12-12-2017, 12:16 AM
*** 12-Dec-17 World View -- Pakistan overwhelmed and China alarmed over the China-Pakistan Economic Corridor (CPEC)
This morning's key headlines from GenerationalDynamics.com
****
**** China alarmed by consequences of its CPEC investment in Pakistan -- terrorism and corruption
****
![[Image: g171211b.jpg]](http://Media.GenerationalDynamics.com/ww2010/g171211b.jpg)
A truck drives along the China-Pakistan Friendship Highway in China's western Xinjiang province. (AFP)
The China-Pakistan Economic Corridor (CPEC) has almost become an
erotic fantasy. It's a $55-60 billion 20-year project that will
supposedly build a network of roads, railways and energy pipelines
aiming to connect western Chinese cities, starting from China's
easternmost city Kashgar in Xinjiang province, to the sea port in
Gwadar on the Indian Ocean in Balochistan province in southern
Pakistan. It will have both economic and military components. Power
generation, transport, commerce, R&D and the defense of Pakistan all
will be increasingly tied to Chinese investment, supplies and
interests.
For economic basket case Pakistan, the benefits are obvious -- a
tsunami of money that will overwhelm its existing debt problems, for
example allowing easy payment of the $6.1 billion that Pakistan owes
to the International Monetary Fund (IMF).
The benefits are also obvious for China. The transportation networks
from China to the Indian Ocean will connect China economically and
militarily to its other ports and bases in the Indian Ocean, bypassing
the risks of naval travel associated with problems like the South
China Sea, the Straits of Malacca, and the waters around India.
But since the agreement was signed in March, China has become alarmed
by the potential problems in two major areas: corruption and
terrorism.
The CPEC project will bring thousands of Chinese workers into
Pakistan, particularly into Balochstan, where most of the CPEC work
will be performed.
As we reported in June,
the
ISIS-linked Al Alami offshoot of Lashkar-e-Jhangvi (LeJA) is believed
responsible for the abduction and execution of two Chinese nationals
working in Quetta, the provincial capital of Balochstan.
LeJ is a terror group that has vowed to exterminate all Shias in
Pakistan, and has carried out numerous terrorist actions targeting
Shias and Sufis. But now LeJA is apparently turning its attention
from slaughtering Shias and Sufis in Pakistan to the slaughter of
thousands of Chinese workers and families who have come to Balochistan
to work on CPEC.
Four days ago, China warned its Chinese citizens in Pakistan of plans
plans for a series of imminent "terrorist attacks" on Chinese workers
there:
<QUOTE>"It is understood that terrorists plan in the near
term to launch a series of attacks against Chinese organizations
and personnel in Pakistan.
The embassy alerts all Chinese organizations and citizens in
Pakistan to stay vigilant, safeguard personal security, reduce
time spent outside and avoid going to crowded places as much as
possible."<END QUOTE>
There have been reports that China's Uighur separatist group the East
Turkestan Islamic Movement (ETIM) had “sneaked into Pakistan” and
posed a threat to Chinese nationals.
On November 20, China issued "new guidelines" for the CPEC project,
stipulating greater involvement of Pakistan's army in the project to
improve the security of Chinese nationals.
It's worth pointing out that Pakistan's army has not been successful
in preventing terror attacks on its own civilian population, and has
been accused of distinguishing between "bad terrorists," who
perpetrate terrorist attacks within Pakistan, and "good terrorists,"
who perpetrate terrorist attacks within India and Pakistan. It's
possible that these "good terrorists" are now turning their attention
to the thousands of Chinese workers moving into Balochistan, near the
border with Afghanistan.
South China Morning Post (9-June) and Reuters
****
**** China halts CPEC funds over concerns about corruption in Pakistan
****
In a recent speech, Mohammad Zubair, the governor of Pakistan's Sindh
province, said that the world was witnessing a historic moment, thanks
to China's mega-investment plans, which will make Pakistan a regional
leader. According to Zubair:
<QUOTE>"Pakistan’s economy was facing uncertain situation in
2013. The government worked day and night in its first three
years to revive country’s economy and our hard work has put the
economy on the path of prosperity. Pakistan Stock exchange is now
the best stock exchange of region and its rise is a proof of the
government’s successful economic policies."<END QUOTE>
So Pakistani officials were shocked on November 20, when China
unexpectedly withheld funds for continuing development of three
projects under CPEC, citing massive graft and corruption, and laid out
"new guidelines" for how funds for the CPEC project will be disbursed.
