They would service the debt from their own earnings without any obligation on the part of the Pakistani government.

Import of equipment and services from China for the projects would be shown under the current account, while the corresponding financing item would be FDI brought in by the Chinese under the capital and finance account. Therefore, where the balance of payments is concerned, there will not be any future liabilities for Pakistan.

To the extent that local material and services are used, a portion of free foreign exchange from the FDI inflows would become available. (Project sponsors would get the equivalent in rupees). For example, a highly conservative estimate is that only one-fourth of the total project cost would be spent locally and the country would benefit from an inflow of $9bn over an eight-year period, augmenting the aggregate FDI by more than $1bn annually. This amount can be used to either finance the current account deficit or reduce external borrowing requirements. Inflows for infrastructure projects for local spending would be another $4bn over 15 years.

Taking a highly generous capital structure of 60:40 debt-to-equity ratio for energy projects, the total equity investment would be $14bn. Further, assuming the extreme case that the entire equity would be financed by Chinese companies (although this is not true in the case of Hubco and Engro projects, where equity and loans are being shared by both Pakistani and Chinese partner companies) the 17pc guaranteed return on these projects would entail annual payments of $2.4bn from the current account.

CPEC’s second component, ie infrastructure, is to be financed through government-to-government loans amounting to $15bn. As announced, these loans would be concessional with 2pc interest to be repaid over a 20- to 25-year period. This amount’s debt servicing would be the Pakistan government’s obligation. Debt-servicing payments would rise by $910 million annually on account of CPEC loans (assuming a 20-year tenor). Going by these calculations, we can surmise that the additional burden on the external account should not exceed $3.5bn annually on a staggered basis depending on the project completion schedule.

As a proportion of our total foreign exchange earnings of 2016, this amounts to 7pc. These calculations do not take into account the incremental gains from GDP growth that will rise because of investment in energy and infrastructure. As the loan amounts would be disbursed in the next 15 years and repayments would be staggered, the adding of the entire $15bn to the existing stock of external debt and liabilities is not an accurate representation. The more realistic approach would be a tapered schedule, with $2bn to $3bn getting disbursed in the earlier years and slowing down in the second half.
Riaz Haq said…
In Pakistan, China presses built-in advantage for 'Silk Road' contracts

By Drazen Jorgic | ISLAMABAD
Last year, Pakistan held informal talks with General Electric, Siemens and Switzerland's ABB to build the country's first high-voltage transmission line. Chinese power giant State Grid committed to building the $1.7 billion project in half the time of its European counterparts – and clinched the deal.

This is a familiar tale in Pakistan and many other countries.


As China makes its "Belt and Road" initiative – a massive project to connect Asia with Africa and Europe through land and maritime routes – a policy priority for the next decade, Chinese companies are taking the lion's share of infrastructure projects across the region.

Just last year, Chinese firms won project contracts in Belt and Road countries worth $126 billion, state media reported.

In Pakistan, whose geographical position makes it central to Beijing's "Silk Road" plans, contracts have been awarded for projects worth more than $28 billion – all by Chinese companies working together with local firms. More than $20 billion in new investment is likely in the next few years, Pakistan's Planning Minister Ahsan Iqbal told Reuters this week.

Last month, Pakistan's government took out full-page newspaper advertisements on the first China-Pakistan project completed under the plan, a 1,300 mw coal plant that it said was constructed in 22 months, a record time for such a facility. The plant is owned by China's state-owned Huaneng Shandong and the Shandong Ruyi Science & Technology Group.

But two officials at two Chinese state-owned banks that direct government funding, China Development Bank (CDB) and Export-Import Bank of China (EXIM), told Reuters that they have been instructed by the government to favor lending to Chinese firms for Silk Road projects.

The officials also said that the two banks prefer that companies working on infrastructure projects across the region import raw materials or purchase equipment from China.

There is some criticism in Pakistan that the awarding of the contracts to Chinese companies – while speeding up projects – is also costing the country more money.

In the transmission line project deal, for example, General Electric estimated it could make one key part of the line – the converter stations – for about 25 percent less than what State Grid was charging, according to a Pakistani government official and two power sources familiar with GE's projections. By awarding the contract to State Grid, Islamabad paid a higher price, they said.

An official at Nepra, Pakistan's independent energy regulator, said State Grid was also given a tax break not on offer to other investors.

Pakistani government officials declined to comment on tax issues regarding the deal.

China Electric Power Technologies Company Limited (CET), the State Grid subsidiary that will build the line, said the price it asked for was fair. "It's a very reasonable cost," said Fiaz Ahmad Chaudhry, managing director of Pakistan's National Transmission & Despatch Company (NTDC) referring to the overall State Grid contract.



The transmission line project was conceived as a government-to-government contract to build a 878-km (545-mile) connection between soon-to-built power plants near the coastal town of Matiari and Pakistan's industrial heartland by the eastern city of Lahore.

According to Pakistani officials, no formal competitive bidding was sought for the project, which was finally awarded in December last year.
Riaz Haq said…
By some measures, the MDBs today are not only existing
but thriving, with demand for their financing and services
growing. But this picture belies a critical need for reinvention
if they are to rise to meet today’s pressing challenges effectively.
In particular, the legacy MDBs—the World Bank, the InterAmerican
Development Bank (IADB), Asian Development
Bank (AsDB), African Development Bank (AfDB), and European
Bank for Reconstruction and Development (EBRD)—
have been slow to adjust to many of today’s realities, starting
with the increasing economic role and growing capability of
their borrowers. For example, their major shareholders have
agreed to only minimal adjustments in corporate governance
systems and leadership selection, creating tensions with major
borrowers who want more voice and influence over their policies
and operations. With age, MDBs have become bogged
down in bureaucracy, increasing delays and raising costs to
borrowers, particularly for major infrastructure projects. Perhaps
in frustration, China and other major borrowers have
taken leadership in creating two new MDBs focused heavily
on infrastructure: the Asian Infrastructure Investment Bank
(AIIB) and the New Development Bank (NDB).

Beyond business-as-usual on
concessional financing. Shareholders should commit to
maintain current levels of concessional support across all
MDBs, implying at least $25 billion in concessional lending
annually over the next decade (and possibly more given
the possible additional amounts the AIIB might provide on
concessional terms). As a growing number of countries graduate
from concessional assistance to non-concessional borrowing
and other forms of engagement with MDBs, this baseline
commitment should allow for increased support in the remaining
poor countries, and for allocation of concessional funding
to countries in crisis and to post-conflict reconstruction,
especially at the World Bank (see Recommendation 4). In
addition, given the expected concentration of poor countries
in Sub-Saharan Africa, there should be a shift in concessional \


Why the slowness to adapt? One reason is that age and
bureaucratic growth have taken their toll, particularly at the
World Bank, where political pressures and the close scrutiny
of NGOs have affected its operations by making traditional
donors very—and perhaps excessively—risk averse to stories
of corruption, waste, human rights abuses, and environmental
injustices.10,11 In response to these pressures, the legacy MDBs
have gradually become burdened with a proliferation of rules
and processes that are meant to eliminate corruption and
safeguard legitimate aims such as environmental and social
protection, but that often fail to do so effectively or to serve
the institutions’ broader development mission. The result is
widespread borrower frustration with the hassle factor that
increases the costs and delays of major infrastructure projects.
Another reason is that adjustments in the legacy MDBs’
governance have been modest, with the largely western donor
“creditors” dominating the official governance arrangements.
Slow adjustments in governance, especially at the World
Bank, have frustrated the political ambitions of emerging
markets to assume greater leadership at the global level—
through increased capital participation, voting power, and
influence on these and other operational issues that affect
them as borrowers.
The initiative of China and other emerging markets to set
up their own institutions—the AIIB and the NDB—reflects
these two factors.
Riaz Haq said…
China is staking a claim to supplanting the U.S. as a Pakistan’s most influential ally with tens of billions of dollars of investment, an embrace that promises Pakistan economic benefits and saddles it with debt—ensuring the relationship will last.
Saeed Shah

ISLAMABAD—Pakistan’s ruling power structure has long been summed up with the saying “Allah, Army and America.”
China is now staking a claim to supplanting the U.S. with tens of billions of dollars of investment, an embrace that promises Pakistan economic benefits and saddles it with debt—ensuring the relationship will last.
Chinese President Xi Jinping has made Pakistan his flagship partner in a program to spread Chinese-built infrastructure—and Beijing’s sway—across Asia and beyond. Pakistan has so far signed on to $55 billion in Chinese projects, many of them guaranteeing China a high return on its investments and granting tax breaks to Chinese companies.
Former President Barack Obama’s “Asia pivot” is giving way to Mr. Xi’s infrastructure juggernaut, in a model that could be replicated across the region.
“China came in when no one else was willing to invest,” said Commerce Minister Khurram Dastagir. The U.S. missed its chance, he said.

