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Analyzing CPEC

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Peregrine
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Analyzing CPEC

Postby Peregrine » 03 Jan 2017 01:24

Pakistan’s to-be thriving port suffering from crippling water scarcity

ISLAMABAD: Imagine a deep-sea port where, while so-called development experts enjoy a breath-taking view from their regal five star hotel rooms located on the grand Koh-e-Batil hill, indigenous fishermen are left with little choice except migrating permanently to far-flung harbours.

Imagine a place where one of the most expensive commodities is a bottle of fresh water and though every now and then one finds a convoy of trucks escorted by military vehicles, fresh water tankers are scarce and expensive. Yes, this is the new boomtown – Gwadar smart port city – a project that is expected to open new vistas of bilateral cooperation between Pakistan and China.

Water crisis

Through sheer courage, native people of Gwadar have shown resilience as never exhibited before. However unless the water problem is tackled with a head-on approach, Gwadar might end-up becoming a ghost town. The Ankara Kaur dam has dried up and the desalination plant has failed to work.

The Mirani dam built over river Dasht can help de-escalate the situation but it was never planned to meet the future water demands of this port city. Today Gwadar has a population of 0.12 million compared to a mere 5,000 back in year 2000 and if the population of Gwadar surpasses the 2 million mark in the next five years, average water requirements would be around 200 million gallons per day. Mirani dam, however, was intended to manage a demand of less than 10 million gallons per day.

Gwadar Development Authority (GDA) has already commissioned a study to plan expropriation and resettlement of old Gwadar population. At present, there is no strategic plan to improve socio-economic conditions of local population nor are any blue prints of a larger capacity –building programme to train them for future expected jobs.

Previously in the construction of coastal highway link from Karachi to Gwadar, hardly any local population was hired. The same episode might be repeated in future if appropriate steps are not taken to enhance the skill set of the local labour force.

The first phase in the development of Gwadar involves completion of an international airport and other port facilities by the year 2017. However, Gwadar smart port city master plan has not yet been finalised and recently GDA has stopped issuing any more NOCs to housing authorities last month after newspapers were flooded with residential schemes.

As tap water is accessible to only 5% of the population, urban planning in general and water planning in particular is extremely important to mitigate risks rising from a plethora of such housing projects.

The Gwadar master plan 2005 assumed an over simplistic view of these resource management problems – using a classic reductionist approach instead of a more inclusive and systems perspective.

Human trafficking woes

For hundreds of years, Gwadar has been a hub of smuggling and human trafficking but now Gwadar’s most trafficked areas are being dominated by new ‘development’ actors who tell a totally different story.

Thanks to the China-Pakistan Economic Corridor, Gwadar port development project will benefit not only local people but masses at large living in China, Pakistan, Iran and Afghanistan. The venture might be the biggest one in its 3,000 year history but only a holistic approach to port planning will ensure that the tale of Gwadar will have a happy ending – helping locals transform their lives and those of other ordinary people living in Central and South Asian region.

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Re: Analyzing CPEC

Postby SSridhar » 05 Jan 2017 19:51

Birth of another dependency - Khurram Hussain, DAWN
The latest SBP report, although optimistic in its overall tone, points towards some changes in the first quarter of the current fiscal year that could lend lasting credence to the voice of the skeptics.

Even though the SBP has taken pains to avoid letting its assessment become fodder for the skeptics to beat the government with, the underlying facts are too stark to now paper over.

We seem to be substituting CSF (Coalition Support Fund) inflows with commercial borrowings from China as a stopgap measure to plug our current account deficit.

Here are some noteworthy developments the report brings up on the external sector.

Pakistan saw net inflow of $1.1 billion in “net loan and FDI inflows from China in Q1-FY17” says the report.

Out of this, $700 million (the lion’s share of the total) was a commercial loan from the China Development Bank whose only purpose, apparently, was to help pay for the nearly $2bn of machinery that Pakistan imported from China in the same quarter.

In case you missed it, let me put it in plain English here: we’re borrowing money on commercial terms from a Chinese bank to pay for machinery imported from China under CPEC-related projects.

Elaborating on this, the report says “[w]hereas Q1-FY16 had seen a dramatic pick-up in net FDI from China, it was long-term loan disbursements that dominated in Q1-FY17.”

So last year in the same quarter, Pakistan saw net FDI inflow from China of $192m, but this year that figure dropped to $91m.

And loans from China in the first quarter last year were $138m, and this year they jumped to $979m, of which $700m was the commercial loan mentioned above.

These inflows helped cover up a hole that opened up in the country’s external account due to the drying up of Coalition Support Funds (CSF).

In the same quarter last year, Pakistan ran a current account deficit that was less than half of what it ran this year. Last year the CSF inflows played a big role in helping cover the gap.

This year the report says the commercial borrowing from China “helped to cover the increase in current account gap and lower foreign investment in the quarter”.

This is important for a couple of reasons.

First, we seem to be substituting CSF inflows with commercial borrowings from China as a stopgap measure to plug a running deficit in our current account.

CSF was always billed as a “reimbursement”, and booked in our accounts as an export of a service (an awkward classification for what it implies).

But the Chinese loans are on commercial terms and, unlike CSF, have to be repaid with interest.

So our current account is weakening almost irreversibly while imports from China are skyrocketing, and the gap is being plugged by commercial borrowing from Chinese banks.

How sustainable is this?

What are the terms on these loans, and what sort of outflows will be created when repayment begins?

Nobody knows, not even the State Bank it seems.

But noting the shifting gears in the economy, the report does point out that “in the short run, it is imperative that CPEC projects (both power and infrastructure-related) continue at their projected pace, mainly to ensure steady arrival of associated FX inflows from China.”

And then goes on to add that “[t]his financing will also be crucial to offset the rise in the import bill stemming from higher CPEC-related machinery imports.”

Is this a new relationship of dependency being built here?

Are we now getting locked into a cycle of borrowing and imports under the garb of CPEC even as the more important pillars of the external sector — exports, remittances and FDI — shrivel up?

If so, the first quarter of fiscal year 2017 will be the moment when the gears shifted.

Where these trends take us is difficult to foresee, but increasingly the government’s narrative of economic improvement is beginning to sound like a high-stakes bet instead of sound policy.

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Analyzing CPEC

Postby Peregrine » 07 Jan 2017 03:05

X Posted on the China Watch Thread

China wants India in one-belt-one-road meet, India remains wary

NEW DELHI: China is keen on a high-level Indian participation in an international conclave that it plans to host this May to garner support for its mega One-Belt-One-Road (OBOR) connectivity initiative spanning across Europe, Asia and Africa. India, however, remains wary of the ambitious project, especially because it includes China-Pakistan-Economic-Corridor (CPEC) running through PoK.

Delhi has not endorsed OBOR not only because it perceives the move as Beijing’s attempt to expand its influence in the region but also because it includes CPEC. India has lodged regular protests against creating CPEC that challenges sovereignty issue.

Beijing has recently indicated to Delhi that it will host a conference on the OBOR in China and urged a "high-level representative” from India. Delhi, however, remained non-committal, persons familiar with the matter indicated.

Delhi, according to the sources, is still reluctant to endorse OBOR, particularly because Delhi, according to the sources, is still reluctant to endorse OBOR, particularly because the initiative includes the CPEC, which will link Kashgar in Xinjiang region and Gwadar port in Balochistan.

A senior official of Pakistan army recently said India should drop its opposition to CPEC and rather join the initiative. This prompted China to underline that it had an "open attitude” to India joining the CPEC.

Chinese President Xi Jinping has since 2013 been articulating the idea of a ‘21st century Maritime Silk Road’ to revive economic connectivity between Pacific and Indian Oceans and to link China’s coastline with Southeast Asia, the Gulf and the eastern coast of Africa. He has also been proposing a 'Silk Road Economic Belt’, reviving the ancient link between China and the Mediterranean through Central Asia.

The two projects are now together called OBOR or Belt-Road-Initiative (BRI) and the Chinese government has been pulling out all the stops over the past few years to elicit support from other countries and make it a success. It is billed as Xi’s dream project.

China’s plan to expand its presence further in the Indian Ocean region and the Central Asia, however, has caused discomfort in Delhi, which has already been wary of China’s "string of pearls” assets encircling India, according to experts on the subject.

Delhi views the OBOR initiative or BRI as the one designed by Beijing in pursuit of its own strategic objectives, but not as an inclusive one because the opinions of other "interested or affected” countries had not been taken into account.

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Re: Analyzing CPEC

Postby panduranghari » 07 Jan 2017 16:27

It looks like the Chinese are trying to secure reassurances that we wont retake GB in the immediate future.

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Analyzing CPEC

Postby Peregrine » 07 Jan 2017 18:44

panduranghari wrote:It looks like the Chinese are trying to secure reassurances that we wont retake GB in the immediate future.

panduranghari Ji :

I would differ.

I strongly feel that China wants to include India in CPEC so that India will be Under the Heel of China by having the Cwapistani Terrorists to keep disrupting the Indian Exports as well as Imports from & to Afghanistan and the CARs.

The Trade with the CARs - except Kazakhstan and Turkmenistan - is miniscule :

EXPORTS : US$ 362.45, IMPORTS : US$ 456.93 - TOTAL TRADE : US$ 819.38 MILLIONS

FYI : Indian Exports to Cwapistan are US$ 2,171.14 and Imports are US$ 441.03

Why does India need to Trade with the CARs?

Meanwhile China is pushing up Manufacturing in Xinjiang and will flood Cwapistan and india with Cheap Textiles etc. possibly for India disguised as Cwapistani Exports.

India should NEVER but NEVER JOIN CPEC

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Re: Analyzing CPEC

Postby chanakyaa » 07 Jan 2017 21:44

I've a problem with words "joining CeePek", because it is misleading.

For example,
1. If raw material moves from Africa thru Gwadar thru PoK, to China which then turns in to finished product which is then consumed in India, does this mean we joined CPEC?
2. If raw material moves from Africa thru Gwadar to a factory in Cwapistan which then turns in to finished product which is then consumed in India, does this mean we joined CPEC?
3. If Chinese subcontract a manufacturing facility to Cwapistan, whose finished product ends up in Indian market, does this mean we've joined CeePek?
3. If we do not invade PoK and bomb rail/road illegally built by Chinese in PoK, does this mean we've joined CeePek?
4. If raw material from Arg makes its way by road to India thru Cwapistan, does this mean we've joined CeePek?
5. If Chinese strike a deal with Cwapistan, that natgas/oil/LPG from Iran will make its way to India, SAFELY, does this mean we've joined CeePek?

The answer to the above questions (to pick a few) is, unfortunately, "yes", even if we don't sign any agreement to join "CeePek", even if such agreement even existed.

