The China-Pakistan Economic Corridor (CPEC) will remain a bilateral arrangement between the two nations, and no third country will have a say in its decision-making bodies, but their investment will be welcomed, according to the draft modalities for third-party participation.
Highly placed sources told The Express Tribune that it has been proposed that neither country will give any lead role to a third nation. Decision-making in the multibillion-dollar strategic initiative will remain restricted to Pakistan and China. However, other countries can still invest in CPEC projects, they added.
Pakistan wanted to sign these modalities for third-party participation in the CPEC on the sidelines of the Belt and Road Forum two weeks ago. But the Ministry of Foreign Affairs shared the draft modalities with Chinese authorities just 10 days before the visit of Prime Minister Anwaarul Haq Kakar to Beijing, resulting in a delay in their finalisation.
Third-party involvement will not lead to the tri-lateralisation of CPEC mechanisms such as the Joint Cooperation Committee (JCC) and the Joint Working Groups (JWGs), according to the draft modalities. The JCC is the highest decision-making forum of CPEC, but no country will have a seat at the JCC table.
In the past, Pakistani authorities have made statements about the participation of Saudi Arabia and Afghanistan in CPEC. But the draft modalities suggest otherwise.
The draft modalities further state that “both Pakistan and China welcome third-party participation in CPEC in mutually identified areas, on a project-by-project basis.”
But this “third-party involvement will not affect the leading role of the governments of Pakistan and China in steering CPEC.”
When contacted to inquire about the reasons for the delay in signing the framework for third-party participation, Asim Khan, a spokesman for the planning ministry, said that “both sides have agreed in principle to include third parties in CPEC projects, but the fine points are being deliberated by relevant stakeholders to make them more encompassing and meaningful.”
Khan said that this inclusiveness is a cardinal principle of CPEC, as evidenced by the example of Port Qasim Power, where third parties are already participating.
Qatar had invested $200 million in the Port Qasim Power Plant.
The planning ministry spokesman added that third-party terms of references are being developed to further refine their participation, but in the meantime, third-party participation is still in practice on a case-by-case basis.
Last month, the Ministry of Foreign Affairs had informed the Planning Minister that modalities for participation of third parties in CPEC have been conclusively determined through comprehensive inter-ministerial consultations. There was hope to sign these during the visit of PM Kakar.
Pakistan and China marked the one-decade celebrations of the CPEC this year -the strategic initiative of President Xi Jinping that met with success during its first five years. But it is now facing delays for the past five years. Chinese have repeatedly expressed frustration about the lack of implementation of agreements signed by both nations.
Fawad Hasan Fawad, Pakistan’s focal person on CPEC from 2013-18, said that the country could not even take one-fifth benefit of the CPEC potential.
The draft modalities stated that CPEC is an open platform and inclusive initiative based on extensive consultation, joint contribution, and shared benefits. Third-party involvement is aimed at attracting high-quality capital, technology, and expertise to enrich CPEC’s development, it added.
According to one of the proposed terms, third-party participation will only be made public after it is approved by Pakistani and Chinese authorities. The unilateral release of information about third-party participation will be avoided at all, according to the terms of reference.
Likewise, all potential third parties will be expected to maintain confidentiality of information until their respective projects are agreed and accepted.
The Joint Working Group on International Cooperation and Coordination is acting as the lead platform for the formulation of modalities for third-party participation in CPEC projects.
As per the proposal, the JWG on International Cooperation and Coordination would seek concurrence on the involvement modalities from the relevant authorities on both sides. After approval by relevant authorities, the JWG would forward cooperation proposals to all the concerned CPEC working groups for technical preparation and plan on implementation in their respective areas before final approval by the JCC.
It has been proposed that third parties mean foreign state-owned companies and private enterprises from countries other than Pakistan or China. They also include Multilateral Development Banks and International financial institutions.
Both countries are inclined to open industry, environment, agriculture, information technology, science and technology, developer or enterprise in special economic zones, mines & minerals and oil and gas for third-party participation.
The right to offer any project to the third nation for participation would be in the hands of Pakistan and China.
The Joint Working Groups would identify specific project proposals for third-party participation in their respective domains and get their approval from the JCC. Once intent is received from the third party, the offers would be evaluated and recommended to JCC for approval.
It is also proposed that CPEC’s regional scope would be expanded by improving the connectivity of neighbouring countries and regions with Pakistani sea ports.
Published in The Express Tribune, October 29th, 2023.
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