Beijing calls its program “One Belt One Road,” referring to the ancient sea and land Silk Road trade routes that China seeks to revive. Pakistan Prime Minister Nawaz Sharif inaugurated the program’s first big completed project here in late May, a Chinese-built, coal-fired power plant in his home province of Punjab.
China is building roads, railways, power plants and a port, and has lent Pakistan $2 billion in under two years to shore up its foreign-exchange reserves.
A promised $1 trillion Chinese splurge hasn’t yet materialized for many countries. But in Pakistan, $18 billion in projects are under construction in what is known as the China Pakistan Economic Corridor.
The centerpiece is Pakistan’s Arabian Sea port at Gwadar, under expansion and run by a Chinese company to enable trade in goods from China’s southwest.
Pakistan calculates that the Chinese investments will add 2 percentage points to growth in the next few years by providing infrastructure needed to kick-start industrialization.
President Donald Trump has abandoned what was viewed by the Obama administration as a counterbalance to China, a trade deal with nations in the region called Trans Pacific Partnership. An American official said civilian aid to Pakistan, a longtime ally, remained substantial but “getting our message out is a challenge.”


“We want to move away from geopolitics, to geoeconomics, from fighting wars for others,” said Ahsan Iqbal, Pakistan’s planning minister, who oversees the Chinese investment. “Our vision is to place Pakistan as the hub of trade and commerce in this region.”
China’s expenditure isn’t aid. With transport projects, Pakistan incurs debt; power plants come with an obligation for Pakistan to purchase the electricity produced.
Tahir Mashhadi, a senator from the opposition Muttahida Qaumi Movement, compared China to the East India Company, the commercial enterprise that colonized India before the British government took over.
“Here’s the danger: the banks are Chinese. The money is Chinese. The expertise is Chinese. The management is Chinese. The profits are for China. The labor is Chinese,” said Mr. Mashhadi.
Nadeem Javaid, chief economist at Pakistan’s planning ministry, said Pakistan would be paying $5 billion a year to China by 2022, but that the debt should be easy to manage as Pakistani exports rise, electricity prices fall, and toll revenues are generated from trade from China to Gwadar.
“The fears,” he said, “are not genuine.”

Riaz Haq said…
Pakistan’s old economic vulnerabilities persist

Massive Chinese projects actually exacerbate some of them

On June 16th the IMF warned of re-emerging “vulnerabilities” in Pakistan’s economy. It praised GDP growth of above 5% a year, but noted missed fiscal targets and a ballooning current-account deficit. The fund’s own projections a year ago for the fiscal year ending this June underestimated this deficit by about half the final total of $9bn. And based on trends in early April it overestimated the fiscal-year-end foreign-exchange reserves by $3bn.

Independent economists point out that, many times before, collapse has come on the heels of an IMF programme’s conclusion. Sakib Sherani, a former government economist, says that to avoid “egg on its face” for cheerleading Pakistan’s economic recovery just months ago, the IMF is slowly changing its story. By the end of 2018, many predict, Pakistan will come begging again. The fund responds that it is “too early to speculate”.

Some of Pakistan’s faltering can be blamed on bad luck, such as a fall in remittances from workers in the Middle East. But mostly it was, as usual, bad policy. Like its predecessors, the PML-N has failed to enact the structural reforms needed to break Pakistan free of its cycle of crises. Barely any goals of the IMF’s programme were met. Bloated, underperforming or, in the case of Pakistan Steel Mills, closed-down publicly-owned enterprises drain millions from the government each month. “Circular” debt, caused by delayed payments along the electricity-generation chain, is swamping the energy sector once more.

Annual exports have declined by 20% in dollar terms since 2013, stymied by an overvalued currency. All this means the government is again borrowing hand over fistfrom local and foreign banks. In some cases the design of the IMF programme itself has added to Pakistan’s woes: by pushing for increased tax revenue above all else, it has allowed the government to clobber the poor with indirect taxes, milk the (few) direct taxpayers even further, and, as ever, ignore the wealthy elites.


The source of funds is changing even if government recklessness is not. China plans to invest $62bn in Pakistan for a range of projects, particularly power plants, around the 3,000km (1,875-mile) China Pakistan Economic Corridor (CPEC). That could lift Pakistan to more stable prosperity. But paying for the CPEC will not be easy. Unlike loans from the IMF or World Bank, some two-thirds of those taken out so far, for $28bn-worth of early projects, are on commercial terms, with interest high at around 7% a year. When these loans come due, argues Farooq Tirmizi, an emerging-markets analyst, Pakistan will need a bigger bail-out than ever before.

The IMF has concerns about the lack of transparency surrounding Pakistan’s CPEC debts and how it will repay them. Any future fund lending to the country may include conditions that sow discord between the country and its new patron. And with President Donald Trump in charge of America’s foreign policy, there is no guarantee that the old one, America, will prove as generous—in the event of a crisis—as it has in the past.

Riaz Haq said…
Here's another example of FUD against CPEC by Christine Fair:

Pakistan Can’t Afford China’s ‘Friendship’
Pakistan's elites think Chinese cash can save the country. They're wrong.

In recent months, the Chinese-Pakistan Economic Corridor (CPEC) has left Pakistanis emboldened, Indians angry, and U.S. analysts worried. Ostensibly, CPEC will connect Pakistan to China’s western Xinjiang province through the development of vast new transportation and energy infrastructure. The project is part of China’s much-hyped Belt and Road Initiative, a grand, increasingly vague geopolitical plan bridging Eurasia that China’s powerful President Xi Jinping has promoted heavily.

Pakistani and Chinese officials boast that CPEC will help address Pakistan’s electricity generation problem, bolster its road and rail networks, and shore up the economy through the construction of special economic zones. But these benefits are highly unlikely to materialize. The project is more inclined to leave Pakistan burdened with unserviceable debt while further exposing the fissures in its internal security.


Despite the bold claims made by China and Pakistan, there are many reasons to be dubious about the purported promises of CPEC. There’s already violence all along the corridor. The north-most part of CPEC is the Karakoram Highway (KKH), which gashes through the Karakoram Mountain Range to connect Kashgar in Xinjiang with Pakistan’s troubled province of Gilgit-Baltistan. Xinjiang is in the throes of a slow-burning insurgency by the Muslim Uighur minority against the Communist state. Gilgit-Baltistan, a Shiite-majority polity under the thumb of a Sunni-dominated Pakistan, is part of the above-noted contested territory of Jammu-Kashmir. Here, geology and weather further limit CPEC. The Karakoram Highway, a narrow road weaving through perilous mountains, can’t bear heavy traffic. Expanding the KKH will not be easy. Residents of Gilgit-Baltistan worry about the environmental costs in relation to the few benefits they will enjoy. There have been episodic protests, which the Pakistani government has ruthlessly put down. Meanwhile, Gwador is experiencing a prolonged drought, frustrating the project while the four extant desalination plants remain idle.

In the south, CPEC is anchored to the port at Gwador in Pakistan’s insurgency-riven Balochistan province. The local Baloch people deeply resent the plan because it will fundamentally change the demography of the area. Before the expansion of Gwadar, the population of the area was 70,000. If the project comes to full fruition the population would be closer to 2 million — most of whom would be non-Baloch. Many poor Baloch have already been displaced from the area. Since construction has begun, there have been numerous attacks against Chinese personnel, among other workers.

There’s also the stubborn problem of economic competitiveness. For CPEC to be more competitive than the North-South Corridor that is rooted to the Iranian port of Chabahar, Gwador needs to offer a safer and shorter route from the Arabian Sea to Central Asia. For that to happen, Gwador needs to be connected by road to the Afghan Ring Road in Afghanistan’s Kandahar province, which is under sustained attacks by the Afghan Taliban. Alternatively, a new route could connect Gwador with the border crossing at Torkham (near Peshawar) by traveling up Balochistan, with its own active ethnic insurgency, through or adjacent to Pakistan’s Federally Administered Tribal Areas, which is the epicenter of Islamist terrorism and insurgency throughout Pakistan. It takes great faith — or idiocy, or greed, or all of the above — to believe that this is possible.
Riaz Haq said…
Clearly, the so-called stakeholders that include the US, the EU, Russia, India and Japan seem either not to have understood the $4 trillion venture across 69 countries meant presumably to project China’s strategic vision for global peace, won through mutually beneficial economic cooperation or they are so fearful of being swamped by its success that they want to stop it before it takes off.

A study of the Silk Road Economic Belt by the Friedrich-Ebert-Stiftung (FES) and the Stockholm International Peace Research Institute (Sipri) has identified potential issues that may negate any benefits the initiative brings.

The study speculates that the Chinese will likely accept or reject projects based on whether they serve the needs of Chinese industry, rather than what they bring to the recipients.
It also suspects that political tensions between different countries may impede the smooth rollout of projects.

Local elites, the study further suspects, may corner the “spoils” from new projects, thereby exacerbating social tensions. It has also expressed fears that labour rights and environmental protection may not be given the attention they deserve.