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Re: Analyzing CPEC

Postby Bhurishravas » 08 Jan 2017 17:20

^^ +1
How does one join CPEC?!
By becoming a beggar like Pakistan !!?
India can support or have participation in economic projects after feasibility studies. But `joining CPEC` is a ganwaar statement given by a jaahil Paki army afsar that does not mean anything.

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Re: Analyzing CPEC

Postby anupmisra » 08 Jan 2017 20:53

Bhurishravas wrote:How does one join CPEC?


By inviting them, china would want its trading partners to use gwadar port and the highway leading to xinjiang to supply and take delivery of raw materials and finished products. It is a shorter, cheaper route to western china. In return, china gets access to the warm waters of the arabian sea, a dream that the soviets had in the '70s.

In china's view India is crucial for SeePack to succeed. Bakistan is just a useful tool (transit land and source for comfort services by its momeens and motor-mamas). A part of the new proposed highway system passes close to LaWhore which will allow chinese exports of low end, cheap chini products to India through Indian punjab. Strategically, it will tie the two punjabs together as co-dependents.

In another way to look at it, by agreeing to "join" SeePack, India would legitimizes PoK, occupied GB and the part of cashmere given to the chinese by the pakis.

For India, gwadar serves no strategic or tactical purpose to trade with the rest of the world. Kandla is a bigger and better port. Besides, the entire western coast of India is up for development as trading nodes.

For the pakis, development of gwadar will kill the k'rachi and bin qasim ports. But pakis have never been strategic in their thinking. Always tactically oriented.

Just my opinion.

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Re: Analyzing CPEC

Postby nandakumar » 08 Jan 2017 21:13

No logistics manager of a manufacturing unit in the Western part of India would want a raw material or component to be unloaded into Gwadar port and transported by road through Pakistan and diverted into India at Punjab or horror of horrors, via Jammu/Kashmir when he can unload the cargo into Mundra, Mumbai, Nava Sheva (JNPT), Marmagoa and so on or any of the major/minor ports all along the West coast. As for units located on the East coast, forget about it. It doesnt even make sense. So when people talk of investing in CPEC the Chinese are asking for Indian Govt money with no expectations of a return.

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Re: Analyzing CPEC

Postby chetak » 08 Jan 2017 22:50

anupmisra wrote:
Bhurishravas wrote:How does one join CPEC?


By inviting them, china would want its trading partners to use gwadar port and the highway leading to xinjiang to supply and take delivery of raw materials and finished products. It is a shorter, cheaper route to western china. In return, china gets access to the warm waters of the arabian sea, a dream that the soviets had in the '70s.

In china's view India is crucial for SeePack to succeed. Bakistan is just a useful tool (transit land and source for comfort services by its momeens and motor-mamas). A part of the new proposed highway system passes close to LaWhore which will allow chinese exports of low end, cheap chini products to India through Indian punjab. Strategically, it will tie the two punjabs together as co-dependents.

In another way to look at it, by agreeing to "join" SeePack, India would legitimizes PoK, occupied GB and the part of cashmere given to the chinese by the pakis.

For India, gwadar serves no strategic or tactical purpose to trade with the rest of the world. Kandla is a bigger and better port. Besides, the entire western coast of India is up for development as trading nodes.

For the pakis, development of gwadar will kill the k'rachi and bin qasim ports. But pakis have never been strategic in their thinking. Always tactically oriented.

Just my opinion.


if we accept their "invitation" ....... and join the CPEC it will mean...

the hans will swallow gwadar port completely, kick the pakis out of the area and also restrict/reserve gwadar port solely for their military use "to fight piracy" in the gelf, thus ensuring their permanent and enduring presence in the Indian ocean.

apart from gwadar, the hans will now want the GoI to create additional linkages to Indian ports by insisting that it would be good for India to link to the Karakoram Highway/pipeline leading back to china. and also build rail linkages to massive inland container terminals near the Karakoram Highway

cheap han and paki goods + paki terrorists will flow in through these India created and funded linkages, involving pipelines, rail and road connections, allowing the hans a clear and peaceful access to Indian markets as well as to the gulf through much safer Indian ports and also the much more safer Indian pipeline/road/rail linkages to de risk their paki dependent transport resources via the paki part of the Karakoram Highway.

It also requires that yechury becomes the PM and d raja becomes the president cum CJI, with susukumar as the vice president, brinda as the LS speaker and and karat as the ambassador plenipotentiary.

Sovereign guarantees will of course be provided (without asking) by the grateful Indian state.

the hans can dream, can't they?? :lol:

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Re: Analyzing CPEC

Postby Karthik S » 08 Jan 2017 23:02

If that day comes when we try to retake entire PoK, how will chinese react with regards to CPEC? Apparently all our top politicians have kept silent on the fact that it passes through our territory occupied by the pakis.

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Re: Analyzing CPEC

Postby Prem » 09 Jan 2017 10:54

http://www.forbes.com/sites/panosmourdo ... b79d21240f

China Wants Russia To Calm India And Save CPEC

hina is eager to see Russia join The China-Pakistan Economic Corridor (CPEC) project, according to a recently published article in Globaltimes, though the Russian embassy in Islamabad denied the reports.“Russia’s participation in the CPEC, including the use of the Gwadar Port, could give a boost to Sino-Russian cooperation and be a demonstration project of One Belt and One Road (OBOR) that will enhance future multinational cooperation,” writes Li Xing.That’s certainly true. A sound infrastructure is a pre-condition for the economic integration of neighboring countries. But the real reason behind China’s eagerness to bring China to CPEC project is elsewhere in my opinion: use Russia to appease India, which claims control of a crucial part of CPEC.CPEC is part of China’s vision to write the rules of the next era of globalization and help its export and investment engines run for years to come.Specifically, CPEC is the express link between Western China, the Middle East, and Africa -- China's second continent. Ideologically that is, which can explain why Beijing has committed $46 billion to the project.The trouble is that CPEC passes through Pakistani regions claimed by India. That makes it a bumpy road, to say the least -- Pakistan and India continue to fight for control of these regions.That’s why China needs to make peace with India.So far, China has done very little to appease India. In fact, it has done quite the opposite: repeatedly blocking India's efforts to join the Nuclear Supplier Group (NSG).And it has sided openly with Pakistan in the India-Pakistan Kashmir impasse, as evidenced by statements by China’s senior officials on the sidelines of the ongoing 71st session of United Nations General Assembly in New York.Perhaps, Russia could broker a peace accord between India and Pakistan, and save CPEC. That would be good news for the markets in the region.

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Re: Analyzing CPEC

Postby schinnas » 09 Jan 2017 11:13

Regardless of who joins CPEC, India needs to ensure that CPEC is dead on water as long as it passes through souverign Indian territory without explicit approval from India and paying tolls to India.

World will respect India once India laughs on top of the CPEC corpse.

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Analyzing CPEC

Postby Peregrine » 09 Jan 2017 19:02

nandakumar wrote:No logistics manager of a manufacturing unit in the Western part of India would want a raw material or component to be unloaded into Gwadar port and transported by road through Pakistan and diverted into India at Punjab or horror of horrors, via Jammu/Kashmir when he can unload the cargo into Mundra, Mumbai, Nava Sheva (JNPT), Marmagoa and so on or any of the major/minor ports all along the West coast. As for units located on the East coast, forget about it. It doesnt even make sense. So when people talk of investing in CPEC the Chinese are asking for Indian Govt money with no expectations of a return.

nandkumar Ji:

I do understand your concern.

There was an article in the Cwapistani media quoting Zardari - not exact words - India should use Gwadar Deep Sea Port as a "Shipping Hub.

All cargoes meant for India should be Discharged at the Deep Sea Port of Gwadar and then Transshipped to India by Ship to another India Port or by Land to India Destinations.

In addition he wanted India to construct LNG Tank Farms around Gwadar to receive and Store LNG as the Sea Coast of Baluchistan was Virgin Territory and - as it was sparsely populated - and then "Re-Gasified" and sent via Pipeline to India.
The Idiot not only realized that Mundra and possibly Kandla, along with another Deep Sea Port west of Mundra in Kutch envisaged by the Pallonji Group, are-will be providing full service to the Hinterland in Rajasthan, Haryan Punjab, J & K as also Eastern India as well as Central India.

In addition I believe the Reliance Group is building a Deep Sea Terminal in Mumbai's Vicinity.

Thus there is not chance of India using Gwadar.

Now to CPEC use by India for the C A Republics : I refer you to my Post of 07 Jan 2017 18:44 on this page. India’s trade with the C A Republics is Miniscule to say the least.

The Only use of CPEC for India is to transport Chinese “cheap cheap” Goods being manufactured in the upcoming setting up of Industrial Plants for consumer goods especially Textiles which might be labelled as Cwapistani Origin.

India should avoid CPEC and Gwadar like the Plague!

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Re: Analyzing CPEC

Postby nandakumar » 09 Jan 2017 21:48

To be honest I didn't think of transhipment by sea. But that only makes the case against Gwadar even stronger. The huge mother ships load at Rotterdam if we are talking of European cargo. They unload at Colombo. From there smaller vessels take the cargo to either ports of destination on the east or the west coast of India. If Gwadar has to be economically viable China must consciously diver cargo that would otherwise unload at any of the South East Chinese ports via Malacca straits and divert them to Gwadar for onward transhipment by road via Pakistan and north west China. They wouldnt do it and undermine the economic viability of the South China ports unless there is a war like situation across Malacca straits. In short they want India to underwrite the investment cost of OBOR so that they can take on any dispute on the South China Sea involving US, Japan and the rest of the nations on the South China Sea which might lead to the sea lane being blocked. I say, No Thank You. We are fine the way we are.

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Analyzing CPEC

Postby Peregrine » 14 Jan 2017 03:18

X Posted on the STFUP Thread

Senior economist raises several questions regarding CPEC

ISLAMABAD: As both countries make steady progress on the China-Pakistan Economic Corridor (CPEC), Dr Kaiser Bengali, former advisor to Balochistan chief minister, has raised the issue of socio-economic implications of the mega investment project.

Dr Bengali, who till recently was heading Balochistan chief minister’s Policy Reform Unit, raised 12 questions that, according to him, require satisfactory answers in order to protect Pakistan’s economic interests.

The questions encompass socially and politically sensitive topics like protection of jobs, industries, implications of CPEC on Pakistan’s balance of payments, budgetary positions and benefits Balochistan, Pakistan’s most underdeveloped province, would get out of the $55 billion umbrella deal.

In 2013, the Chinese president made the concept of CPEC public for the first time and subsequently both the countries signed CPEC Framework agreement – which now covers projects worth $55 billion, in addition to allied benefits like construction of industrial zones. Last month, the federal government managed to address most of the concerns of the provincial governments after it made them part of development process.

