POTENTIAL PITFALLS OF CPEC

The dust on recently organised Belt Road Initiative Forum in China is yet to settle. Chinese and Pakistani media is gaga over the benefits from one component of BRI ie China Pakistan Economic Corridor (CPEC). India and Bhutan were unrepresented at this forum and for good reasons. India could not have participated due to objection against corridor passing through Indian territory of Gilgit-Baltistan, which is under illegal occupation of Pakistan. This is in violation to the Indian Constitution. With the passage of Independence of India Act in the British Parliament in 1946, which resulted in division of India and creation of Pakistan, the princely states (over 560 of them) had a choice of joining one of the two states. Jammu and Kashmir joined the Indian State and therefore any redrawing of political maps will be unconstitutional. POJ&K is under unconstitutional Pakistani occupation and China is using this territory for CPEC, giving credence to illegal occupation by Pakistan.

While the benefits of CPEC has been repeatedly highlighted by Beijing and Islamabad (read Rawalpindi), let us glean at some of the pitfalls. The now infamous Dawn newspaper leaks of CPEC paper 1 & II in Pakistan has exposed the Chinese intentions and near nil mention of benefits to Pakistan. This is a document jointly prepared by China Development Bank and National Development Reform Commission (NDRC). If credence is given to this report, which has become a matter of serious debate in Pakistan, following emerge:-

CPEC intends to fund 17 projects which are of benefit to China. Most important is Gwadar, being at superior geographical location will result in cheap shipping costs of import of crude oil from the Middle East as also coking coal from South Africa and New Zealand.

The second important project talks about China having limited submarine landing stations for its fibre optic network at present leads to congestion of internet traffic. Pakistan has total of four submarine cables but only one landing station which is a potential security risk. Therefore, China acquiring an opening on the Makran coast would address these limitations. This has driven China to complete the fibre optics cable from Beijing to Rawalpindi (and not Islamabad) first. The main reason for the cable to be passing through Rawalpindi is because the traffic on this network would be jointly monitored by two militaries and also used for cooperation in military operations in future. This aspect is important, given the growing China-Pakistan nexus in the changing dynamics of geopolitics in the region.

The third important issue which has been identified in this leaked paper is the Chinese apprehension of inherent risks in the project. These risks are:-

• Competition amongst political parties in Pakistan for power grabbing.

• Religious rivalries amongst Shias and Sunnis and resultant turbulence.

• Tribal affiliations in the CPEC adjoining areas

• Terrorist activities in Balochistan.

• Interference by Western countries meaning primarily the US

As a result of these limitations, the report recommends that Chinese bank should not invest more than USD 1 billion in a financial year. The balance expenditure should be met by Pakistan by taking loan from China and the limit of which should be USD 1 billion per year. Pakistan government must do this financing by issuing sovereign bonds in each year’s budget in order to ensure interest payment. The report clearly mentions that Pakistan does not have the ability to absorb more than USD 2 billion investment a year. It also talks about Gwadar port being useful for China to the extent that it opens a door but what comes through this door will largely depend upon how those five issues shape up in future.

There is enough indication that India- Pakistan-China tensions will rise because of CPEC passing through Pak occupied Gilgit Baltistan area and will continue to be a hurdle in the overall progress of project.

The Chinese apprehensions on terrorism have only firmed up by the recent abduction of Chinese nationals in Balochistan, probably by Taliban which could have had some support of Baloch liberation fighters. The number of pitfalls in the CPEC project is a matter of great concern to the Chinese and this is one of the reasons why they are keen on India joining hands in Belt Road Initiative of which CPEC is an offshoot. Government of India’s rebuttal is indicative of very clear understanding of the entire issue in the South Block.

—Vice Admiral Shekhar Sinha, PVSM, AVSM, NM and Bar is the former Commander in Chief Western Naval Command & former Chief of Integrated Defence Staff.

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