Therefore, the study recommends that:

The EU put forward a joint consultative mechanism with China to ensure projects are implemented smoothly, by ensuring all stakeholders have a hand in planning and supervision. Official development assistance programmes in BRI recipient countries should, include assistance in project evaluation. Organisations such as the UNDP and the UN Economic and Social Commission (ESC) for Asia should advise recipient countries on the impact and viability of planned projects. BRI loans should not be allowed to breach the debt burden thresholds determined under the World Bank-IMF debt sustainability framework. And finally, the Belt and Road Initiative needs to attract private capital as there are around $8.5 trillion “sitting in cash, waiting for better investment opportunities”. Bringing in private capital would increase the scale of BRI, open it to non-Chinese companies and allow projects to be implemented more efficiently.

It was perhaps in this frame of mind that some of the delegates at the May Belt and Road Forum had called for a rules-based approach, sensitive to the developmental needs of recipient countries. The stakeholders such as the US, the EU, Russia, India and Japan, according to the study, need to coordinate among themselves and engage with China to promote more transparent partnerships.

Meanwhile, the China-Pakistan Economic Corridor (CPEC) continues to bug India. Out of fear of being overwhelmed socio-economically by China’s Road and Belt Initiative (RBI) India seems to have decided to create problems for the initiative. To start with it has decided not to attend any events connected with the BRI Forum.

What India is most worried about, however, is a collection of infrastructure projects under the label of CPEC, currently under construction throughout Pakistan. It traverses territory which India considers to be disputed. China officially claims not to take sides in the Kashmir dispute, but India believes it has done so by finalising CPEC with Pakistan and ignoring India’s position. As well as compromising India’s territorial integrity, CPEC, in India’s view, is raising other concerns about BRI projects.

India’s version on Gwadar port: the seaport has been leased to China until 2059. Chinese companies are operating the port, developing a 1,000-hectare Special Economic Zone nearby, and building an international airport with a Chinese grant of $230 million. These actions are certainly not driven by altruism. They reflect the strategic value to China of access to the Arabian Sea and proximity to energy-rich West Asia. It should be no surprise that Chinese naval submarines have been spotted in Gwadar.
Riaz Haq said…
Denigrating CPEC
As the CPEC early harvest projects near fruition, detractors are stepping up their propaganda to denigrate the mega project

As the early harvest projects of CPEC near fruition, detractors are stepping up their propaganda to denigrate the mega project. Christine Fair, of the Foreign Policy magazine has jumped into the fray to disparage CPEC. Christine Fair is an associate professor at the Centre for Peace and Security Studies (CPASS), within Georgetown University’s Edmund A. Walsh School of Foreign Service. Author of the 2014 book Fighting to the End: The Pakistan Army’s Way of War has been criticized for her hawkish rhetoric, riddled with factual inaccuracies, lack of objectivity, and being selectively biased viewpoints. Her pro-drone stance has been denounced, and called "surprisingly weak" by Brookings Institution senior fellow Shadi Hamid. Journalist Glenn Greenwald dismissed Fair’s arguments as "rank propaganda", arguing there is "mountains of evidence" showing drones are counterproductive, pointing to mass civilian casualties and independent studies. Fair’s journalistic sources have been questioned for their credibility and she has been accused of having a conflict of interest due to her past work with U.S. government think tanks, as well the CIA. She has also been rebuked for comments on social media perceived as provocative, such as suggesting burning down Pakistan’s embassy in Afghanistan or asking India to "squash Pakistan militarily, diplomatically, politically and economically." She has been accused of double standards, partisanship towards India, and has been criticized for her contacts with dissident leaders from Balochistan; a link which "raises serious questions if her interest in Pakistan is merely academic."

China constructed the Karakoram Highway across Gilgit Baltistan in 1974. For forty years, the Indian government found no cause for concern, but is now suddenly raising alarm bells with the advent of CPEC
In her latest Op-Ed titled ‘Pakistan can’t afford China’s friendship’ carried by Foreign Policy issue of July 3, 2017, Ms Fair plays to the Indian gallery by claiming that Pakistan has been emboldened by the CPEC to take on India.

Firstly, she conveniently remains oblivious to the fact that India has upped the ante in Occupied Kashmir by killing more than 200 Kashmiri youth and blinding 3,500 children by firing pellet guns at their eyes. To hide its own atrocities against the hapless Kashmiris, India is incessantly violating the ceasefire agreement across the LOC and killing innocent civilians besides staging fake encounters to malign Pakistan. Indian government has formally protested to the Chinese leadership that portions of CPEC traverse through Azad Jammu Kashmir and Gilgit Baltistan, which are disputed territory. Chinese government has responded that CPEC is an economic project and not a strategic one. Moreover, China has invited India to become a part of CPEC to benefit from the mega project as well as address its grievances or misgivings.

The fact is that China constructed the Karakoram Highway across Gilgit Baltistan in 1974. For forty years, the Indian government found no cause for concern, but is now suddenly raising alarm bells with the advent of CPEC.
Riaz Haq said…
#Pakistan Sees Bigger #LNG Profile; Imports to Surge From 4.5 Million Tons in 2016 to 30 Million Tons by 2022

Pakistan says it could become one of the world's top-five buyers of liquefied natural gas (LNG), with Petroleum Minister Shahid Abbasi predicting imports could jump more than fivefold as private companies build new LNG terminals.

Outlining Pakistan's ambitious plans - which, if fully implemented, could shake up the global LNG market - Abbasi told Reuters that imports could top 30 million tonnes by 2022, up from just 4.5 million tonnes currently.

Cheaper than fuel oil and cleaner burning than coal, LNG suits emerging economies seeking to bridge electricity shortfalls and support growth on tight budgets.

(For a graphic on LNG market share by region click

"Within five years, I don't see any reason why we should not be beyond 30 million tonnes (in annual LNG imports). We will be one of the top five markets in the world," Abbasi said.

That kind of jump would represent one of the fastest growth stories in the energy industry, comparable to what China has done in many commodities - but there are doubts whether Pakistan can achieve its ambitions, given the complexity and cost of expansion projects.

"It's always possible, but seems very difficult as they will need much more (regasification) capacity and downstream pipeline capacity," said Trevor Sikorski at Energy Aspects, a London-based industry market researcher. "There are infrastructural issues and financial issues."

"Still, it is one of the key LNG growth markets, and its demand will help tighten up the market that has threatened to lurch into over supply."

Abbasi said no one took Pakistan seriously after a decade of botched attempts to bring LNG to the country, but this has changed with the construction of new LNG terminals and gas plants. He said foreign suppliers are now arriving in Pakistan - where energy shortages have prompted Prime Minister Nawaz Sharif to promise he'll end the country's frequent blackouts.

"Before, we used to go out to talk to LNG suppliers. Now they're coming to us," Abbasi said.

"(LNG) is really what has saved the whole energy system. It has been a huge success in Pakistan and it will continue," he said after Sharif on Friday inaugurated a new Chinese-built LNG power plant that uses General Electric turbines.


Pakistan built its first LNG terminal in 2015 and, after some delays, a second terminal is due to come online in October, doubling annual import capacity to about 9 million tonnes.

A consortium of Exxon Mobil, Total, Mitsubishi, Qatar Petroleum and Norway's Hoegh is expected to decide by September whether to build a third LNG terminal for about $700 million, Abbasi said.

Pakistan has dropped plans to finance up to two more terminals, as private companies have said they would finance these themselves and use Pakistan's existing gas network to sell directly to consumers.

"That's been the real success and that's where the growth will come from," Abbasi said, adding that about 10 million homes are linked to gas connections in Pakistan - a nation of around 200 million.

"In the last four years, we would have added two million additional connections. We are really ramping that up."

If Pakistan achieves its ambitious development goals, it could significantly erode market oversupply, which has helped pull down Asian LNG spot prices by more than 70 percent since 2014 to around $5 per million British thermal units (mmBtu).
Riaz Haq said…
Pakistani universities must capitalise on Chinese investment
The $50 billion China-Pakistan Economic Corridor is a huge opportunity to build academic capacity in Pakistan, say Abdur Rehman Cheema and Muhammad Haris

The China-Pakistan Economic Corridor (CPEC) unveiled by Chinese president Xi Jinping in 2013, is frequently referred to in Pakistan as a potential economic game changer. Now in its first phase of implementation, it will see the Chinese government pump more than $50 billion (£40 billion) into improving transport links and energy cooperation between China and Pakistan.

Hardly any attention has been paid, however, to how this opportunity might be leveraged to build the technological capacity of Pakistan’s universities. And, so far, academics have been conspicuous by their absence from those clamouring for a share of the pie.

There is no question that universities have a lot to offer in terms of economic development. Introduced in the late 1990s, the Triple Helix concept of university-industry-government relationships has transformed the social role of higher education in many developing countries, casting them as central to the transition to a knowledge-based society, whose policies all three players combine to shape. Although it is not easy to implement in countries that lack research universities or global businesses, studies suggest that the approach generally leads to greater scientific productivity, for instance.