The actual benefits from CPEC will depend on how the corridor is planned and executed, said Dr Bengali. “As an advisor to former CM Balochistan, I would often get questions that did not have answers,” he added.

Was an assessment conducted?

Dr Bengali has asked whether Pakistan prepared an overall CPEC feasibility before formally signing the sovereign agreement with China. He also wants an answer to the question whether CPEC Environment Impact Assessment was carried out or not.

Dr Bengali said that according to his information Pakistan did not conduct feasibility and environment impact studies, although China has conducted its own. However, officials of the Ministry of Planning said that project specific feasibility and environment studies were done.

The issue of environment has also been raised by the Giglit-Baltistan region, the gateway of CPEC, as its environment may get affected due to transit traffic that will pass through its scenic mountainous roads.

Dr Bengali has put forward questions on the shares of Pakistan and Balochistan in Gwadar port revenues. Dr Bengali is currently member National Finance Commission on behalf of Balochistan. He said that there was no clarity whether Gwadar-Khunjerab Highway will be a toll road and if so, what will be the provincial share in revenues generated by the National Highway Authority?

The planning ministry says revenue will be shared according to the existing arrangements between the centre and the federation.

Adverse impact of CPEC on local industries

One of the most important questions the economist has raised is about the positive and adverse impacts of Pakistan becoming a transit route of China on local industries. According to the existing arrangement, China is bringing goods, machinery and labour for the construction of CPEC projects. The hope that these construction activities would generate economic activities is fading away.

However, the planning ministry said that in the 6th Joint Cooperation Committee meeting both countries agreed to include nine industrial parks in the CPEC framework, which will promote manufacturing activities.

Tax exemptions offered to CPEC-related projects

Dr Bengali also raised the question about the quantum of tax exemptions to CPEC-related imports and its impacts on state revenues and the manufacturing sector. The government has already granted an income tax holiday status to Gwadar Port. It has also exempted all types of taxes on two big infrastructure projects of CPEC.

It has waived off dividend tax on the income of the Chinese financial institutions. Recently, it has waived off all types of taxes on construction and income generated by Chinese from the four mass train transit projects being built in four provincial capitals.


Rough estimates suggest, so far Rs150 billion worth tax exemptions have been given to CPEC-related projects, according to sources in the Federal Board of Revenue. These include Rs80 billion exemptions to four mass transit projects.

Dr Bengali has also asked that what will be the medium and long-term implications of the CPEC arrangement on the country’s balance of payment position and impact of foreign exchange inflows in shape of loans, foreign direct investment and outflows out flows in shape of debt repayment, profit and outward remittances.

Share of locals

So far, CPEC-related imports have adversely affected the country’s trade balance and the federal government is trying to find a way to book these loans as FDI.

According to him, another question is; what is the budgetary burden on Pakistan for protecting Chinese roads and sea convoys. This is a very critical point, as the federal government is demanding the four provinces to give away 3% of their divisible pool for security purposes.

Dr Bengali also asked about the jobs for locals in the security units, being raised for CPEC-related protection, recruited from districts through which the Gwadar-Khunjerab Highway passes. The planning ministry has said that many projects have been initiated in Gwadar to make the locals part of the development activity.

He also wants answers to the question regarding water provision plan for Gwadar and the plan to ensure that Gwadar does not become a Baloch minority city.
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Re: Analyzing CPEC

Postby Falijee » 15 Jan 2017 03:19

London-Based Banking Analyst Has Questions About The C.P.E.C

Chinese Investment in Pakistan: Rhetoric or Reality?

Much has been written and said about the announcement by the Chinese government in April this year to invest $46 billion in building an economic corridor, the China Pakistan Economic Corridor (CPEC), in Pakistan linking China to the Central Asian republics. The announcement came on the back of the $12 billion loan package made to Pakistan by the World bank the previous year. So, just in two years, ( 2014- 2015) Pakistan has decided to add quite a bit to it's debt burden !
...there are serious questions that need to be raised as regard the risks of the promised Chinese investment in Pakistan. ( "risk" is not being discussed in Pakistan !)
The lion’s share of the investments are largely going to be in the form of loans of $22 billion by Chinese banks to help resuscitate some of the ailing debt-ridden Pakistani coal and nuclear power plants. ( how much of the $ 46 Billion is grant ? is it all loans ? The loans can be broken down into two broad temporal categories, the ‘Early Harvest’ ones in the next 3-4 years, and, the other loans promised after 2020. [1] The key question that China watchers need to raise here is, how much is the Chinese government willing to stretch it’s banks now that there is a stock-market meltdown, currency devaluation, import stagnation and deepening recession within it’s own country? ( The Pakistanis are blissfully unaware of the internal economic situation in China . )
Advocates of China’s overseas investment model will no doubt point to the muscular investment by China in countries fraught with high political, financial and credit risks in Latin America and Africa in the last ten years. In fact, the example of Venezuela, a politically and financially high-risk country in which China has invested over $52 billion from 2008 up till 2014, the biggest Chinese investment in any single country so far, may hold some of the answers. Chinese were/ are supporting Venezuela for it's oil ; apart from "so-called strategic location" and Anti- India stance what does Pakistan have ?
lthough foreign loan-related information is hard to come by as regards most Chinese state-owned lenders, it is estimated that international investments comprised one-fifth of China Development Bank’s loans in end-2014. The majority of the loans were commodities-backed and have gone to resource rich countries in Latin America and Africa which were deemed extremely high risk by western banks or western multilateral institutions. [2] The overseas investment model of China Development Bank was based on the oil-for-loan model originally pioneered by Standard Chartered Bank. In most cases, the loans made by China Development Bank typically went straight to the Chinese companies contracted for the project. It created a win-win scenario for the Chinese government by marrying off low-wage Chinese labour to long-term infrastructure projects in exchange for secure and continuous supply of oil and commodities. All the Chinese loans to Venezuela were commodities-backed, under which Venezuela was obliged to keep supplying to China millions of barrels of oil to feed the Chinese economic boom.
As oil prices plummeted this year, Venezuela along with most of the other South American countries slumped into a severe recession. This forced the lender, China Development Bank, to extend loan maturities reportedly close to USD 37 billion and rewrite the entire loan repayment terms with Venezuela early this year. [3] This is as good as a technical default by one of the biggest borrowers of Chinese debt and it led to Chinese policy-makers question the wisdom of Chinese banks going on lending to such risky countries. [4] The only comparable example of a similar recent event of technical default is when Greece reneged on it’s repayment of a IMF loan in June this year. There is a growing understanding amongst Chinese lenders and policy-makers that this outward investment model was only good enough to last as long as the oil and commodities boom lasted. The same could technically happen with the loans to Pakistan
Given the above background of technical default by Venezuela and the fact that China has entered it’s own recession in decades, it is only reasonable for both the Chinese government and the banks to ask whether the financial and political benefits of investing 46 billion in Pakistan outweigh the risks and costs of their involvement in all the projects. It may be quite instructive in this regard to highlight two recent examples that bring out some of the issues faced by the Chinese banks as regards lending to Pakistani power projects.
The first one is an instance of a Chinese bank lending directly to a Pakistani power company. Just the previous year, in 2014, Chinese banks refused to lend $ 560 million to the Thar coal fired plant because of the inability of the equity owner, Sindh Egro Coal Mining Company (SEMC) to share the project risks equally (50:50) with China Export and Credit Insurance Company (Sinosure). SEMC was not prepared to bear more than 20% of the project risks. [5] The disagreement was not limited just to the percentage of risk-sharing but also the interest margin and the Sinosure premium. The Chinese banks wanted to charge 5.5% interest margin over LIBOR (the London Inter-bank Lending Rate) and Sinsoure wanted to charge 9% premium for their cover which were both above that specified by the National Electricity Power Regulatory Authority (NEPRA). The Paki Aam Abduls have high hope for CPEC , without figuring out the long-term consequences to the sover-virginity of Pakistan ; technical experts however are questioning the "over exaggerated" benefits of CPEC !

Although an announcement was made implying sharing of risk by Chinese lenders in majority of the Pakistani power projects at 80:20 ratio as part of the $46 billion investment package, it is still unclear as regards the details of any agreement reached on issues of interest margin over LIBOR and the premium for credit risk the Chinese banks are looking for to go ahead with the project.The second example relates to a recent disagreement arising on a loan given by a Chinese bank to the Pakistani government. The Exim Bank of China agreed to grant concessional loans of about 7.8 billion USD (85% of 9.2 billion USD total project costs) to the Pakistani government for the 2200 MW Karachi Coastal Nuclear Power Plants K2 and K3. ( Many technical -safety experts have questioned the location of this plant near a highly populated area - the risks involved in a nuclear leak !) [6] Since Pakistan is under an IMF programme which places certain obligations on the government as regards maintaining a budget deficit threshold, the government wanted to create a separate public sector company to finance the project well after the loan agreement terms were agreed. The government suddenly decided to keep the entire project costs off-budget in order to avoid showing any sharp increase in their budget deficit. This was not acceptable to Exim Bank of China as it would have led to making significant changes in the terms of the loan agreement. Further the nature of the loan would have changed as such changes would have required the loan to be reclassified as a commercial loan instead of a loan given to a sovereign government.
The fact that the Chinese government and the Chinese central bank are having to fend off a daily worsening foreign exchange problem amidst a gradually deepening recession, it is unlikely that they will be too keen to prop up another high-risk sovereign like Pakistan. The recent policy decisions by China aimed at tightening capital outflows includes certain foreign exchange restrictions imposed on banks and mitigating the problem of over invoicing by Chinese companies doing business abroad. [7] A crucial factor of policy significance that the Chinese government must now take into account is that Chinese state-owned companies will gradually begin to experience a tightening of credit as the growth slows down and domestic spending begins to shrink. It is unlikely that the Chinese government can continue to grant the kind of subsidies it has been doling out to state-owned banks and companies since 2008 which in turn fed on a lending frenzy to high-risk, resource-rich sovereigns across the world. [8] In fact, in a directive by the People’s Bank of China (PoBC) this month, Chinese banks transacting abroad have been mandated to deposit 20% of their contracted value of future foreign exchange transactions. This step needs to be construed as one of many that will require Chinese lenders to assess risks flowing from future foreign exchange transactions with other countries much more cautiously than they are used to doing. In this case, the so-called "strategic reasons" for this project outweigh the economic advantages, according to the Chinese thinking !
The People’s Bank of China (PoBC) is clearly rattled by the extent of capital outflow in the last couple of months that saw it’s foreign exchange reserves drop by $ 94 billion in a single month, ie, August, by conservative estimates (the higher estimates are in between $150-$200 billion). [9] As of date, it was the single largest monthly fall in Chinese foreign exchange reserves in absolute terms. In fact, the foreign exchange outflow situation became so severe that the PoBC had to rush to offload $110 billion of US Treasury holdings in August to defend its currency. [
Again, the Pakis are blissfully unaware of the internal economic situation in China ; secondly, as other analysts have pointed out, reliable data and information from China is hard to come by !
Last but not the least, a fundamental question that Chinese policymakers need to raise is how much geopolitical or strategic benefit will China gain from lending to a high-risk sovereign like Pakistan. As of now the CPEC comes out as a barren road without much significant geopolitical or strategic benefits for China. China shares a common border with various central asian countries and have already invested in building infrastructure there. As Sushant Sareen has clinically analysed, the only geopolitical advantage being mainly sought by the Chinese in Pakistan is their close involvement in operating from and maintaining Gwadar Port. [11] The rest of the investments are thrown in as sweeteners by the Chinese government which will undoubtedly be negotiated hard on the ground by all the Chinese lenders.