Previously approved financing will have to be resubmitted through new
procedures before funds can be committed.
China has become alarmed by the volatility of Pakistan's civilian
government, including the dismissal of Prime Minister Nawaz Sharif on
charges of graft and corruption, after some of his financial deal were
revealed by the Panama Papers. The terror threats against Chinese
citizens in Pakistan is one reason why China is stipulating greater
involvement of Pakistan's military, while another reason is that China
has lost faith in the civilian government and wants the army to take
responsibility for the project.
According to an analyst:
<QUOTE>"Had corruption been the reason behind the Chinese
step (to block funds), it would, or perhaps should, have happened
in July, when in the context of the Panama Papers, the former
Pakistani Prime Minister Nawaz Sharif and his relatives were
charged with financial irregularities and corruption, which
prompted the Pakistani Supreme Court to declare Nawaz Sharif
'unfit' for political office, resulting in his dismissal from the
Office of the Prime Minister of the country."<END QUOTE>
Despite the temporary cutoff of funds, a Chinese official visiting
Islamabad sought to reassure Pakistanis that all was well, and that
China wanted to build "a clean corridor, a corridor of integrity":
<QUOTE>"I want to express our strong conviction and
determination to press ahead the CPEC to deliver more benefits to
the people of Pakistan. ...
We want to build a CPEC that is a clean corridor, a corridor of
integrity.
We should also guard against the interference from external forces
and also prevent the domestic disturbances ... to promote the CPEC
construction, so that we can make CPEC a pathway of common
development, a pathway of shared fruits and the shared
future."<END QUOTE>
The unexpected cutoff of funds was a strong message to Pakistan that
China is paying the money, and China is dictating the terms, and the
project will be done China's way or not at all. Dawn (Pakistan) and Daily Times (Pakistan) and Times of India and Express Tribune (Pakistan)
****
**** Pakistan alarmed about a Chinese 'debt trap'
****
As time goes by and the euphoria about China's $55 billion investment
in Pakistan begins to where off, some people are beginning to wonder
if CPEC will actually be a financial disaster for Pakistan.
We've already described
what
happened with Sri Lanka, when China invested $1.2 billion in Sri
Lanka's Hambantota seaport in 2009. The plan was that revenue
generated by the seaport would be used to repay the Chinese, and the
surplus would bring wealth and happiness to all Sri Lankans. It
didn't turn out that way, and the project turned out to be a "debt
trap." Sri Lanka couldn't repay the loan, and now China has taken
control the seaport and the surrounding area. It's been a disaster
for Sri Lanka.
China's CPEC investment is supposed to be paid off the same way. The
CPEC projects would generate revenue from trucks carrying goods along
the CPEC roads and highways. According to analyst estimates, this
turns out to be a fantasy, based on the most optimistic assumptions
possible, just as happened with the Sri Lanka seaport project. If any
of these super-optimistic assumptions fail, which is what usually
happens in real life, then Pakistan's current debt of $6.1 billion to
the IMF will look like chicken feed. Instead of being a financial
bonanza, the debt burden will crush Pakistan's economy.
The IMF has examined the CPEC plans and is said to be "appalled" at
the implications of the project. Its main concern was that Pakistan’s
repayment capacity will remain weak, as the IMF does not see any major
increase in exports in the near future. Express Tribune (Pakistan) and Express Tribune (26-Oct)
Related Articles
KEYS: Generational Dynamics, China, Xinjing, Kashgar,
One Belt One Road, OBOR, Mohammad Zubair,
Nawaz Sharif, Panama Papers,
Belt and Road Initiative, BRI, Silk Road, Economic Belt,
Maritime Silk Road, Sri Lanka, Hambantota seaport,
Pakistan, China-Pakistan Economic Corridor, CPEC,
Balochistan, Quetta, India, East Turkestan Islamic Movement, ETIM,
Lashkar-e-Jhangvi Al Alami, LeJA,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- China alarmed by consequences of its CPEC investment in Pakistan -- terrorism and corruption
- China halts CPEC funds over concerns about corruption in Pakistan
- Pakistan alarmed about a Chinese 'debt trap'
****
**** China alarmed by consequences of its CPEC investment in Pakistan -- terrorism and corruption
****
A truck drives along the China-Pakistan Friendship Highway in China's western Xinjiang province. (AFP)
The China-Pakistan Economic Corridor (CPEC) has almost become an
erotic fantasy. It's a $55-60 billion 20-year project that will
supposedly build a network of roads, railways and energy pipelines
aiming to connect western Chinese cities, starting from China's
easternmost city Kashgar in Xinjiang province, to the sea port in
Gwadar on the Indian Ocean in Balochistan province in southern
Pakistan. It will have both economic and military components. Power
generation, transport, commerce, R&D and the defense of Pakistan all
will be increasingly tied to Chinese investment, supplies and
interests.