Pakistani universities need to capitalise on China’s own desire to shift itself from a symbol of mass production to a knowledge-based economy. They need to align their strategies with Chinese companies’ existing strengths in information technology, railways, manufacturing and energy. And they need to approach both Chinese firms and the Pakistani government to identify the technical skills areas in which the demand for workers can be expected to rise, and implement new diplomas and short courses accordingly.

Networking is also an important tool that can help bring the spheres of government, industry and the academy together. Pakistan’s Higher Education Commission, which regulates all of its universities, should take the lead and help to start this conversation within universities and research centres, incentivising their interaction with existing firms, as well as establishing incubation facilities for new ones on university campuses, including granting them shared access to university facilities.

CPEC also offers an opportunity to address Pakistan’s rampant inequality. In the country’s poorest province, Balochistan, the federal government could help local politicians and tertiary education providers to set up inclusive business incubation centres charged with developing customised, socially useful entrepreneurial approaches. Drawing on the Chinese experience of poverty reduction, such measures could start to build skilled human resources able to contribute to local and national economic development.

For example, developing local expertise in processing copper – which is mined in Balochistan – could help Pakistan to save the cost of importing the metal after the ore is exported to China for refinement.

The Balochistani port of Gwadar, a gateway to the Middle-Eastern and African markets, is one of the nodes of CPEC and will be connected by new road and rail links to the far western Chinese city of Kashgar, in Xinjiang Province. This offers many business opportunities for Pakistani and international businesses, and local universities could both catalyse and benefit from this if they set up business research excellence centres aimed at helping to improve the quality of the goods and services to be exported.
Riaz Haq said…
Cultural Caravan with 8 #Chinese & 8 #Pakistani artists to travel in 3 segments of #CPEC. #Culture #China #Pakistan

Chinese and Pakistani artists, eight from each country, will travel in a cultural caravan in three segments of the China Pakistan Economic Corridor (CPEC), each segment spanning a maximum of ten days’ duration.

“Creative Caravan of artists, musicians and film makers from China and Pakistan traversing the CPEC and documenting Art and Culture en-route,” said PNCA officials.

The Silk route has played a significant role in the culture and economy of the region through the history.

Its visionary transformation into CPEC will be seen as the most powerful engine of change, development, progress and economic turnaround for the entire region.

According to schedule the first segment will undertake the Western Passage covering route from Peshawar to Gwadar.

The second segment will take the Eastern Passage from Karachi to Islamabad while also taking detour between Eastern Western and Central Passages.

The third segment will cover Northern Passage starting from Kashgar and culminating at Islamabad.

Timings of the three segments of the caravan will be decided keeping climatic and other factors in mind.

The film makers will have all their equipment including editing systems with them so they can continue editing their films and also engage local talent in the process of filming and editing.

The painters and photographers will be encouraged to engage with local enthusiasts in creative processes by sharing their knowledge and skills with them and also letting them to take pictures and paint images.

The musicians will not only document local folk music but also perform at different places and interact with local musicians.

Riaz Haq said…
CPEC Fears and My Response
Published on September 6, 2017
LikeCPEC Fears and My Response
Hamza Orakzai

1. 91% of the income from Gwadar Port goes to the Chinese and 9% to Pakistan.

Reply: Can you kindly point out what's wrong with this model especially when all the liabilities and investments lie at their end? In past 7 decades, not only our government has failed to develop the port but also ignored the importance of its geostrategic location, and currently, doesn't have the resources to develop it even if they want to for next 3 decades or so. Every Pakistani still gets to use the port and enjoy the benefits from its development. The port is a window to the economic activity it will generate in the country.

2. Chinese companies get preferential treatment and tax exemptions (making it impossible for local companies to compete and opens the Pakistani market for a commercial invasion)

Reply: The statement is completely misleading. Only CPEC projects get tax exemptions, mainly in the power sector, because we are in dire need to mitigate the losses due to the energy crisis in Pakistan. Moreover, tax exemption also drives down the cost of building these strategic projects, which results in lower tariffs and repayments.

(Impossible is a strong word. Construction companies in Pakistan are working at their full capacity, turning down projects due to output issues. Commercial Invasion? I think mentioning special economic zones would be more relevant since the argument of building infrastructure has no correlation with the commercial viability of businesses.)

3. Money for the road network comes from Pakistan (so we're paying for the roads China will use to export stuff to us and the world)

Ans: Let me break the statement into 2 parts:

1) The Road; 2) The Money

1) The Road: The roads built under CPEC will be the property of National Highway Authority and will generate revenue through the toll tax. Moreover, as a Pakistani, will you want strategic roads in the country to be the property of a foreign country?

2) The Money: These projects are being built on Engineering-Procurement-Construction+Finance (EPC+F) Model. Finance comes from China and our government takes it as a concessionary loan. Same as ADB model. But the difference is that Chinese companies are mandated to complete these grand projects within 24-36 months. There needs to be open bidding for these projects, but then again, it will push the timeline of the CPEC to 30 years instead of 15 years.

4. Of the original $50b, over $30b was loans to build power plants for which we'll pay a) interest to Chinese banks b) exorbitant profits to Chinese companies who will build and supply to these plants c) guaranteed profits to the Chinese companies that will operate and own these plants d) backed by sovereign guarantee

Ans: This figure is completely incorrect. All the power projects under CPEC are BOOT (Build-Operate-Own-Transfer) basis which means that investment, loans, and liabilities are all the investor problems. Our problem is to pay for the electricity they produce. No loan has been acquired so far by the government of Pakistan for energy projects.

a) We have nothing to do with the interest rates.

b) Getting a payback for what you invested is a very fair request so don't know what's wrong with it?

c) Guaranteed profits because we have PKR 800 billion in circular debt? Why would anyone even want to invest? Would you?

d) Same as above.

5. We're making commitments to buy electricity at over 8 cents from coal-based plants and India is buying solar electricity at 4 cents (solar price is crashing every year). This will make our manufacturing uncompetitive for the next 15 years or longer.

Ans: We have a problem in this argument. First, we are comparing apples to oranges. The feed-in tariff for coal power plants is around PKR 8/Kwhr in India as well. Although it's a lengthy discussion,

Riaz Haq said…
Chinese perceptions of CPEC

The Chinese have voiced concerns regarding negative CPEC talk, security and red tape.

Under its One Belt One Road Initiative announced in 2013, China is planning to invest more than $1 trillion in 60 countries all over the world to establish six different corridors. The receptivity in other countries to this proposal has been anything but enthusiastic; however, some Chinese friends are puzzled by the sceptical and negative reactions from certain quarters in Pakistan expressed in the media, particularly on social media. This comes to them as a surprise because of the long uninterrupted record of strong bilateral relations between the two countries that were not even affected by changes in political leadership in either country. CPEC is the first project of its kind to foster economic cooperation on a massive scale for building large infrastructural projects in Pakistan.

Although realising that there are some external forces hostile to this initiative, Chinese analysts and participants are concerned about what they see as the misrepresentation of facts by many Pakistanis. It is not obvious to them as to what purpose is served by raising doubts and fears about CPEC in the minds of the Pakistani population. The aspersions being cast on the motives of the Chinese, such as the analogy with the East India Company or Pakistan becoming a satellite of China, are very unnerving: external detractors of CPEC pick up these reports and after bundling them as ‘risks’ of CPEC to Pakistan, disseminate them widely.

The Chinese argue that the IPPs have been a policy instrument for investment in Pakistan’s energy sector for a very long time. When the country was facing serious energy shortages no one else came to Pakistan’s rescue and invested in the sector. Now that China has come forward with a planned investment of $35 billion or 70 per cent of the total CPEC allocation under the same policy, questions are being raised.

Had it involved extraction of natural resources from Pakistan for the benefit of the Chinese, this criticism would have been justifiable. On the contrary, the benefits of this investment would be exclusively appropriated by Pakistan’s industries and households that would no longer face load-shedding while the country would record a 2pc annual rise in GDP growth.

Chinese state-owned companies, designated by the Chinese government based on their expertise and experience, are executing the projects with loans provided by government-owned banks on concessional terms both in tenor and pricing. In several projects, Chinese and Pakistani companies have entered into joint ventures. The repatriation of profits and debt-servicing in foreign exchange arising out of these obligations would become possible after an increase in the volume of exports as a result of the Chinese-Pakistani joint ventures relocating their industries to the Gwadar Free Economic Zone and the nine industrial zones to be established under CPEC.

In the opinion of some, the negative feelings can have unintended adverse consequences for the personal security of Chinese nationals working on these projects, particularly in some sensitive areas of Balochistan. Some elements unhappy with the Pakistani state and government and possibly acting at the behest of foreign powers hostile to CPEC appear to have created conditions in which the murders and kidnappings of Chinese nationals that were almost non-existent have begun to take place. Our interlocutors were grateful for the new division being raised by the Pakistan Army for protection of the Chinese; but the security risk is raising premiums for relocation to some of the vulnerable areas.
Riaz Haq said…
Pakistan targets import curbs to ward off currency crisis

Abbasi to impose fresh curbs on luxuries in effort to avoid devaluing rupee

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Pakistan plans to tighten curbs on luxury imports to ward off a foreign currency crisis without devaluing the rupee, Shahid Khaqan Abbasi, the prime minister, has said.