The influx of Chinese workers ( their housing, their feeding , their entertainment , their security, their alien culture ) in Islamic Pakistan will bring it's own "headache" as both parties probably know . And to top it all, the Balochis have vowed that they will not allow the Pakis and the Chinis to exploit their land and resources in the name of "development" :mrgreen:
It is not very clear right now as to what deal the Chinese government has struck with the Pakistani government as regards extraction and future supply of mineral resources. Regardless of that though, it is not lost on either the Pakistanis or the Chinese that loans from Chinese lenders will be all dollar denominated and they come with the usual strict stipulation of at least 70-75 per cent of the project workforce being Chinese. With Chinese wages having gone up significantly in the last five years, the role of Chinese workers as low-cost labour is mere nostalgia. At a time when China is busily reorienting it’s domestic growth model, the grandiose plan to build an expansive economic corridor in the middle of nowhere will surely entail long-term costs for Pakistan that can both be painful and burdensome.
– Saptarshi Ghosh
Saptarshi Ghosh is based in London and consults on banking and securities regulation and policy, governance and compliance issues, alliances and collaborations. His interests encompass political economy undercurrents influencing strategic relationships between countries.

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Re: Analyzing CPEC

Postby srin » 15 Jan 2017 08:14

I think it is just lovely that two of our foremost adversaries are putting so much money into a single basket called CPEC. A single Baloch or TTP open season on it can result in serious losses.

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Re: Analyzing CPEC

Postby A_Gupta » 15 Jan 2017 11:29

Karthik S wrote:If that day comes when we try to retake entire PoK, how will chinese react with regards to CPEC? Apparently all our top politicians have kept silent on the fact that it passes through our territory occupied by the pakis.


Haha, India should issue an official policy statement: that when entire PoK reverts to India, India will not put barriers in the flow of Chinese goods across the Karakoram Highway, and that the Chinese need not fear the economic impact of such an eventuality.

Alternately, something like "India looks forward to joining CPEC after PoK issue is settled to India's satisfaction." or "India will join CPEC after consultation with the government of Tibet".

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Analyzing CPEC

Postby Peregrine » 15 Jan 2017 22:50

X Posted on the PESW & STFUP Threads

Chinese exports to Pakistan increase following CPEC launching
ISLAMABAD: China’s exports to Pakistan considerably increased following the launching of China Pakistan Economic Corridor (CPEC), China Central Television reported on Saturday.

Trade with countries along the Belt and Road witnessed growth as exports to Pakistan rose from 11 percent to 14.1 percent.

Meanwhile, China’s foreign trade stabilised and returned to growth in the fourth quarter last year with total foreign trade value up 3.8 percent in the three-month period data from the General Administration of Customs (GAC) showed on Friday.

In the fourth quarter of 2016, China’s exports were up 0.3 percent from a year ago while imports climbed 8.7 percent compared with a 0.3 percent decrease in exports and a 2.3 percent rise in imports in the third quarter, according to GAC spokesperson Huang Songping.

The country’s exports in yuan denominated terms dropped 2 percent to 13.84 trillion yuan (about 2 trillion US dollars) year on year in 2016 while imports rose 0.6 percent from the 2015 level to 10.49 trillion yuan.

The total export and import value decreased 0.9 percent year on year to 24.33 trillion, yuan Huang said at a press briefing.

In 2015, the country’s total export and import values decreased 7 percent year on year to 24.59 trillion yuan.

China’s foreign trade surplus narrowed to 3.35 trillion yuan in 2016 down 9.1 percent from a year earlier, according to GAC data.

Huang attributed the trade recovery to supportive policies, a rebound in external demand and a stabilising domestic economy. Despite the sluggish world economy and shrinking trade activity in the past year, some economic indicators slowly improved, Huang said citing the purchasing managers’ indexes in developed economies which suggested expansion in the last quarter.

Boosted by growing domestic demand crude oil imports in 2016 rose 13.6 percent to 381 million tons while iron ore imports climbed 7.5 percent to 1.024 billion tons, the GAC reported.

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Analyzing CPEC

Postby Peregrine » 17 Jan 2017 22:25

CPEC: lessons from history

HOW does one get a grip on the proposed China-Pakistan Economic Corridor (CPEC) and its associated investments without any hard information except for the hype? In the absence of any mechanism for credible evaluation I suggest we hold it up against a historical parallel and see what emerges by way of tentative conclusions. Some discussion grounded in real experience may be better than taking sides in the dark.

Around the turn of the 20th century, the British invested vast sums of money in the part of the subcontinent that now comprises Pakistan. Amongst these investments were the network of canals and barrages, the post and telegraph, and roads and railways. All included it would have likely added up in real terms to be bigger than the $56 billion associated with CPEC.

What came of all that investment and what economic transformations did it sustain? At the macro level, Pakistan remains a desperately poor country with around a third of its population struggling to survive below the poverty line. Almost half the population is functionally illiterate without access to safe water and sanitation or adequate healthcare. Stunting, malnutrition and infant and maternal mortality are at levels considered unacceptable in the rest of the world.

The sobering conclusion would be that even if the investments had huge economic payoffs, extremely venal governance ensured that while some people became phenomenally rich very few of the benefits trickled down to the majority in any meaningful sense.

Notwithstanding the issues of governance and distribution, which remain as critical now as then, the question remains: did the investments have huge economic payoffs? Even to speculate intelligently on the question one would need to disaggregate the investments and consider them separately.

Take the canal colonies and the barrages. I believe most people would accept that the outcomes were positive and significant. One can assess the outcomes in terms of crop outputs, crop yields, employment created, or incomes generated for farming households.

Next, consider the railways where the comparisons become more interesting. The link between Karachi and Peshawar via Hyderabad, Sukkur, Multan, Lahore, and Rawalpindi can be considered the central artery of the Pakistani economy capable of transporting people and products efficiently and economically. Once again, I believe there would be agreement that the outcomes were positive and the payoffs significant.

Now consider some other investments in the railways that turned out differently. Among these were the links between Peshawar and Landikotal on the Afghanistan border, the link between Quetta and Chaman that was intended to have been extended to Kandahar in Afghanistan, and the Trans-Balochistan railroad from Quetta to Zahedan, inside Iran.

All these could be considered as economic corridors of their time. Even if they were not intended as such, they could have become so after the independence of Pakistan. The Trans-Balochistan railroad extended 455 miles (732 kilometres) with 38 stops linking very friendly countries between which much trade was possible. Indeed, under the Regional Cooperation for Development there was the possibility of extending the link to Turkey and thereby into Europe, an opening with immense economic potential. Today, the Peshawar-Landikotal link is inoperative, and the Quetta-Zahedan link operates on a nominal frequency of twice a month. None of these corridors had any transformative impact on the local or national economies.

Take roads as another example. The British upgraded and extended the Grand Trunk Road, an ancient trade route linking populated habitations, to great and sustained benefit. Contrast the limited economic impact of the more recent Lahore-Peshawar motorway. The equally recent Karakoram and Thar-Karachi highways have had virtually no significant transformative impacts on the local economies except to make it easier for local labour to migrate to more prosperous areas for employment.

Some tentative conclusions can be adduced. For investments to yield economic benefits, it seems a necessary, if not a sufficient, condition for them to either generate employment or to connect populated locations at relatively comparable levels of economic development. The historical evidence suggests that routing corridors through sparsely populated territory even with associated investments that create very few jobs is unlikely to be transformative. And linking disproportionately developed areas without prior complementary investments may just accelerate a drain of people and resources from the less developed regions.

It is indeed possible that investments in roads in some sparsely populated areas, eg, in the northern areas or along the Makran coast, would pay off economically if as a result a significant inflow of people is facilitated as would be the case with a major boost to tourism. But such prospects are scarce given Pakistan’s security conditions and increasing social conservatism.

It will no doubt be argued that the unsuccessful rail corridors mentioned here were not made by the British for economic but for strategic military purposes and therefore comparisons with CPEC are invalid. However, as mentioned before, there was nothing to prevent the conversion of the readymade investments to economic purposes after 1947. There was significant trade potential both with Afghanistan and Iran and the latter was a very friendly country at the time. The shrivelling of the corridors should prompt serious questions inquiring what went wrong after all the investments were made.

At the same time it could be argued that CPEC is an equally strategic initiative of the Chinese presented as one with transformative economic payoff for Pakistan. The latter remains to be demonstrated independently and objectively. The historical evidence cautions that mere hand-waving is not enough.

One should also consider what might be the fate of CPEC if relations with China turn sour in the future. This may seem a far-fetched concern at this time but the evolution of the relationship with Iran should provide a reality check. Pakistan’s abysmal relations with all its primary neighbours do not leave much room for complacency and demand a credible fall-back alternative.

If the national objective is to further the development of the lagging provinces of Balochistan and Khyber Pakhtunkhwa, it might be better to think in terms of employment-generating investments in the regional economies much as the canal colonies created jobs in the Punjab in the 20th century. It might make more sense for economic corridors to follow and not precede such investments.

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Re: Analyzing CPEC

Postby svinayak » 21 Jan 2017 11:16



How India's Project Mausam will counter China Silk Road

This will counter CPEC

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Analyzing CPEC

Postby Peregrine » 21 Jan 2017 20:41

X Posted on the STFUP Thread

The Chabahar troika
Indian premier Modi’s visit to Iran finally sealed the deal on Chabahar port, enhancing India’s connectivity with Afghanistan and Central Asia. The India-Iran-Afghanistan troika will give tough competition to the China-Pakistan axis emerging at Gwadar port. India has already spent Rs600 crore on building road connecting the Iran border and Afghanistan. Chabahar connectivity will improve road as well as maritime connectivity giving a boost to trade relations. India committed to pay oil dues worth $6.4b earlier to Iran.
In this changing scenario of international and regional politics and especially in the context of Pakistan’s Gwadar Port and Iran’s Chabahar Port, Chabahar has dented Pakistan’s centrality to Afghanistan’s external trade and Central Asia as a major portion of its transit business has been lost to Iran and now India. Recently, Afghanistan finalized a tripartite trade agreement with Iran and India on using Chabahar as an alternative route, which is expected to increase bilateral trade from $800 million to $3 billion.
Considering the utility of Chabahar over the last decade, the Iranians have invested considerably in its development. A 600-kilometer-long highway linking Chabahar to Zahidan in Iran’s north, only 240kms from Malik on the Iran-Afghanistan border, is already operational. India has also already spent $100 million on building a 220-kilometer Zaranj-Delaram highway since 2009 in the southwestern Nimroz province of Afghanistan which is 700 km away from southeastern Iran and can be easily extended to be linked to Chabahar.

