ISLAMABAD – Financial Times report over CPEC stirs a new controversy inPakistan.
Pakistan is mulling over a review of the China-Pakistan Economic Corridor(CPEC) agreementwith China, international economic magazineFinancial Timesreported link onSunday, citing Islamabad’s unease with what it claims is unjust benefitbeing enjoyed by Beijing-origin companies.
According to the FT’s claim,Chinese foreign minister Wang Yi, who was inPakistan over the weekend, indicatedhis country’s willingness to havediscussions pertaining to the CPEC again. In this regard, options to extendthe loan repayment period, among other plans, are being pondered upon.
Renowned economist Abdul Razzaq Dawood, who is also the advisor to primeminister Imran Khan on commerce, textiles, industries production andinvestment, is of the view that for the time being, all CPEC-relatedprojects must be halted for at least a year. Deals that are giving illegalbenefits to the Chinese companies need to be revisited and made anew, headded, since Pakistani companies are at a disadvantage.
“The previous government did a bad job negotiating with China on CPEC —they didn’t do their homework correctly and didn’t negotiate correctly sothey gave away a lot,” Dawood noted, as per the FT.
“I think we should put everything on hold for a year so we can get our acttogether. Perhaps we can stretch CPEC out over another five years or so,”he added.
However, Michael Kugelman, the deputy director of theWilson Center’s AsiaProgram, commented that slowing down the CPEC would be a major changeagainst the policies of the former prime minister Nawaz Sharif-ledgovernment.
“A decision to slow down the #CPEC process would be a major change from theprevious government’s policy,” Kugelman, a specialist on South Asiancountries’ relations with the US, tweeted.
Several ministers and advisers, according to the FT, believe that thegovernment should review CPEC-led investments in order to renegotiate thetrade deal since it has unjustly benefitted the Chinese companies.
“Chinese companies received tax breaks, many breaks and have an undueadvantage in Pakistan; this is one of the things we’re looking at becauseit’s not fair that Pakistan companies should be disadvantaged,” he told theFT.
Pakistani economists and officials agree that it was a better option topause and spread CPEC projects over a lengthier time period, instead ofditching the deal altogether — something that may attract anger fromBeijing.
Finance ministerAsad Umar, on the other hand, said Islamabad should be waryof not insulting China while an analysis of the CPEC deals in the lastfive-year period is carried out. “We don’t intend to handle this processlike Mahathir,” Umar had said in light of Malaysia’s new premier whocautioned against Bejing’s “neo-colonialism”.
The minister noted that he was reviewing an option to circumambulate theneed to go to the International Monetary Fund (IMF) for a bailout package —but that may mean new liabilities that Pakistan would owe to China andSaudi Arabia, its longtime partners.