Mr Abbasi said he would rather place further controls on imports in an effort to preserve fast-dwindling foreign reserves than allow the rupee to fall against other currencies.

Some experts believe Pakistan will have to request another bailout from the International Monetary Fund within a year.

In March, the Pakistani government made it harder to import non-essential items such as vehicles, mobile phones, cigarettes and jewellery by insisting buyers put down 100 per cent of the cash upfront.

The measure drew criticism that it would encourage people to trade instead on the black market. The IMF said it had been told by Pakistani officials that the restrictions would be removed within a year but Mr Abbasi told the FT his government was planning to impose more.

“We can put regulatory duties on certain items, especially luxury finished goods, that’s possible,” he said. “We probably will do more of that, yes definitely, to discourage imports.

“Currency devaluation is not on the table, it’s not. A lot of people thought it was . . . [but] it is important to have stability for the rupee,” said Mr Abbasi.

Pakistan is running out of foreign currency as exports and payments from Pakistanis abroad fall while imports rise.

The central bank had $14.3bn of foreign reserves as of September 15, according to the most recent data — enough to cover exports for about three months. That is down from a high of $18.9bn last October.

Pakistan has been importing more than it exports for some time, but the problem has been exacerbated by having to buy Chinese supplies for projects as part of the $55bn China-Pakistan Economic Corridor.

While the scheme is aimed at improving Pakistan’s energy supply and transport networks, many economists believe that in the short term it will push Islamabad back towards the IMF.

“We will have to go back to the IMF any time now,” said Muhammad Zubair Khan, a former commerce minister who worked at the IMF for more than a decade. “The current situation is not sustainable.”

Sakib Sherani, a former economic adviser to the government, warned: “From a balance of payments crisis, we will have a full-blown macroeconomic crisis, where private sector sentiment is hit, growth stalls, inflation is high, and the central bank has to act.”

As well as restricting imports, the country has also borrowed money at short notice from various international lenders to pay off its debts. In 2016 and early 2017, Pakistan borrowed $1.2bn from state-backed Chinese banks.

Many economists believe the only long-term way out of the crunch is to allow the rupee to fall, encouraging exports and discouraging imports.

But doing so has become politically sensitive, with ministers insisting on a strong currency while central bankers warning of the likely consequences.

In July, the rupee suddenly fell 3 per cent, having traded in a narrow band since 2015. Central bank officials said they had backed away from shoring up the currency, but the move drew an angry response from the government, which stepped in to boost its value again before replacing the acting governor.
Riaz Haq said…
Development firm announce plans for first master community development for private market

"We believe Gwadar is following in the footsteps of Shenzen which represented a historic population rise, from a population of 30,000 in 1980 to 11 million people in 2017. Gwadar is poised to see massive population growth due to incoming industries, and we expect this to be one of the most strategic cities in South Asia."

Leading private investment house China Pak Investment Corporation today announced its acquisition of the 3.6 million square foot International Port City project in the city of Gwadar. The investment company is currently revising the scheme's plans in line with international developments standards and will be developing the first of its kind $150 million gated master community tailor-made for the expected 500,000 incoming Chinese professionals expected in Gwadar by 2022.

(Photo: )
The project which is expected to be renamed China Pak Hills hails an exciting new phase in the development of the port of Gwadar, the 'Gateway City' to the $62 billion China Pakistan Economic Corridor (CPEC), the largest unilateral foreign direct investment from one nation into another. The CPEC is set to catapult Pakistan's stature as a key global trade and economic hub and includes a bouquet of projects currently under construction that will not only improve Pakistan's infrastructure, but will deepen the economic and political ties between China and Pakistan.

Hao-Yeh Chang, Corporate Communications Director for China Pak Investments Corporation commented, "We believe Gwadar is following in the footsteps of Shenzen which represented a historic population rise, from a population of 30,000 in 1980 to 11 million people in 2017. Gwadar is poised to see massive population growth due to incoming industries, and we expect this to be one of the most strategic cities in South Asia."

The final master plan for China Pak Hills is currently being refined in Hong Kong, and will feature a range of state-of-the-art amenities including an open-air shopping boulevard; indoor shopping mall; restaurants and eateries; an international school & nursery; six community parks; indoor and outdoor sports facilities including tennis courts and a resident's gymnasium; a water desalination plant and recycling centre. China Pak Hills will also be home to the Gwadar Financial District, catering to the growing financial sector and adding much needed A Grade office space to Gwadar's growing market.

One Investments Ltd, a UK-based property investment company, headed by Zeeshan Shah, have been appointed as Global Master - Agent for the Development. "China Pak Hills is a unique and exciting opportunity. The level of investment and commitment made by the Chinese government in the CPEC guarantees that Gwadar is going to be one of the most important trading and access points in the World. Its geographic position, combined with the infrastructure being created through the CPEC means that it can only grow exponentially."

The China Pak Hills master-community is being developed by China Pak Investments and is soon expected to announce options for private sale of limited plots to end purchasers.
Riaz Haq said…

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.
Riaz Haq said…

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.
Riaz Haq said…
Who’s Afraid of 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.
Riaz Haq said…
Former 'Economic Hitman' Reveals to Sputnik How CIA, NSA Conceal Activities

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
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.
Riaz Haq said…
Former 'Economic Hitman' Reveals to Sputnik How CIA, NSA Conceal Activities

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
from another consulting company, a rival of my former employer. They told me: "Accept our oer
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
Riaz Haq said…
Confessing to the Converted

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.
Riaz Haq said…
Xinhua Headlines: Economic corridor changes Pakistan's business, economic landscape
Source: Xinhua| 2018-06-08 13:35:15|Editor: Lu Hui

ISLAMABAD, June 8 (Xinhua) -- Five years after its launch, the China-Pakistan Economic Corridor (CPEC) has achieved magnificent results that help lay a solid infrastructure foundation for Pakistan's economic development.

Under the long-term and systematic framework of CPEC, several projects in areas of energy, transportation infrastructure and port construction have been completed.

Pakistan's Ministry of Energy said that the completed CPEC power projects have brought a great change in the energy sector by bringing the power cut hours to zero form 12-14 hours a day in 70 percent of the country.

Two coal-fired power projects equipped with the latest state-of-the-art environment-friendly technology -- the 1,320-megawatt Sahiwal coal-fired power project in the country's Punjab and the Port Qasim coal-fired power plant with the same capacity in southern port city Karachi -- have already started production.

The two projects are expected to generate 18 billion KWh of electricity together annually, which can cater for the needs of eight million local families.

The CPEC power projects not only have eased daily lives of Pakistanis but are also creating hundreds of thousands of jobs by helping restart the industries that were closed due to power shortage.

Besides the coal-fired power plants, CPEC also provides new energy to Pakistan so as to diversify the country's energy sources to maintain its energy security. Part of the Quaid-e-Azam Solar Park is functional and three wind power farms are also supplying electricity in southern Sindh province, while two such projects will also start their commercial operations later this year.

Pakistan's Ministry of Planning, Development and Reforms said that energy projects under CPEC will double the energy-thirsty country's current capacity of electricity production after their completion.

Yasir Rehman, an anchor from the official Pakistan Television, said that the developed infrastructure under CPEC is bringing stimulus to the Pakistani economy, creating jobs and improving business by starting a constructive process.

"Uninterrupted power supply is helping industries increase production, creating an ideal atmosphere for Pakistan's economy," said Rehman, adding that with the functionalized Gwadar port, CPEC will benefit every common Pakistani.

Gwadar, the ending point of CPEC, which was once an ignored small sluggish fishing town located at the Arabian Sea in Pakistan's southwest Balochistan Province, is now witnessing a wave of development projects which are creating new opportunities for employment and business.

Gwadar port, with the fully functional port terminal, regular cargo service, free zone, business center, is a symbol of future development and prosperity of Pakistan.

According to China Overseas Ports Holding Company (COPHC), the port's operator, some 20 companies in different businesses have already joined the Gwadar free zone with direct investment of 3 billion Chinese yuan (over 460 million U.S. dollars).

Gwadar's local people are feeling the development impetus triggered by the rapidly developing port, construction of new roads, establishment and upgrading of educational institutions and hospitals, construction of a new international airport and installation of water purification plants.

Thousands of people, from laborers to businessmen, have migrated from across the country to Gwadar to grab emerging opportunities for business and employment since the launch of CPEC.