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Analyzing CPEC

Postby Peregrine » 21 Jan 2017 21:03

How China's investment could leave millions of Pakistanis jobless - By Bloomberg

As Pakistan opens itself to China’s Silk Road plan and billions of dollars worth of investment projects, the head of the bank owned by the Abu Dhabi Group is warning of an influx of cheap goods that may leave millions in the South Asian nation jobless.

While the Chinese investments and loans worth more than $46 billion will bring new industrial activity and a need for services, Pakistan may be unprepared for a rush of wares from its larger neighbor that it can’t compete against, said Atif Bajwa, chief executive officer at Bank Alfalah Ltd., the country’s sixth largest lender.

“There is going to be an influx of cheap goods coming in which will negatively affect our own industry, so what is our policy to address that?” Bajwa said in an interview in Karachi, Pakistan’s commercial hub. “If we don’t compete effectively through our industrial policy with that then we are not certain of our own future.”

The administration of Pakistan’s Prime Minister Nawaz Sharif is targeting a growth rate of about 5.7 percent in 2017, the fastest pace in a decade, riding on the wave of Chinese projects in new power plants and roads as part of a so-called China-Pakistan Economic Corridor. More than three quarters of the investments in Pakistan will be implemented this year.

Ahsan Iqbal, Pakistan’s planning minister, in an interview in the capital Islamabad late on Friday dismissed Bajwa’s doubts.

“These are misfounded fears,” Iqbal said. “We will build up Pakistan’s industrial zone capacity so we can increase our exports.”

Despite his concerns, Bajwa believes there is every reason to be optimistic if the world’s sixth most populated nation can protect local industry, with the bank focusing on small and medium sized businesses.

“Along these new roads and along these new industrial activity that will be developed, there will be a need for services,” he said. “Meaning you will need hotels, restaurants, logistics and various other service industries to support this whole activity.” Yes Sir! The famous Cwapistani Rest & Recuperation as also the "Peechhay say ana Baghian Mein Industry.

The small and medium sized enterprises segment contributes to more than a quarter of the bank’s total loans and that share is expected to increase in the next two years, Bajwa said, without disclosing exact details. The bank, which started operations 19 years ago, has a large consumer business and is the largest credit card provider in Pakistan.

More Spending

“Small and medium sized enterprises is one segment that generally is the core of any growing economy or strong economy,” Bajwa said. The bank’s shares have gained 50 percent in the past year, compared with a 59 percent gain in the nation’s benchmark index.

With elections looming next year, the government is expecting new power plants to end blackouts which have plagued Pakistan for years.

Bajwa expects the growing economy and new projects to help them double deposits from 641 billion rupees ($6.1 billion) and advances from 328 billion rupees in the next five years. The bank will also increase branches to as many as 800 in three years from a current 650 outlets.

“The whole structure of this economy is beginning to change because of the CPEC dynamics,” said Bajwa. “Once the infrastructure is laid out, the road network, the rail network, power plants, the port and the economic zone, one is expecting there will be significant spill over effect in the economy.”

‘Inch Up’

Sharif is also appealing to farmers after he intervened this month to extend a subsidy for fertilizer after funding ran out. The prime minister also removed some taxes to boost the country’s dwindling exports this month.

“There may be more government spending in the next year and a half, or two years, which will probably not be significant, but there will be some pressure on interest rates to inch up,” said Bajwa.

Pakistan’s central bank has kept its rate unchanged at 5.75 percent for the past three meetings, after lowering the discount rate by 375 basis points to 6.25 percent since 2014.

“I don’t anticipate that there will be any pressure on interest rates to move up this year,” Bajwa said. “If it happens it will be 25 basis points, not more than that.”

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Re: Analyzing CPEC

Postby rsingh » 21 Jan 2017 23:28

Khusro ke ghar st ladka hua........chum chum ke maar dala

translation
St boy was born eunuchs..............they killed him by kissing. That is what happening with CPC/Bakistan.

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Re: Analyzing CPEC

Postby arun » 21 Jan 2017 23:57

X Posted from the STFUP thread.

Falijee wrote:………………….{Above Snipped}……………………..

Paki- Pasand Writer Massages Paki Ego About CPEC :

AND NOW THE "GOOD SIDE" OF THE CPEC DEBATE !

CPEC And The 21st Century Convergence Of Civilizations :roll:
By Andrew Korybko
……………………………………{Rest Snipped}………………………..


Two bits of the article that caught my eye.

However, due to India’s jealous jingoism, Moscow can’t openly declare its eagerness to utilize CPEC, hence why it must resort to a curious diplomatic game of denying any official interest or investment in the project, but at the same time remaining silent about the likelihood of private Russian companies using this apolitical infrastructure network. There’s of course no way that Moscow could or ever would prohibit its private citizens and business entities from transporting their goods across CPEC, so India’s obsessive efforts to prevent Russia from using it will inevitably be in vain. Nevertheless, the Russian Ministry of Foreign Affairs must still play along with India and officially deny that Moscow is involved in CPEC, which is technically the truth because the government itself has no part in it, though the same obviously can’t be said for its private citizens once the project is fully operational and potentially linked to Siberia by means of the Altai-Xinjiang Corridor.


Barring a suicidal “surgical strike” campaign by India or an unthinkable “limited intervention” aimed at cutting CPEC in half through Gilgit-Baltistan (both of which might frighteningly seem attractive to the pro-American Hindutva extremists currently running New Delhi at the moment), the US and India will resort to operating through proxies in order to achieve their grand strategic objective of sabotaging this project.


Use of terminology like ” India’s jealous jingoism”, “pro-American Hindutva extremists currently running New Delhi” and claim that “the Russian Ministry of Foreign Affairs must still play along with India and officially deny that Moscow is involved in CPEC” led me to dig further about the antecedents of the website, Katehon. During that digging came across an article in The Weekly Standard that said that Katehon Board of Supervisors member Alexandr Dugin was described as “Putin’s Rasputin” and the Katehon website/think tank as “Kremlin-backed” ( 'Putin's Rasputin' Endorses Trump ).

I hope our foreign policy establishment is maintaining a very close and hard headed watch on Russia that is untainted by any sentiment as Russia’s dalliance with the Mohammadden Terrorist Fomenting Islamic Republic of Pakistan spearheaded by Putin’s man for the job, Zamir Kabulov, has not been supportive of Indian interests.

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Re: Analyzing CPEC

Postby Falijee » 25 Jan 2017 07:32

C.P.E.C To Ensnare Pakistan In A Debt Trap According To This Political Analyst

China’s Debt-Trap Diplomacy
By Brahma Chellaney

NEW DELHI – If there is one thing at which China’s leaders truly excel, it is the use of economic tools to advance their country’s geostrategic interests. Through its $1 trillion “one belt, one road” initiative, China is supporting infrastructure projects in strategically located developing countries, often by extending huge loans to their governments. As a result, countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence.
Of course, extending loans for infrastructure projects is not inherently bad. But the projects that China is supporting are often intended not to support the local economy, but to facilitate Chinese access to natural resources, or to open the market for low-cost and shoddy Chinese goods. In many cases, China even sends its own construction workers, minimizing the number of local jobs that are created. ( Reports have surfaced in the Paki press about Chinese workers in Karachi, working on CPEC project, who are not permitted to go outside their compound; also, Pakistan is becoming more "Chinified" ; just last week, Shahbaz Sharif CM, Pakjab, "celebrated" the Chinese New Year in Lahore by cutting a massive cake ; the day is not too far off when"Flied Polk Rice " will be as common as Biryani or Aloo Ghost :mrgreen:
Several of the projects that have been completed are now bleeding money. For example, Sri Lanka’s Mattala Rajapaksa International Airport, which opened in 2013 near Hambantota, has been dubbed the world’s emptiest. Likewise, Hambantota’s Magampura Mahinda Rajapaksa Port remains largely idle, as does the multibillion-dollar Gwadar port in Pakistan. For China, however, these projects are operating exactly as needed: Chinese attack submarines have twice docked at Sri Lankan ports, and two Chinese warships were recently pressed into service for Gwadar port security. Pakiland drawn more and more in the Chini orbit !
In a sense, it is even better for China that the projects don’t do well. After all, the heavier the debt burden on smaller countries, the greater China’s own leverage becomes.
Moreover, some countries, overwhelmed by their debts to China, are being forced to sell to it stakes in Chinese-financed projects or hand over their management to Chinese state-owned firms. In financially risky countries, China now demands majority ownership up front. For example, China clinched a deal with Nepal this month to build another largely Chinese-owned dam there, with its state-run China Three Gorges Corporation taking a 75% stake. The same thing is happening in Pakistan where Chinese interests have acquired a 40% stake in the Pakistan Stock Exchange in the "name of providing liquidity" and plans are afoot to issue a CPEC Bond Issue . And the local power utility in Karachi ( KESC) has been partly sold to a Chinese firm !
Some developing economies are regretting their decision to accept Chinese loans. Protests have erupted over widespread joblessness, purportedly caused by Chinese dumping of goods, which is killing off local manufacturing, and exacerbated by China’s import of workers for its own projects. In the case of Pakistan, the debt trap could be used to serve its geopolitical interest in its rivalry against India !
By integrating its foreign, economic, and security policies, China is advancing its goal of fashioning a hegemonic sphere of trade, communication, transportation, and security links. If states are saddled with onerous levels of debt as a result, their financial woes only aid China’s neocolonial designs. Countries that are not yet ensnared in China’s debt trap should take note – and take whatever steps they can to avoid it.

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Analyzing CPEC

Postby Peregrine » 26 Jan 2017 03:21

X Posted on the STFUP Thread

Why is PML-N being so secretive about CPEC’s investment plan?

If the China Pakistan Economic Corridor (CPEC) wasn’t already an enigma, the recent debates regarding its pros and cons have muddled this into an even bigger mess. On one hand, there are the knockers who didn’t shy away from labelling it as the future East India Company (EIC), and on the other, we have the blind patriots – the ones that hold CPEC at the highest level of sanctity, that merely questioning the transparency regarding CPEC’s projects amounts to treason for them.