For economic basket case Pakistan, the benefits are obvious -- a
tsunami of money that will overwhelm its existing debt problems, for
example allowing easy payment of the $6.1 billion that Pakistan owes
to the International Monetary Fund (IMF).
The benefits are also obvious for China. The transportation networks
from China to the Indian Ocean will connect China economically and
militarily to its other ports and bases in the Indian Ocean, bypassing
the risks of naval travel associated with problems like the South
China Sea, the Straits of Malacca, and the waters around India.
But since the agreement was signed in March, China has become alarmed
by the potential problems in two major areas: corruption and
terrorism.
The CPEC project will bring thousands of Chinese workers into
Pakistan, particularly into Balochstan, where most of the CPEC work
will be performed.
As we reported in June,
the
ISIS-linked Al Alami offshoot of Lashkar-e-Jhangvi (LeJA) is believed
responsible for the abduction and execution of two Chinese nationals
working in Quetta, the provincial capital of Balochstan.
LeJ is a terror group that has vowed to exterminate all Shias in
Pakistan, and has carried out numerous terrorist actions targeting
Shias and Sufis. But now LeJA is apparently turning its attention
from slaughtering Shias and Sufis in Pakistan to the slaughter of
thousands of Chinese workers and families who have come to Balochistan
to work on CPEC.
Four days ago, China warned its Chinese citizens in Pakistan of plans
plans for a series of imminent "terrorist attacks" on Chinese workers
there:
<QUOTE>"It is understood that terrorists plan in the near
term to launch a series of attacks against Chinese organizations
and personnel in Pakistan.
The embassy alerts all Chinese organizations and citizens in
Pakistan to stay vigilant, safeguard personal security, reduce
time spent outside and avoid going to crowded places as much as
possible."<END QUOTE>
There have been reports that China's Uighur separatist group the East
Turkestan Islamic Movement (ETIM) had “sneaked into Pakistan” and
posed a threat to Chinese nationals.
On November 20, China issued "new guidelines" for the CPEC project,
stipulating greater involvement of Pakistan's army in the project to
improve the security of Chinese nationals.
It's worth pointing out that Pakistan's army has not been successful
in preventing terror attacks on its own civilian population, and has
been accused of distinguishing between "bad terrorists," who
perpetrate terrorist attacks within Pakistan, and "good terrorists,"
who perpetrate terrorist attacks within India and Pakistan. It's
possible that these "good terrorists" are now turning their attention
to the thousands of Chinese workers moving into Balochistan, near the
border with Afghanistan.
South China Morning Post (9-June) and Reuters
****
**** China halts CPEC funds over concerns about corruption in Pakistan
****
In a recent speech, Mohammad Zubair, the governor of Pakistan's Sindh
province, said that the world was witnessing a historic moment, thanks
to China's mega-investment plans, which will make Pakistan a regional
leader. According to Zubair:
<QUOTE>"Pakistan’s economy was facing uncertain situation in
2013. The government worked day and night in its first three
years to revive country’s economy and our hard work has put the
economy on the path of prosperity. Pakistan Stock exchange is now
the best stock exchange of region and its rise is a proof of the
government’s successful economic policies."<END QUOTE>
So Pakistani officials were shocked on November 20, when China
unexpectedly withheld funds for continuing development of three
projects under CPEC, citing massive graft and corruption, and laid out
"new guidelines" for how funds for the CPEC project will be disbursed.
Previously approved financing will have to be resubmitted through new
procedures before funds can be committed.