In the meantime, CPEC has also brought major improvements and overhauls to Pakistan's transportation infrastructure by upgrading and reconstructing already existing roads and building new superhighways.
Riaz Haq said…
Western route of CPEC to be completed earlier than eastern route: Chinese envoy

Acting Ambassador of the People’s Republic of China, Zhao Lijan Friday said that under the China Pakistan Economic Corridor (CPEC), western route of the project would be completed earlier than the eastern route.

Speaking at the National Press Club here about CPEC Project, the Chinese envoy dispelled rumors about the Western Route and said that western route of CPEC would be completed earlier than the eastern route.

He said work on various project under the CPEC was going with full speed and 22 projects would be completed during the current year while 18 projects would be completed next year.

He said around 70,000 Pakistanis had got employment in these projects.

The Chinese envoy said under the CPEC, the government had plan to complete a total of 200 projects till 2030 which would provide jobs to hundreds of thousands of people.

He expressed the hope that the next government in Pakistan would also continue the pace of progress on CPEC projects.

About Gwadar Port, he said, Gwadar International Airport would be completed in October this year. He said fisheries was an important sector of Gwadar and establishing a re-processing plant at the port Pakistan could further increase its exports.

He invited the overseas Pakistanis to come to their country and invest in Gwadar Port, adding that more than 30 Pakistanis companies had been registered at the Port.

He said the investors were being provided facilities of electricity, gas, water and wifai.

In energy projects under the CPEC, he said, $13 billion were being invested, adding that several energy projects had been completed which had overcome load-shedding problem in Pakistan to a great extent.

Under the CPEC, he said industrial parts would be established in Pakistan.

To a question, he said Pakistani were hard workers and capable people and if they could make an atomic bomb then stabilizing their economy was not a big task for them. He said in the 1970s decade Pakistan’s Gross Domestic Product (GDP) was equal to China, adding that today’s success story of China was a result of hard work and dedication of Chinese people.

He said that China desired improvement in Pak-India relations and both Pakistan and India could resolve their issues with peaceful dialogue.
Riaz Haq said…
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

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).
Riaz Haq said…
#Pakistan hits back at #US for what it says are attempts by the US to use the country’s impending economic crisis to drive a wedge between #Islamabad and #Beijing. #CPEC #China #IMF #economy

Pakistani officials have criticised what they say are attempts by the US to use the country’s impending economic crisis to drive a wedge between Islamabad and Beijing.

Officials in Islamabad have accused Washington of trying to strong-arm Pakistan into scaling back billions of dollars’ worth of Chinese investment in their country’s infrastructure as part of a potential bailout by the IMF.

One senior Pakistani government adviser told the Financial Times: “The US is trying to spoil China's biggest contribution to our future.”

Another added: “The Americans are trying very hard to put pressure on Pakistan because they have their own interests. But making it so hard for Pakistan to successfully negotiate a new program with the IMF makes no sense. Ultimately, Pakistan will search for other options if the road to the IMF is blocked.”

The Financial Times revealed this week that Pakistani officials had drawn up plans to ask the IMF for a $12bn bailout soon after Imran Khan comes to power as the country’s new prime minister. Pakistan is suffering an acute shortage of foreign reserves after years of high imports and low exports have taken their toll.

But even before Pakistan even makes a request, there are signs of resistance from the US, which is the IMF’s biggest shareholder.

Mike Pompeo, US secretary of state, on Monday warned the IMF not to grant a bailout to Pakistan that would compensate Chinese investors in Pakistani projects.

Mr Pompeo told CNBC: “We will be watching what the IMF does. There is no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself.”

His remarks were echoed in a blog post published by Mark Sobel, a former US representative to the IMF. Mr Sobel said: “The fund needs to have at its fingertips comprehensive data on all China-Pakistan Economic Corridor lending [a showpiece Chinese infrastructure programme] — its terms, maturities, and parties involved. Chinese lending should be on realistic terms and consistent with Pakistan’s sustainability.”

He added: “Otherwise, China should reschedule or write down its loans, sharply reducing the value of its claims.”

Beijing is planning to invest about $60bn in its southern neighbour as part of a wider plan by President Xi Jinping to establish a new silk road of global trading routes. It has so far refused to publish any details of the terms of those loans however.

While Islamabad says the project will revolutionise Pakistan’s infrastructure, there are signs it is creating short-term economic problems, with loan repayments further depleting its foreign currency reserves.

Belt and Road, or debt trap?
Earlier this month, the Wall Street Journal revealed Pakistan had fallen behind on some of its payments, including plans to build new power plants.

Beijing has not yet commented on the potential terms of an IMF bailout for Pakistan. Geng Shuang, a spokesman for the Chinese foreign ministry, said when asked about how the fund would deal with Pakistan: “I believe they will handle it appropriately.”

But any demands by the US for China to publish the terms of its CPEC loans, as well as to scale back its investments and even write some down, could set up a bruising clash between Beijing and Washington. China is the second-biggest shareholder in the IMF, but does not have a veto on its board-level decisions.

For now, China is continuing to keep Pakistan afloat with short-term lending. According to local reports, Beijing has agreed to lend Islamabad a further $2bn since last week’s election, adding to the $5bn Pakistan borrowed from Chinese commercial banks in the previous financial year.
Riaz Haq said…
Tillman highlights successes of BRI, CPEC projects
Henry Tillman, in a comprehensive presentation made on the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC) at the Ministry of Foreign Affairs on Friday, outlined the impressive successes and milestones achieved by CPEC.

Tillman, Chairman and Chief Executive Officer, Grisons Peak Investment Bank, UK, is an authority on BRI & CPEC and other Chinese economic initiatives the world over, said a press release issued here. The event which was hosted by Foreign Minister Abdullah Hussain Haroon, was attended inter alia by Minister for Finance, Dr Shamshad Akhtar; Minister for Law and Justice Syed Ali Zafar, Ambassador of People's Republic of China to Pakistan, HE Yao Jing, CEOs of Chinese Companies and senior government officials. A large number of members of Islamabad's think tank community and academia also participated

In his remarks at the occasion, Foreign Minister Abdullah Hussain Haroon said that Pakistan-China relations were a shining example of win-win cooperation. He commended President Xi Jinping's visionary Belt and Road Initiative and CPEC as the flagship project of BRI. He stressed that CPEC had added a practical dimension to the strategic partnership between the two countries. Through its energy and infrastructure projects, CPEC has already started yielding dividends for Pakistan.

Agreeing with the Foreign Minister, Tillman highlighted the successes of BRI and CPEC projects and their economic impact. He said that CPEC was benefiting Pakistan in practical terms especially in the energy and infrastructure sectors. Several power projects had been completed and a number of roads had been built. Many projects in energy and infrastructure were in completion phases. CPEC would generate 800,000 jobs.

Tillman also highlighted the expected positive spillover impact of BRI and CPEC on FDI from other countries, as well as development of Pakistan's construction, manufacturing, tourism and e-commerce sectors. He focused on the tremendous opportunities to be made available through the Special Economic Zones, which were already attracting international interest and could act as catalysts for accelerated economic and industrial growth.

Appreciating the success of CPEC, Tillman opined that in comparison to other BRI corridors Pakistan had done well in fast tracking CPEC, due to which negativity about Pakistan was dissipating, many major companies were coming to Pakistan, revenue was being generated and new opportunities for investment were opening up.

President Xi Jinping had shown his full confidence in Pakistan by committing to invest more than US $ 60 billion through CPEC. He stressed that Pakistan had the gift of being ahead of everyone else involved in BRI. The event is part of Ministry of Foreign Affairs' ongoing efforts to highlight the positive impact of CPEC on Pakistan's economy and its importance for regional connectivity.-PR
Riaz Haq said…
11 CPEC projects completed, 11 in progress

$18.9 billion investment made so far have created 75,000 jobs

According to the latest progress report on CPEC issued by the Chinese Embassy in Pakistan, 20 more projects were in pipeline under CPEC, which was the largest and most comprehensive project under the Belt and Road Initiative (BRI), besides being of great political, economic and social significance to China and Pakistan.

For implementation of CPEC, the two sides have set up a ministerial-level Joint Cooperation Committee on CPEC Long Term Planning (JCC) and seven joint working groups on planning, energy, transportation infrastructure, Gwadar Port, industrial cooperation, social economic development and international cooperation. They also decided to establish Joint Working Groups on social economic development and international cooperation.

Out of 15 energy projects planned as priority with a total generation capacity of 11,110MW, seven have been completed and in operation, while another six are under construction with a total capacity of 6,910 MW.

At present, Zonergy 300MW Solar Park, 50MW Dawood Wind Farm, Jhimpir UEP wind power project, Sachal 50MW Wind Farm, Sahiwal 2×660MW Coal-fired Power Plant, Port Qasim 2×660MW Coal-fired Power Plant and Three Gorges Second and Third Wind Power Projects have been completed. These projects have added 3240 MW to the Pakistani national grid, amounting to more than 11% of the total installed capacity of 29,000 MW in the country.