Undoubtedly, these directionless debates have a lot to do with the suspicion and political sensitivity created by the government around the CPEC framework. However, to me, both prevalent views are far-fetched and perilous to national interests.

At first, to equate China’s role, within the context of the CPEC project, with that of EIC is simply an embellishment. Such an over-statement has been countered by various writers in recent days, rather successfully. And quiet evidently, a strict comparison of both is fallacious and misplaced for the simple reason that the days of claiming ‘EIC is like colonialism’ are long gone. Since Pakistan was in a weak state, China’s investment should have been welcomed. China already has deep pockets, thus one should not expect the country to take anything away from us, the way the EIC robbed the subcontinent of its resources.

However, the EIC analogy cannot be completely disregarded. The days of colonialism might be past us, yet, states no longer employ the weapons of the colonial era to subjugate other states, as capitalism now does it for them. In the words of Kwame Nkrumah, “Capitalism is but the gentlemen’s way of slavery.”

For a state to thrive in this era of capitalism, its financial independence is integral. When a state is financially dependent on another, the way our country was on Saudi Arabia and the United States, that is when a phenomena like that of the EIC in the subcontinent occurs.

Nevertheless, it is the second view that seems more precarious. Nonsensical patriots, who are trying to make CPEC a sacred cow, are forgetting that it is not China’s gift via the Pakistan Muslim League-Nawaz (PML-N) government to the people of Pakistan. If that were the case, then there would be nothing to ponder over. But to our dismay, most of the projects under CPEC are loans which we, the public exchequer, will have to pay back. Unfortunately, the mysterious CPEC framework agreement has not been revealed yet, thereby, we do not know about the terms and conditions encircling the proposed $51 billion investment. In the words of the Governor of the State Bank of Pakistan, “I don’t know out of $46 billion [in CPEC deals] how much is debt, how much is in equity, and how much is in kind.”

Thus, turning a blind eye to the whole thing is not patriotism, but on a very conservative scale, it is imprudence.

Both the views advanced in the CPEC debate have been poles apart. Ignoring the fact that we as a nation are currently facing a paradox – where on one hand, there is the necessity for such an extravagant investment in our country and on the other, the fear of subjugation at the expense of such an investment.

The antidote for this problem lies with the government, who is primarily responsible for the smooth and uncontroversial functioning of the corridor projects. Unfortunately, the PML-N government has made this matter more ambiguous by building a smokescreen around the CPEC framework agreement. Secondly, and more recently, the ignorance towards Public Procurement Rules in CPEC projects means that the impetus for speculations has been renewed. There is an inherent need for the government to step up and put an end to all the speculations by implying transparency in the CPEC projects.

It is unfortunate that the Sino-Pak friendship is being questioned at a time where a collaboration between the two friendly states is at an unprecedented high – the reason being the lack of transparency around this collaboration. Thus, an onus also lies on the Chinese counterparts as well; they must realise that giving loans through backdoor channels won’t help their cause. For the success of their ‘One Belt One Road’ plan, of which CPEC is an integral part, they need to make sure that the people of Pakistan are engaged and given a sense of ownership in the corridor. The US-Pakistan relationship must serve as a lesson to be learnt – despite the fact that the US injected billions of dollars into Pakistan over the last decade, they were still disliked as a country.

For now, as a nation, we have to redeem ourselves from this state of disunity and realise that by labelling CPEC as a form of colonialism, or making it contentious, might dissuade our foreign investors. Similarly, turning a blind eye to accountability would mean renting Pakistan out on the terms and conditions of investors. Therefore, positive criticism and calculated pressure must be exerted on the authorities to ensure that we are provided with the chance to utilise our strategic location. Firstly, to warrant a profit out of the loans we are availing, and secondly, to result in economic prosperity rather than a burden of unpayable debts.

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Re: Analyzing CPEC

Postby SSridhar » 26 Jan 2017 17:57

China strong-arms 'all-weather friend' Pakistan on coal power project - Shailaja Neelakantan, ToI
China has strong-armed 'all-weather friend' Pakistan to scale back up a coal-fired power project in Balochistan, Dawn reported.

In November, Pakistan had scaled down its Hub power project - that was to be run on imported coal -from 1,320MW plant to 660MW. This was as part of an overall decision to restrict power plants based on imported fuels. The project is being developed by a consortium of Hub Power Company and China Power International Holding Company at an estimated cost of $2.5 billion, Dawn said.

The companies were not happy with that and "took up the matter at the highest level", Dawn said.

"The Chinese side is reported to have told Pakistan that commercial viability of the Hub power project on supercritical technology was possible only with 1,320MW for which it had also been given tariff by the National Electric Power Regulatory Authority on the request of the government of Pakistan," the newspaper said.

The companies also said that a reduction of capacity three years after the project was signed was "unacceptable."

Work on the project has already begun and it is expected to be completed in August 2019.

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Re: Analyzing CPEC

Postby Prem » 03 Feb 2017 07:16


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Analyzing CPEC

Postby Peregrine » 18 Feb 2017 01:14



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Analyzing CPEC

Postby Peregrine » 19 Feb 2017 15:38

Fully Posted on the STFUP Thread

CADGING PAKISTAN ENRICHING CHINA - Capital suggestion

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Re: Analyzing CPEC

Postby ramana » 20 Feb 2017 03:06

Former GOI official Tilak Devashar has written a lot about CPEC.

https://twitter.com/tilakdevasher1

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Re: Analyzing CPEC

Postby amit » 20 Feb 2017 09:00

A bit OT for this thread but a must read for Pak lurkers. I'm sure you guys will get a nice and warm feeling knowing that your embrace will be manifold greater from the Panda. :-)

Chinese investment aid to Sri Lanka has been a major success—for China

“China lends money to countries so that they can build infrastructure that is built by Chinese firms,” said Christopher Balding, associate professor at the HSBC School of Business at Peking University in Shenzhen. “Infrastructure is built. The money is sent back to Chinese firms. The country now has new infrastructure, and a lot more debt.”


The debt, in turn, can result in Beijing getting something rather useful in nations with resources it covets: negotiating leverage to gain access to those resources, including land.

It’s a pattern seen in other countries that have long indulged in Chinese investments, including Venezuela and Cameroon. And it’s one likely to repeat as China continues work on its One Belt, One Road (OBOR) intitiative, designed to connect the Eurasian landmass by land and sea. That includes countries like Laos and Pakistan, both of which have indulged in Chinese funding.


And while China has long practiced “checkbook diplomacy,” alarm bells are ringing (paywall) over the trail of debt being left behind.


The project is under the supervision of China Communications Construction Company (CCCC), with its subsidiary China Harbour Engineering Company (CHEC) handling much of the workload. Until this month CCCC and all its subsidiaries were blacklisted by the World Bank for corrupt practices, stemming from a project in the Philippines. That made it ineligible for the past eight years to build bridges or roads backed by World Bank funding anywhere in the world.

For Sri Lanka, that meant all the projects undertaken by CCCC involved no other international credit institution like the World Bank—and ended up being entirely financed by China.


Balding likens China’s approach to Sri Lanka to the one that Chinese state firms have toward national infrastructure projects back home, which have generated significant GDP growth while inflating the ballooning domestic debt.

“In China, this financing model of building infrastructure and [worrying] about the associated debt later is common,” he said. “Whether it’s airports, most of which lose money, or train lines, most of which require enormous subsidies to keep from exploding their debt burden.”


As the new administration quickly discovered, the debt Sri Lanka contracted with China was already too big to work around. It now amounts to $8 billion; meanwhile, 95.4% of all government revenue is currently going towards debt repayment.



It's not just Gawdar port but all the nice and shinny and polluting power plants that are coming up in Pakistan. On top of that the Pakistani textile industry is going be wiped out.

The problem for India is going to be when the sh*t hits the ceiling in Pakistan, we are going have a major problem as peacefools are made to understand that India is responsible.

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Analyzing CPEC

Postby Peregrine » 24 Feb 2017 03:36

X Posted on the CPEC Thread

Hail to the new master

The year is 2050. Pakistan is lined with motorways and railroads. Highways begin at the head of the country in Khunjerab and reach all the way to its tail in Gwadar. Every major power hub of the country has a power plant dedicated to it. Industrial parks are found at the outskirts of major cities. The cities have changed too. City skylines are lined with huge malls and skyscrapers housing multinational corporations. City markets are filled in excess with all kinds of services. The country is replete with economic activity. Pakistan, with its plethora of infrastructural facilities, has become what people, mostly politicians, had envisioned in their wildest dreams. And let us not forget the crown jewel. The icing on the cake. The cherry on top. Gwadar. Gwadar’s cityscape is no different than that of Shanghai or Dubai. Gwadar port exudes an aura of a thriving machine, at the epicentre of a massive manufacturing system. Many perceive it as having surpassed Dubai in terms of economic value. Its deep water port seemingly has more traffic than Dubai, Mumbai, Singapore. Pakistan is thought by many to have become a regional economic superpower. All is well. But is it?

All is not well. The reality behind this façade of economic development and political stability in the country is quite different. What lies behind this is quite bitter as opposed to the superficial image of economic prosperity portrayed by our skyscraper filled skylines. It is a truth that many do not want to speak of or write about. People who do intend to disseminate information about the actual politico-economic reality of the country face opposition from the general narrative prevalent among the economists within the country and those outside it. Reports by international ranking agencies rank Pakistan as one of the largest economies in the region. Such reports are used by the government, for political purposes, to suppress the truth and portray the country as a regional economic superpower. The majority of people have swallowed this narrative and the propaganda spread by the government to augment it. Many Pakistanis like to refer to the country as the Fifth Asian Tiger now. Anyone who says otherwise is seen as a foreign agent and a traitor, which does not come as a major surprise, as the art of terming people who speak the truth as traitors is a century old now. Many a times, journalists who talk about this issue are arrested on false charges. With blatant opposition from both the government and the blinded masses, and the fact that people are content with the false reality they are in, the unnerving truth remains buried deep down.

What is this truth that the government is trying to mask? What is this dark secret that the government has managed to hide, but which is whispered quietly among people who dare? What is this truth that the government has coated over with its lies to blind the country? It is the fact that we were deceived. We were misled by our leaders. We were fooled. Fooled by a dear friend of ours. This friend had always portrayed itself to have our best interests at heart. This friend, with whom we thought we had a friendship higher than the highest mountains, deeper than the deepest oceans, and sweeter than the sweetest honey, fooled us. This friend gave us a medicine that he claimed was the panacea for all our ills. But through that medicine, he enslaved us and it is a kind of slavery whose shackles of domination cannot be thrown off easily. The dear friend was China. And the medicine was CPEC.

