Like almost every other allegation that has come out of the container, no evidence has yet been provided on the massive corruption or fraud in the China-Pakistan economic cooperation programme. To set the record straight, following is the response to major allegations that have been circling in the media.
Allegation 1 — it’s a loan not an investment: China is investing $34 billion in Pakistan through its private sector and state-owned banks. The idea that this is a loan is nothing but rumours.
Allegation 2 — amendment to procurement rules: due to security issues and political instability most foreign investors have already blacklisted Pakistan. Some economic partners like China and Middle Eastern countries that are still interested in investment need to be facilitated in order to bring in investment that can balance payments. It is for this reason that the government has applied special procurement rules.
Allegation 3 — no international bidding: according to the rules of the World Trade Organisation, countries having mutual Most Favoured Nation statuses enjoy the liberty of giving projects to each other without International Competitive Bidding in order to strengthen economic ties. Plus, economic partners usually give waivers in International Competitive Bidding on developmental projects. This is a common practice.
Allegation 4 — revised upfront tariffs for coal projects: due to lack of private investment and foreign direct investment in coal-related projects and in order to mobilise the unexplored reserves of coal in Pakistan, the upfront tariffs on coal projects were increased to facilitate investment in order to eradicate the energy crisis situation and to attract investment in Pakistan — a win-win economic move.
Allegations 5 — dumping of old Chinese coal plants: China is not dumping its coal plants. Only Beijing will be a coal-free zone. The rest of the Chinese coal plants will continue to operate as in the past. Furthermore, even if it were true, this is a common practice. When a developed country dumps its old technology in a less developed country, it is called comparative advantage, but in this case, it’s not that. Upholstering of old plants from China and transporting them to Pakistan and then reassembling them here will cost China a fortune. Transporting new parts or manufacturing parts to Pakistan will cost China less. Lastly, China has to call off coal plants at home by 2020 and these projects that are signed between Pakistan and China will start way before that — so dumping of old Chinese plants is improbable.
In the midst of the current political crisis where media, intellectuals and all the institutions are playing party politics by choosing sides, it has become rather difficult to separate propaganda from facts. It must be emphasised that in this internal war for power, protestors should at least not malign or defame Pakistan’s strategic partners like China or Turkey. Chinese investment can prove to be a game-changer for Pakistan’s sick economy and allow it to be a strong regional actor. Let’s at least not shoot ourselves in the foot and destroy whatever little we have.
Published in The Express Tribune, October 4th, 2014.
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Imran Khan even though criticising China for boosting his own political career but correct on many counts. Cheap Chinese goods may be good for the poor people but heavy infrastructure being purchased for public usage and country's defence, there should be no compromise on its quality and long term use. Chinese undoubtedly, are taking undue advantage by dumping obsolete jets, locomotives, electricity generation equipment, various projects run at their own terms without providing employment to locals. China, thus is fleecing friendless Pakistan and treating it as one of its provinces which needs to be reviewed urgently for welfare of the country. Most of Pakistan's requirements can be fulfilled by India at a much lower cost without compromising quality by improving relations and stop treating India as an enemy country.
Chinese investment - The MCC is black listed, most chinese companies provide poor technology and charge more. Due to so called funding by Exim Bank procurement rules are ousted. It js well known that all chinese projects have caused enormous financial losses.
@karim
All in the name of defeating India! If this is not shooting yourselves in the foot, what is?
Have we decided to close our eyes forever? I have never seen a country so bend their backs to suit the interest of another country. Today the cheap low quality chinese products are flooding our markets and closing our own industries. Our people lose jobs becasue of china. From defence, railways, telecom, roads, transport, shipping, power, electricity, coal, automobiles you name it, its virtually controlled by chinese. Pakistan has almost become a chinese colony of dumping products. Our foreign policy, trade, internal politics, economics are in the mercy of china as we have sold our country to them.
Seriously, bow tie? Brown sahb.
Don't be too scared. China doesn't have a choice, but to maintain its relationship with Pakistan as its only other friend in this region, North Korea is a bigger pain to deal with.