China has become alarmed by the volatility of Pakistan's civilian
government, including the dismissal of Prime Minister Nawaz Sharif on
charges of graft and corruption, after some of his financial deal were
revealed by the Panama Papers. The terror threats against Chinese
citizens in Pakistan is one reason why China is stipulating greater
involvement of Pakistan's military, while another reason is that China
has lost faith in the civilian government and wants the army to take
responsibility for the project.
According to an analyst:
<QUOTE>"Had corruption been the reason behind the Chinese
step (to block funds), it would, or perhaps should, have happened
in July, when in the context of the Panama Papers, the former
Pakistani Prime Minister Nawaz Sharif and his relatives were
charged with financial irregularities and corruption, which
prompted the Pakistani Supreme Court to declare Nawaz Sharif
'unfit' for political office, resulting in his dismissal from the
Office of the Prime Minister of the country."<END QUOTE>
Despite the temporary cutoff of funds, a Chinese official visiting
Islamabad sought to reassure Pakistanis that all was well, and that
China wanted to build "a clean corridor, a corridor of integrity":
<QUOTE>"I want to express our strong conviction and
determination to press ahead the CPEC to deliver more benefits to
the people of Pakistan. ...
We want to build a CPEC that is a clean corridor, a corridor of
integrity.
We should also guard against the interference from external forces
and also prevent the domestic disturbances ... to promote the CPEC
construction, so that we can make CPEC a pathway of common
development, a pathway of shared fruits and the shared
future."<END QUOTE>
The unexpected cutoff of funds was a strong message to Pakistan that
China is paying the money, and China is dictating the terms, and the
project will be done China's way or not at all. Dawn (Pakistan) and Daily Times (Pakistan) and Times of India and Express Tribune (Pakistan)
****
**** Pakistan alarmed about a Chinese 'debt trap'
****
As time goes by and the euphoria about China's $55 billion investment
in Pakistan begins to where off, some people are beginning to wonder
if CPEC will actually be a financial disaster for Pakistan.
We've already described
what
happened with Sri Lanka, when China invested $1.2 billion in Sri
Lanka's Hambantota seaport in 2009. The plan was that revenue
generated by the seaport would be used to repay the Chinese, and the
surplus would bring wealth and happiness to all Sri Lankans. It
didn't turn out that way, and the project turned out to be a "debt
trap." Sri Lanka couldn't repay the loan, and now China has taken
control the seaport and the surrounding area. It's been a disaster
for Sri Lanka.
China's CPEC investment is supposed to be paid off the same way. The
CPEC projects would generate revenue from trucks carrying goods along
the CPEC roads and highways. According to analyst estimates, this
turns out to be a fantasy, based on the most optimistic assumptions
possible, just as happened with the Sri Lanka seaport project. If any
of these super-optimistic assumptions fail, which is what usually
happens in real life, then Pakistan's current debt of $6.1 billion to
the IMF will look like chicken feed. Instead of being a financial
bonanza, the debt burden will crush Pakistan's economy.
The IMF has examined the CPEC plans and is said to be "appalled" at
the implications of the project. Its main concern was that Pakistan’s
repayment capacity will remain weak, as the IMF does not see any major
increase in exports in the near future. Express Tribune (Pakistan) and Express Tribune (26-Oct)
Related Articles
- China takes control of strategic Hambantota seaport in Sri Lanka, raising concerns in India (11-Dec-2017)
- Execution of two of China's citizens in Pakistan raises concerns about CPEC (10-Jun-2017)
- Massive China-Pakistan CPEC energy project said to end energy crisis 'soon' (23-Mar-2017)
- Terror attack in Quetta, Balochistan, Pakistan, kills 75 (09-Aug-2016)
- Pakistan's Lashkar-e-Jhangvi (LeJ) continues plan to exterminate Shias (03-Nov-2015)
KEYS: Generational Dynamics, China, Xinjing, Kashgar,
One Belt One Road, OBOR, Mohammad Zubair,
Nawaz Sharif, Panama Papers,
Belt and Road Initiative, BRI, Silk Road, Economic Belt,
Maritime Silk Road, Sri Lanka, Hambantota seaport,
Pakistan, China-Pakistan Economic Corridor, CPEC,
Balochistan, Quetta, India, East Turkestan Islamic Movement, ETIM,
Lashkar-e-Jhangvi Al Alami, LeJA,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