A few decades back, our country was in a perilous state. We were deemed an economic failure by many. Our industries were falling apart. Unemployment was rife. Power shortage had become the bane of our existence. The solution to all our problems was given to us by our dear friend. China promised to build an economic corridor through our country. The economic corridor would include highways, pipelines, power plants, industrial parks, and a road connecting Pakistan’s north to its south. We wholeheartedly accepted the idea of CPEC, like a sick person desperately seeking a medicine. Due to our poor, economically miserable state, coupled with our obsession with infrastructure and our misguided perception that roads and buildings signify development, we fully swallowed this idea. And hence began our downward spiral into slavedom. Again.

We were drilled with the notion that the realization of CPEC would transform us into a self-sustaining entity able to stand on its own legs. We were not aware that this very same CPEC would break our legs. That it would bend us before someone who was doling out gifts wrapped in their concealed desire for economic imperialism. We were told that China would give us loans to finance a large number of infrastructural, energy and industrial projects. It is beyond me what went through the minds of economists and statesmen at the time that they were unable to understand that this was a project financed by a huge amount of loans. I cannot possibly comprehend that with Pakistan’s public debt of $180 billion at the time the project was in its initial stages, why did we agree to burden ourselves with $50 billion in addition. Why did we not understand that the loans we were taking for these projects amounted to a value that even our total public debt should not have been?

All that the enlightened economists at the time could say to critics was that they did not understand development. That they did not understand how debt worked. That these are ‘soft’ loans. That their interest rate is minimal compared to the prevailing interest rate. No one however realized that a ‘soft loan’ is a loan nonetheless, that even if interest was totally waived off, the amount of the loan in itself was humungous. But sadly we were convinced that these projects would generate foreign investment that would boost our economies. And that the revenue generated from these economic activities would pay back everything. Build-operate-transfer had become the slogan of economists at that time. Their narrative was that the Chinese would build all the projects, operate them, and transfer projects back as their debt is paid. Well, decades have passed. The Chinese did build those projects. They did operate these projects. But they never transferred a majority of those projects to us. It was simply because we haven’t been able to pay back that debt. Now, most of these projects are owned by the Chinese companies. Industries, power plants, even all these highways are operated by the Chinese. Recently, some lawmaker made an allegation that the transport tax we were promised years back is collected by Chinese companies that operate these highways. Pakistani entities do have a share in the companies that operate or work on CPEC, but these are minor shares. Our status is just like that of a parasite feeding on a large organism. We are in this situation because we could not generate the revenue to pay back the gigantic amount of debt incurred to finance these projects. How could we? We never owned the projects. What we owned was our minimal share as compared to that of our debt-financiers. Pakistani entities owned a stake in CPEC ventures that generated revenues which were as meagre as the share that they had in those ventures. So, we never had a way to generate enough revenue in order to pay back the loans. And our inability to pay back that debt has prevented us from actually reaping the benefits of CPEC.

Although CPEC brought in a lot of investment in the form of foreign investors like MNCs, but as is the case with every developing country with capitalist corporate entities present in it, the revenue generated is flown out of the country. What CPEC managed to do was provide a fertile ground to these foreign entities and a route for China to send its goods abroad. And the vast presence of Chinese goods and companies in Pakistan has been detrimental to the local industry. Pakistan is not only a passageway for the Chinese, but also a dumping ground for their low quality goods. The Chinese economic presence has suffocated us. The whole corridor, from the roads to the plants to the port is technically like a tentacle that rings through Pakistan’s land right to its tail. A tentacle of the octopus that is the Chinese economic imperialism. An arm that they dug through Pakistan to solidify their economic hegemony in the region and in the wider world.

This economic supremacy of the Chinese has also transformed the political setup in Pakistan. The vast economic influence in turn calls for political influence at a similar scale. People have started feeling that Chinese influence is seeping into our political circles. Many of the decisions made by our politicians seem to uphold Chinese interests. Taxes being waived off for Chinese companies and traffic, Chinese companies not being scrutinized and regulated are a few examples of the Chinese having a free reign in our country as our politicians look the other way.

Another way in which our slavery has manifested itself in the economic arena is the Chinese domination in the job arena. CPEC projects caused an influx of Chinese people into the country. Resultantly, majority of these ventures are operated by the Chinese. All the higher officials of these companies are Chinese. The lower jobs are reserved for our graduates. It’s like how Pakistanis were treated in Dubai. Now Pakistanis get a similar treatment in their own country.

CPEC has also given the Chinese politicians and officials a reason to feel that we owe them. After all, they ‘transformed’ our country into a hustling bustling hub of gigantic malls and wide highways. And this is why they feel entitled to a higher status than the common citizens of Pakistan. Interactions between Chinese officials and Pakistani people in public exhibit an aura of condescension and patronisation on part of the Chinese officials. Recently, a Chinese diplomat misbehaved with a law enforcement official and beat him up. The story goes that his guards also fired at the official. But strangely, the matter was brushed under the carpet by the government. No action was taken against the diplomat. Times are eerily reminiscent of the era when Americans used to manhandle our citizens. Maybe someday we will witness a Chinese Raymond Davis.

How naïve were we? How did we not realize that this would happen? Maybe we were ignorantly optimistic. Maybe we were swept away by the promises of the ruling government of the time. Our gullible selves were implanted with the notion that CPEC would benefit Pakistan and not the entity that financed those projects, built those projects, and now operated those projects. We were under the naive impression that CPEC would not only benefit the Chinese corporations that will operate their businesses here, but the wealth generated by those businesses would be shared among the common man like langar at a shrine on Thursday. Our deluded selves, which were greatly attracted to infrastructural ventures and were constrained by the inability to understand the importance of self-sustainability, wholeheartedly accepted this project.

We were seemingly oblivious to the fact that this was a ploy by the Chinese to economically enslave us as part of their campaign of economic imperialism. Two hundred years back, we were enslaved by the British through the East India Company. But that enslavement was aided by military conquests. Our knees were brutally and explicitly broken. Following our independence from the British, we were enslaved by the Americans. The Americans gave us enemies and made us fight their wars. Because of our innate desire to not ever become a self-sustaining entity, and the fact that we would get military aid in return for fighting their wars, we happily became their mercenaries. However, this time it was different. The British and the Americans were open bullies, forcefully making us do what they asked, but China was different. Our dear friend China had always portrayed itself to have our best interests at heart. Our enslavement at the hands of our dearest friend was subtle and discreet. When we had fallen down, and were weak and hopeless, this friend gave us a pat on the head and told us that everything would be okay. That he had a panacea for all our miseries. This friend, who was in reality a demon at the crossroads, gave us a medicine in the form of CPEC and told us that it would help us get up.

And here we are now. Years later. Still down. Still a slave. With our begging bowl in front of a new master. I don’t know what the future holds for us, whether we will ever be economically independent. What I know is that when China is done with us, it would dispose us off and go on to prey upon a new victim. But for now, we are their slaves. So all we can say is; Hail to the new master.

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Re: Analyzing CPEC

Postby SSridhar » 27 Feb 2017 13:18

PSM, Pakistan Steel Mills, land allocated for industrial park under CPEC - DAWN

China is taking away everything.

Pending a strategic decision on its privatisation, Pakistan Steel Mills (PSM) continues to lose its land — this time to an industrial park to be set up under the China-Pakistan Economic Corridor.

A government official told Dawn that Prime Minister Nawaz Sharif had approved allocation of 1,500 acres of PSM land for the industrial park. The prime minister has “desired that it (matter) may be taken up with the Privatisation Commission and Board of Directors of PSM,” said an order issued by the industries and production ministry.

The ministry said the land was originally meant for investment as per PSM book of accounts and could be utilised for development of an industrial park under the CPEC. “In order to finalise the modalities regarding establishment of the industrial park, the matter may please be placed before the (PSM) board,” the order said. The Privatisation Commission was asked to work out to facilitate the earmarked piece of land for setting up the industrial park.

Interestingly, the PSM board has been incomplete and without a chairman since the PML-N came to power in 2013.

Finance Minister Ishaq Dar had given an undertaking to the International Monetary Fund (IMF) on Aug 19, 2013, that the government would appoint a professional board immediately with inductions from the private sector.

But the board was never reconstituted with 12 members and instead it continued to have two members from the industries and production ministry and one each from the Priva­tisation Commission and the finance ministry. The only private sector member on the board is a former executive of the PSM.

Partly because of its incompletion, neither the PSM board nor its parent industries and production ministry has so far proposed privatisation of the country’s largest industrial unit, where the rot set in after 2007, taking it from a profit of Rs10.4 billion on June 30, 2008, to a loss of Rs26bn on June 30, 2009.

Then prime minister Yousuf Raza Gilani had ordered sacking of the PSM chief on the floor of the National Assembly over allegations of corruption. He ordered an investigation by the Federal Investigation Agency (FIA).

Nevertheless, the total losses and liabilities of the unit reached Rs200bn by the time the Pakistan Peoples Party government completed its five-year term in 2013.

The PML-N dissolved the PSM board and promised to restructure and revive the mill for ultimate privatisation.

This never happened, but the total losses and liabilities reached Rs415bn by December last year and are still counting.

The PSM has been continuously losing its land to various institutions, private investors and politically backed encroachers. The Sindh Board of Revenue is reported to have reclaimed about 1,770 acres of land from encroachers during the PPP tenure, but leased out a major part to investors at times at a rate as low as Re1 per square yard a year for 99 years, while some other parts were again encroached upon by land mafia and sold out to individuals.

Another 157 acres of land was recently leased out to the Port Qasim Authority for Rs9.3 million per acre, even though the Privatisation Commission had estimated the rate at Rs30m per acre. This piece of land is to be used for handling imported coal for the Sahiwal power project.

The Shaukat Aziz government failed to privatise the PSM in 2005-06 due to intervention by the Supreme Court. However, Mr Aziz approved allocation of about 930 acres of land for the National Industrial Park on lease, but the PSM could not recover the lease amount.

Another 220-acre plot was given to Al Tuwairqi Steel, which pledged it with the National Bank of Pakistan and subsequently left the scene.

Dissatisfied with the FIA inves­tigation, the SC transferred the case to the National Accountability Bureau in May 2012 with a deadline to complete the probe in three months, but its progress is still unknown.

Parliamentary committees, government stakeholders and investigation agencies have been discussing the PSM mismanagement and corruption during all this period.

Interestingly, the PSM was given a target for revival with Rs18.5bn fresh public money to achieve 70 per cent capacity utilisation in about a year, but was deprived of full gas pressure when capacity utilisation reached 65pc with a gap of a few months in June 2015 and has been on zero production since.