CPEC energy projects are providing affordable energy to Pakistani consumers in a diversified way. The tariff of power plants has been sharply decreased from Rs 16-18 to around Rs 8 per unit. With the introduction of CPEC energy projects, Pakistan also reduced its heavy dependence on gas and LNG power plants, which account for 50% of total installed capacity. The CPEC energy projects are foreign direct investment and are executed in accordance with BO(O)T mode. Any debt arising from the CPEC energy projects would be borne by the Chinese investors instead of the Pakistani government.

Regarding infrastructure projects, the report said currently, three projects including KKH Phase-II (Havelian-Thakot section), Karachi-Lahore Motorway (Sukkur-Multan section) and Lahore Orange Line are under construction. The information highway for laying of an optical fiber cable (OFC) from Rawapindi to Khunjrab is in operation. These ongoing projects are funded by preferential loans from the Chinese government at around 2% interest rate with a total amount of 5.874 billion USD. The up-gradation of ML1 railway and the KCR are under discussion.

About Gwadar Port, it said up to now China Overseas Ports Holding Company (COPHC) has invested $ 250 million in the port renovation. Five new quay cranes, a 100,000 M2 storage yard, a seawater desalination plant with capacity of 220,000-gallon pure water/day, two sets of sewage disposal systems and cargo handling equipment have been installed and 80,000 M2 green space has been added to the port area. 400,000 tons of cargoes have been handled by Gwadar Port in 2017.

The Gwadar Free Zone is located in the northern part of Gwadar. The planned development period is from 2015 to 2030, and is divided into four phases. The 923-hectare Free Zone includes an initial area (25 hectares) and the northern area (898 hectares).

Around 30 companies have invested in the Free Zone, with direct investment of about $474 million. With the construction of the free zone, the city of Gwadar will become a commercial hub of the region in the near future. The construction of Gwadar East Bay Expressway project was started in November 2017 and would be completed in 36 months with the designed speed of 100 kilometers per hour

Financing Run Down of 22 CPEC Projects
Riaz Haq said…
“392-Km $2.89 billion M5 #motorway completion is a milestone for #CPEC, the $62 billion flagship of China's Belt and Road Initiative (#BRI) that includes roads, railways, power plants, ports seeking to link #China with #Pakistan” via @Stratfor Worldview

What Happened: The China-Pakistan Economic Corridor's (CPEC) M5 motorway connecting Sukkur with Multan has been completed two weeks ahead of schedule, according to a July 24 Xinhua report.

Why It Matters: The motorway's completion is marking a milestone for CPEC, the $62 billion flagship initiative of China's Belt and Road Initiative that includes roads, railways, power plants and ports seeking to link western China's Xinjiang province with Pakistan.

Background: The 392-kilometer project is part of the Peshawar-Karachi Motorway, was completed within three years at the cost of $2.89 billion and is set to open for traffic in August.
Riaz Haq said…
#IMF Official: #CPEC #energy #infrastructure projects have helped #Pakistan deal with acute shortages of power. She said the #debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable.

The International Monetary Fund (IMF) said on Monday that it had full access to borrowing and maturity terms of the China-Pakistan Economic Corridor (CPEC) projects and its loans were manageable.

Addressing Senior Journalists’ Forum at the National Press Club, IMF resident representative in Islamabad Teresa Daban Sanchez counted issues relating to the Financial Action Task Force (FATF), provincial spending behaviours and insufficient parliamentary strength of the government as key risks to its $6 billion 39-month bailout programme.

She said Pakistan had shared full details of CPEC loans with the IMF, adding that CPEC was mostly private sector investment in energy and infrastructure. In reply to a question, the IMF official said energy projects had no doubt helped the country deal with acute shortages of power and this was a very positive aspect. She said the debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable.

Responding to a question, Ms Sanchez said fiscal consolidation and revenue mobilisation, market-based exchange rate and social sector protection were three basic pillars of the new IMF programme, adding that fiscal consolidation should be revenue-oriented to deal with the problems of fiscal deficit because the country had a very low tax-to-GDP ratio and needed to increase revenue which was being done through removing tax exemptions and privileges.

The IMF official said there was a strong need for greater coordination with the provinces to ensure that they spent less and provided budget surplus to the federal government. She said the IMF did not place any condition to bring changes in the National Finance Commission’s resource distribution formula, but it did get a commitment of fiscal federalism under a memorandum of understanding signed by the federal and provincial governments on revenue surplus and harmonisation of taxes for improved revenue collection.

Ms Sanchez said one of the most important pillars of the IMF programme was the market-based exchange rate, with the central bank in the background, to achieve price stability through forward looking actions to deal with inflation.

Speaking about key reforms in the programme, she enumerated implementation of financial management to instill fiscal discipline in the public sector, autonomy to the central bank, energy sector improvement, strengthening of anti-corruption agencies and compliance with the FATF.
Riaz Haq said…
“Doubt is Our Product”: It’s vital that scientists engage with the public and the media to ensure that their research is accurately represented

Recent research by Marcus Munafò and colleagues suggested that standardised cigarette packs increase the prominence of health warnings in non-smokers and light smokers. Interestingly, they didn’t see this in regular smokers. However, the research was misrepresented by British American Tobacco, who used it to argue that “plain packaging may actually reduce smokers’ attention to warnings”. He argues that scientists have the responsibility to make sure that their research is accurately represented, and that attempts to misrepresent their research are challenged.

Cigarette smoking is addictive. Cigarette smoking causes lung cancer. Today these statements are uncontroversial, but it’s easy to forget that this was not the case until relatively recently. The first studies reporting a link between smoking and lung cancer appeared in the 1950’s (although scientists in Germany had reported a link earlier), while the addictiveness of tobacco, and the isolation of nicotine as the principal addictive constituent, was not established until some time later. Part of the reason for this is simply that scientific progress is generally slow, and scientists themselves are typically not the kind of people to get ahead of themselves.

However, another factor is that at every stage the tobacco industry has resisted scientific evidence which indicates harms associated with the use of its products. One way in which it has done this is by suggesting that there is uncertainty around the core evidence base used to support tobacco control policies. A 1969 document from the Brown and Williamson tobacco company (a subsidiary of British American Tobacco) outlines this strategy: “Doubt is our product, since it is the best means of competing with the ‘body of fact’ [linking smoking with disease] that exists in the mind of the general public”.

This approach seeks to “neutralize the influence of academic scientists”, and has since been adopted more widely by other lobby groups. The energy industry has used a similar approach in response to consensus among climate scientists on the role of human activity in climate change. But what’s the problem? There are always a number of ways to interpret data, scientists will hold different theoretical positions despite being in possession of the same basic facts, people are entitled to their opinion. That’s fine, but the tobacco industry goes beyond this and actively misrepresents the facts. Why do I care? Because recently our research was misrepresented in this way.

There is ongoing debate around whether to introduce standardised packaging for tobacco products. This is a prominent policy issue in the UK and elsewhere at the moment, particularly following recent claims that David Cameron’s electoral strategist, Lynton Crosby, may have influenced the decision to drop the introduction of standardised packaging from the coalition government’s planned legislation. The tobacco company Philip Morris International has a contract with Lynton Crosby’s firm, Crosby Textor Fullbrook, for lobbying work in the UK, including on standardised packaging of tobacco.

Public health campaigners mostly favour standardised packaging, while the tobacco industry is opposed to it. No particular surprises there, but given that only Australia has so far introduced standardised packaging there’s a need for more research to inform the debate.

Riaz Haq said…
Phase-II of CPEC, flagship BRI project, much broader in scope: Pakistan Ambassador to China
Phase-II much broader in scope: Ambassador

GT: The first brick of the CPEC was laid in 2013, it has been nine years, can you comment on the current status of CPEC construction efforts? Tackling the energy shortage was frequently mentioned in the earlier years of the CPEC, how is the situation now?

Haque: The CPEC marks a new phase in Pakistan-China relations by placing economic cooperation and connectivity at the center of bilateral agenda. Being the flagship project of the Belt and Road Initiative (BRI), it aims to enhance connectivity and trade linkages between Pakistan, China and the region through a network of roads, rail, fiber optic, energy pipelines, industrial clusters and Special Economic Zones.

In its first phase, the CPEC has helped us develop major infrastructure and address our essential energy needs. The energy projects which have already been completed include 1,320 megaWatt (MW) capacity coal-fired power plants in Sahiwal (Punjab), Port Qasim (Karachi) and Hub (Balochistan); 660MW Engro Thar coal power project; 1,000MW Quaid-e-Azam Solar Park in Bahawalpur (400MW project is complete while 600MW is under-implementation), and some smaller wind & solar energy projects. A mega, 878-kilometer long, Matiari to Lahore ±660 KV HVDC Transmission Line project has also been completed with the capacity to evacuate 4,000 MW electricity.

It has also upgraded Pakistan's national and international highway network to provide more reliable Pakistan-China connectivity across the Karakoram Mountains and smoother inland communications. The CPEC investment and its spin-off effects have also generated thousands of jobs.

