The Optics of CPEC

If only we put more thought into our words! As the murmurs over an alleged change in the ‘original’ route of the China-Pakistan Economic Corridor (CPEC) led to an all-parties conference (APC) in February this year, emotions surged amid calls that the CPEC was being turned into another ‘Kalabagh’ — the epitome of political controversy around a development project in this country. Meanwhile, the government didn’t know how to react. After initially presenting the eastern route as the investor’s choice, the official response then morphed into an outright denial of any change in the route. The response eventually took its final form a few days before the APC, when the Minister for Planning, Development and Reform, Mr Ahsan Iqbal, announced a triple-route. The prime minister also took the same stance in another APC on May 13. Since then, the government dismissed any objections to the route as mere propaganda, or even an “Indian mindset”. Still, the complaints didn’t go away.

Albeit cumulative, this shift in the position eroded the government’s credibility and prolonged the controversy. Moreover, while Mr Iqbal blamed unauthentic maps for spreading confusion for over a year, he didn’t provide an official map himself until as late as April 30. Since the honourable minister had been at pains to assert that the route never changed, it is then incomprehensible as to why he couldn’t produce the map any sooner. In fact, the website of the Planning Commission does not host the same map marking the routes to this day, whereas that of the National Highway Authority does not even have a section on the CPEC!

The negligence, thus, promoted a perception of secrecy around the CPEC that compounded a feeling of alienation among some stakeholders. For example, one viewpoint is that a relative lack of energy projects in Khyber-Pakhtunkhwa (K-P) and the slow pace of their approval in Sindh is due to excluding their chief ministers from the delegations visiting China. Instead, an inclusive approach could have been far more conducive and would have also cleared suspicions on the route, suggests Professor Dr Ashfaq Hasan Khan, a former economic adviser to the Musharraf government. “I would have arranged a meeting between the Chinese ambassador to Islamabad and parties such as the ANP. Since China is spending money on CPEC, a word from the Chinese might have served the purpose,” he said.

The business community has also been concerned. Some found exclusion from the festivities around the signing of MoUs ominous, while others faulted their provincial governments for failing to negotiate a fair cut in the deal. Then, there are some hard questions. Will the additional Chinese import through the CPEC inflate our net import bill? Will our domestic industry running largely on imported fuel sustain the Chinese competition? Can we avoid this competition by forming a regional value chain across China and Pakistan that adds value to Chinese produce along the corridor? What about our forex reserves? Can we repatriate profits in rupees instead of in US dollars? Will the environmental challenges allow sustained economic activity? Why not use hydel power instead of imported fuel for energy projects? In summary, the government has a lot to explain.

The significance of the CPEC, though, has allowed the government to redeem itself. The route saga however, forewarns against taking solo flight henceforth. Thus, mere information sessions pending decisions won’t be enough; instead, stakeholders must participate in the decision-making process itself. Thus, the decision to include all provinces while planning the Special Economic Zones in the APC on May 28 is laudable, and the results are there for all to see. However, the disparity in the budgeted amounts for the eastern and western routes still remains a concern for the smaller provinces; if that is merely the investor’s choice — this publication questioned on June 19 — why can’t Islamabad balance the expenditure from its own finances with the fiscal space that the CPEC investment allows? The government must explain its position and ensure that the spirit of the APC does not wither away.

In this age, the importance of ‘optics’ has increased manifold: you should not merely do the right thing, but also be seen to be doing so. Insularity, perceived or real, has cost the government precious goodwill; it can ill-afford any further lapses, especially given the evolving political situation in Sindh.

Published in The Express Tribune, June 25^th, 2015.

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