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Re: Analyzing CPEC

Postby chetak » 27 Feb 2017 13:59

Peregrine wrote:
panduranghari wrote:It looks like the Chinese are trying to secure reassurances that we wont retake GB in the immediate future.

panduranghari Ji :

I would differ.

I strongly feel that China wants to include India in CPEC so that India will be Under the Heel of China by having the Cwapistani Terrorists to keep disrupting the Indian Exports as well as Imports from & to Afghanistan and the CARs.

The Trade with the CARs - except Kazakhstan and Turkmenistan - is miniscule :

EXPORTS : US$ 362.45, IMPORTS : US$ 456.93 - TOTAL TRADE : US$ 819.38 MILLIONS

FYI : Indian Exports to Cwapistan are US$ 2,171.14 and Imports are US$ 441.03

Why does India need to Trade with the CARs?

Meanwhile China is pushing up Manufacturing in Xinjiang and will flood Cwapistan and india with Cheap Textiles etc. possibly for India disguised as Cwapistani Exports.

India should NEVER but NEVER JOIN CPEC

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+108

India does not need trade with the central asian republics and if such a need is being portrayed, it's for reasons other than some chillar trade. We need some access there to keep the pakis off balance by threat of attack from that direction.

I don't think that the hans bargained for Modi at all.

They must have been expecting to deal with MMS and his fuddu MEA gang of no hopers.

Modi has simply articulated India's legitimate and legal stand and the hans will not dare to test this in any international court. So intimidation and commercial lure are the only tools available to them.

India's missile defence capability has put paid to much of the han's useless saber rattling. Modi will also not be deterred by any country telling him to test or not test any system and India now has a much better capability of weathering any sanctions regime imposed by any country.

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Re: Analyzing CPEC

Postby SSridhar » 02 Mar 2017 13:31

CPEC claims and doubts - Editorial, DAWN
On Tuesday, Islamabad heard a series of perspectives on the China-Pakistan Economic Corridor that could be viewed as a case study on the gap between the claims and apprehensions about the project.

At the Council of Ministers’ meeting before the formal opening of the 13th summit of the Economic Cooperation Organisation, foreign affairs adviser Sartaj Aziz claimed that CPEC could “galvanise trade opportunities with the ECO region” by acting as a catalyst to boost intra-region trade through greater connectivity. He claimed that CPEC could help the entire ECO region emerge as a “formidable economic bloc” in the world as greater connectivity promoted greater trade and investment flows amongst its member countries.

This is how the tale of CPEC has grown with the telling. What was originally presented as a ‘game changer’ for Pakistan is now being touted as a ‘game changer’ for a region consisting of 10 countries.

In the official version, it appears there is no limit to how much change and benefit CPEC promises, while the costs and pitfalls in such a large undertaking are dismissed as the musings of sceptics and pessimists.

But on the same day, across town in Islamabad, two other discussions were under way on the promise and perils of CPEC that had decidedly less ambitious undertones.

In the Senate, during a hearing of the Planning and Development Committee, the chairman voiced apprehension that CPEC may or may not bring the promised benefits, saying “China is our brother, but business is business”.

Amongst the many things his committee was told, by staff from the Planning Commission that is tasked with overseeing the details of all CPEC projects, was that only Chinese investors would be allowed to invest in the proposed special economic zones being created under the corridor umbrella. No assurances could be given that Pakistani labour would be recruited to work in the Chinese projects, or that the country would see a revenue windfall.

At another event, organised by a think tank, a Chinese speaker highlighted the “enormous challenges” both China and Pakistan should expect to face, while adding that China would “never like it [CPEC] to fail”. Another speaker underlined the disproportionately expensive financing conditions that come with CPEC projects, adding that these are higher than the conditions at which China has lent to other countries such as Myanmar.

This is where our CPEC conversation stands today. The official claims are almost always met with deep apprehensions about the costs of CPEC financing as well as purported benefits for Pakistan’s economy.

Thus far, official quarters have not been able to put these apprehensions to rest. The government has surmounted much of the route-related controversy that erupted in the early days of the CPEC initiative, but these concerns regarding financial costs and economic benefits continue to bedevil the project.

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Re: Analyzing CPEC

Postby TKiran » 02 Mar 2017 14:10

The time to stop CPEC by covert options has passed, we know the problem clearly, we know the solution too. Pusillanimity is what is stopping from taking back the PoK

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Re: Analyzing CPEC

Postby chetak » 02 Mar 2017 17:24

X posting from the political thread.


It's utterly shameful the way that this ahole Pravin Sawhney, collaborating with the paki Ghazala Wahab is undermining India's position and trying to blackmail India into capitulating to the hans on the CPEC.

At least the paki's rational is understandable, but for ahole Pravin Sawhney to do this is reprehensible.

Note the tone and tenor of the write up.

Pravin Sawhney has written this and this looks very much like the post compromised stage literary delivery made to ISI special order.




SHREWD DIPLOMACY IS WAY AHEAD



SHREWD DIPLOMACY IS WAY AHEAD

Thursday, 02 March 2017 | Pravin Sawhney | in Oped

Prime Minister Modi must seriously consider attending the proposed One Belt One Road summit. This could open up new vistas for improved relations with Pakistan and China, and show a way forward for India to become a leading power

Since relations between India and China have hit a serious roadblock, the burden of retrieval is now wholly on New Delhi. This was the clear unsaid message that emanated from the recent strategic dialogue held in Beijing where Foreign Secretary S Jaishankar was met by State Councillor Yang Jiechi and Foreign Minister Wang Yi.

In a country sensitive about protocol, the significance of two senior Chinese leaders confabulating with Jaishankar could not have been lost on India. And it was two-fold: One, China will not relent on the three Indian demands that affect its strategic roadmap. These include agreeing to UN sanctions on Masood Azhar; India’s membership of the NSG (without Pakistan being in it); and halting work on the China Pakistan Economic Corridor (CPEC) which passes through Pakistan-occupied Kashmir. To be sure, CPEC is the flagship of President Xi Jinping’s One Belt One Road (OBOR) project and ,therefore, Pakistan is now China’s closest ally and not a lackey who can be dictated to abandon its proxy war (where Azhar is a strategic asset).

The other forceful message was that China desires good relations with India. Just as President Vladimir Putin’s Russia has merged its Eurasia Economic Union project with Xi’s OBOR in a win-win situation, Beijing wants Prime Minister Narendra Modi’s Act East policy to seek common ground with the OBOR and the BCIM (Bangladesh, China, India and Myanmar) which was offered to India before OBOR was unveiled by President Xi Jinping to the world. This was conveyed by inviting Prime Minister Modi to participate in the OBOR summit in May. It is a no-brainer that the summit meeting called by Xi would be attended by the heads of Government of Pakistan, Russia, Iran, Saudi Arabia, most Central Asian Republics, Afghanistan, Bangladesh, Sri Lanka, the Maldives, Myanmar, Nepal, Vietnam, Malaysia, Singapore and the Philippines, amongst others.

India’s reaction to Chinese invite has been surprising. Instead of mulling over the implications of attending the summit and the benefits it could accrue with China and Pakistan, especially in Kashmir where things are on the downslide, Jaishankar, in a display of misplaced arrogance, asked China to explain how India could attend the summit when the CPEC violates India’s sovereignty over PoK and Gilgit-Baltistan. While India’s tough stand against China will win accolades at home, it ought to be remembered that the military and geostrategic landscape in Kashmir is, at present, tilted against India, with little hope of redemption without a drastic course-correction.

Take Kashmir, where, in the absence of political reforms, the insurgency is on the upswing, with the onus on the security forces alone, particularly the Army, to keep things under check. Instead of appreciating that the Pakistan Army is heavily committed elsewhere, the Indian side is mindlessly assisting Rawalpindi’s Kashmir agenda.

For instance, the two top priorities of the Pakistan Army Chief, General Qamar Javed Bajwa, are to provide assured security to the CPEC, and to fight home-grown terrorism. Known to accomplish results on time, China will be extremely upset if the CPEC (and consequently the OBOR) — which passes through restive Balochistan and Gilgit-Baltistan — is delayed for security reasons. Moreover, if Rawalpindi is unable to defeat the bad terrorists which are allegedly being used by Afghanistan and India against Pakistan, its own good terrorists would be severely handicapped to fulfil its agenda of installing a favourable regime in Afghanistan — the gateway to Central Asian Republics.

Given Rawalpindi’s heavy commitments, it would be loath to open the third front against India by increased firings across the Line of Control to keep the Kashmir pot boiling. The Indian Army, unfortunately, has saved Rawalpindi from considering this reluctant choice. Instead of reviewing his options, Indian Army chief General Bipin Rawat has made things difficult for his own force by venting his frustration at civilian stone-pelters by saying they would be treated as terrorists. Rather than being scared, these civilians, in defiance, have been further emboldened in support of the swelling home-grown terrorists.

This has provided Rawalpindi with two advantages: It need not intensify cross-border firings since India is fulfilling its agenda by augmenting turbulence within, thereby enabling Pakistan to go to all conceivable global forums to highlight Indian atrocities on Kashmiris.

If only General Rawat had thought like the top operational commander, which he is, instead of being fixated on CI ops (tactical operations), he could have distracted Rawalpindi from its present priorities. A good option for him would have been to allow the J&K commanders to handle ground realities in collaboration with other security forces. He instead should have focussed on strengthening the operational level of war by providing field commanders with credible operational level options and war-waging materiel needed for conventional conflict. He should also reinvigorate the Chiefs of Staff Committee for better operational coordination between the three services, keeping the political leadership in the loop about the bigger geopolitical matrix.

For instance, once the CPEC becomes a reality, it would bring huge economic benefits to the region. So much so, that India, with its frugal infrastructure, will not be able to match the burgeoning prosperity unleashed by the CPEC-OBOR combine. Interestingly, Kashmiris are aware about this and relish the thought of reaping economic benefits from across the military line; in closeted conversations, they make the point that soon there would be three parties to the Kashmir dispute: India, Pakistan and China. They add tauntingly that India will not be able to stand up to China like it does to Pakistan.

With the CPEC in place, even the military pressure on India could increase in north Kashmir. China would not be averse to Pakistan seeking depth to the CPEC by assaulting north Kashmir where India is militarily weak. Given the increased military inter-operability between Pakistan military and the People’s Liberation Army, and the continued tactical operations (CI ops) by the Indian Army, India would be extremely vulnerable at the operational level of war.

More so, India’s bigger defence supplier Russia, which has accepted to be a part of the OBOR and has developed close ties with Pakistan, might find it difficult to support India.

The inescapable conclusion for India is for Modi to seriously consider attending the OBOR summit. This could open up new vistas for improved relations with Pakistan and China, and show a way forward for India to become a leading power.



(The writer is co-author with Ghazala Wahab of the recent book Dragon On Our Doorstep


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