GT: How do you see the current challenges and opportunities facing the CPEC in 2022? What's there to be built in the second phase?

Haque: It is a matter of great satisfaction that despite the challenges posed by COVID-19 pandemic in the last two years, the CPEC cooperation and work on all projects continued unhindered. The recently held 10th meeting of the Joint Cooperation Committee reviewed wide-ranging cooperation under the CPEC framework and identified more areas of cooperation including establishment of a Joint Working Group on Information Technology and Industry, which is expected to support high-quality development of the CPEC as envisioned by the leadership of the two countries.

While the first phase of CPEC was mainly focused on infrastructure and energy projects to cater to the immediate needs, the high-quality CPEC phase-II is much broader in scope and focuses on industrial relocation, agricultural modernization, science and technology cooperation, job creation and our people's socio-economic well-being. We are also making rapid progress on the development of the Gwadar Port and Free Trade Zone, which would promote regional connectivity and economic integration.

GT: What is the current level of third-party participation in the construction of the CPEC?

Haque: As the CPEC aims to promote regional integration and win-win cooperation, Pakistan and China have agreed to welcome and encourage high-quality investments and introduction of advanced technologies and expertise in the CPEC from third-party partners who are ready to work with us for common development.

The two countries are jointly working to finalize a mechanism for third-party cooperation under the CPEC framework before formally processing such requests.

GT: Regional cooperation is a key word for 2022 and BRI construction is also progressing rapidly. How do you see Pakistan's and CPEC's role in this direction?

Haque: Pakistan is one of the earliest supporters and participants of the BRI. We emphatically endorse the spirit and philosophy of the BRI, which seeks to transcend national boundaries and lay bridges for a win-win cooperation and closer economic integration for a shared future.
Riaz Haq said…
#China Agrees to rollover a whopping $4.2 billion in #Pakistan #debt. The request for rollover was reportedly made by Prime Minister #ImranKhanPTI during his meeting with #Chinese President #XiJinping last month at #WinterOlympics. #CPEC #economy #PTI

China on Wednesday acceded to Pakistan's request to rollover a whopping $4.2 billion debt repayment to provide a major relief for its all-weather ally, which is reeling under major economic crisis.

Chinese Foreign Minister Wang Yi in his meeting with Pakistan counterpart Shah Mehmood Qureshi on the sidelines of the 3rd meeting of the 'Foreign Ministers of Neighbouring Countries of Afghanistan' in China's eastern Anhui province has conveyed Beijing's decision to rollover the debt.

In a video message, Qureshi said Wang has conveyed China's decision to rollover Pakistan $4.2 billion to enable Islamabad to tide over the current economic crisis.
"I am immensely happy to share that the Chinese FM has given a nod of approval on the rollover of commercial loan as well," Qureshi was quoted as saying by Pakistan daily Dawn.

The USD 4.2 billion debt, which was maturing this week, has been rolled over providing major financial relief to Pakistan, the daily reported.

"The procedural formalities are being completed by relevant authorities. An announcement will be made as soon as they're sorted," Qureshi said.
The request for rollover was reportedly made by Pakistan Prime Minister Imran Khan during his meeting with Chinese President Xi Jinping here last month to attend the opening ceremony of the Beijing Winter Olympics.

Pakistan continues to undergo a huge economic crisis despite heavy investment by China in the $60 billion China Pakistan Economic Corridor (CPEC). In addition to Pakistan, Sri Lanka, a major recipient of Chinese loans and investments, too has asked China to reschedule its debt as it is going into a crippling financial crisis.

China is considering a fresh request from Sri Lanka for a loan of USD one billion and a credit line of USD 1.5 billion, Chinese Ambassador to Sri Lanka Qi Zhenhong told the media in Colombo last week. He, however, was silent about Sri Lankan President Gotabaya Rajapaksa's request for rescheduling of debt repayments.

Riaz Haq said…
S.L. Kanthan
In the last six years, China has lent $185 billion in emergency loans to developing nations. That’s more than the IMF.

Multipolar world where poor countries are not the mercy of one system. 👋🏻👇🏽

Also an important fact is that the majority of the loans are happening in Yuan

“Lender of last resort” — Bloomberg


Is China finally living up to its responsibility as the world’s second-largest economy? Or is it setting up a rival system of global governance as the relationship between Beijing and Washington gets sourer by the day?

Those are the questions raised – once again, the cognoscenti might say – by a new paper that lays out the growing role of China as a lender of last resort to countries in economic peril, of which there is now a growing list.

Among the findings of a new paper that my colleague Tom Hancock and I report on here:

From 2000-21, the People’s Bank of China and state-owned banks sent $240 billion to governments in the developing world in what amounted to emergency loans.
The bulk of that came in 2016-21, when 22 countries got some $185 billion, according to what the researchers were able to document.
That total surpassed the $144 billion that IMF data shows its members having drawn from the Washington-based lender during that time.
The research — by Sebastian Horn of the World Bank, Brad Parks of the William & Mary AidData project, former World Bank chief economist Carmen Reinhart and Christoph Trebesch of Germany’s Kiel Institute for the World Economy — is part of a growing body of work looking at Chinese lending.
Riaz Haq said…
CPEC Results According to Wang Wenbin of China

Bilal I Gilani
CPEC projects are creating 192,000 jobs, generating 6,000MW of power, building 510 km (316 miles) of highways, and expanding the national transmission network by 886 km (550 miles),” Foreign Ministry spokesman Wang Wenbin told reporters in Beijing."

Associated Press of Pakistan: On July 5, Prime Minister Shahbaz Sharif while addressing a ceremony to mark a decade of signing of the China-Pakistan Economic Corridor (CPEC), said that CPEC has been playing a key role in transforming Pakistan’s economic landscape. He also said that the mega project helped Pakistan progress in the region and beyond. What is your response?

Wang Wenbin: The China-Pakistan Economic Corridor (CPEC) is a signature project of China-Pakistan cooperation in the new era, and an important project under the Belt and Road Initiative. This year marks the 10th anniversary of the launch of CPEC. After ten years of development, a “1+4” cooperation layout has been formed, with the CPEC at the center and Gwadar Port, transport infrastructure, energy and industrial cooperation being the four key areas. Projects under CPEC are flourishing all across Pakistan, attracting USD 25.4 billion of direct investment, creating 192,000 jobs, producing 6,000 megawatts of electric power, building 510 kilometers of highways and adding 886 kilometers to the core national transmission network. CPEC has made tangible contribution to the national development of Pakistan and connectivity in the region. China and Pakistan have also explored new areas for cooperation under the framework of CPEC, creating new highlights in cooperation on agriculture, science and technology, telecommunication and people’s wellbeing.

China stands ready to work with Pakistan to build on the past achievements and follow the guidance of the important common understandings between the leaders of the two countries on promoting high-quality development of CPEC to boost the development of China and Pakistan and the region and bring more benefits to the people of all countries.
Riaz Haq said…
The mega undertaking (China-Pakistan Economic Corridor or CPEC) has created nearly 200,000 direct local jobs, built more than 1,400 kilometers (870 miles) of highways and roads, and added 8,000 megawatts of electricity to the national grid, ending years of blackouts caused by power outages in the country of 230 million people.

Chinese Foreign Ministry spokesman Wang Wenbin told reporters in Beijing earlier this month that CPEC projects "are flourishing all across Pakistan," making a "tangible contribution" to the national development of the country and to regional connectivity.

But critics say many projects have suffered delays, including several much-touted industrial zones that were supposed to help Pakistan enhance its exports to earn much-needed foreign exchange.

The country's declining dollar reserves have prevented Islamabad from paying Chinese power producers, leading to strains in many ties.

Pakistan owes more than $1.26 billion (350 billion rupees) to Chinese power plants. The amount keeps growing, and China has been reluctant to defer or restructure the payment and CPEC debts. All the Chinese loans – both government and commercial banks – makeup nearly 30% of Islamabad's external debt.

Some critics blame CPEC investments for contributing to Pakistan's economic troubles. The government fended off the risk of an imminent default by securing a short-term $3 billion International Monetary Fund bailout agreement this month.

Security threats to its citizens and interests in Pakistan have also been a cause of concern for China. Militant attacks have killed several Chinese nationals in recent years, prompting Beijing to press Islamabad to ensure security measures for CPEC projects.

Diplomatic sources told VOA that China has lately directed its diplomats and citizens working on CPEC programs to strictly limit their movements and avoid visiting certain Pakistani cities for security reasons.

"They [Chinese] believe this security issue is becoming an impediment in taking CPEC forward," Senator Mushahid Hussain, the chairman of the defense committee of the upper house of the Pakistani parliament, told VOA in an interview earlier this month.

"Recurring expressions of concern about the safety and security of Chinese citizens and investors in Pakistan by top Chinese leaders indicate that Pakistan's promises of 'foolproof security' for Chinese working in Pakistan have yet to be fulfilled," said Hussain, who represents Prime Minister Shehbaz Sharif's ruling party in the Senate.

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