GP Short Notes # 764, 19 October 2023
“It is wrong to describe BRI financing as a 'debt trap;' it is rather an essential tool for helping countries,” says Kakar
On 18 October, Interim Prime Minister Anwaarul Haq Kakar reaffirmed Pakistan’s resolves to further China -Pakistan Economic Corridor (CPEC) while attending the third Belt and Road Initiative Forum (BRI) in Beijing, China. Kakar congratulated Beijing on the 10th anniversary of BRI and expressed the significance of the initiative being paramount for the world to advance connectivity and shared prosperity. He hoped that moving forward, the BRI would look into uplifting rural farmers, education and supporting small businesses. Kakar said: “This vision promotes cooperation, collective security, inclusive and sustainable development, and a balanced ecosystem as the only way to address global challenges.”
Chinese Premier Li Qiang expressed his satisfaction and support for the steadily growing CPEC relations and noted the positive momentum the bilateral cooperation was heading towards. Pakistan is looking forward to continuing this engagement and even endorsed Chinese global vision and connectivity, said Kakar. He pointed the CPEC has played a vital role in generating new economic life and opportunity into Pakistan.
Fifty projects accomplished under CPEC, says Kakar
Interim Prime Minister Anwaarul Haq Kakar also announced at the meeting that USD 25 billion worth 50 project have come to fruition and have been completed under CPEC. He said that they successfully completed the construction of an airport at the southwestern Gwadar port. On 18 October, Chinese state media Xinhua reported of the “China-funded airport in Pakistan to facilitate regional connectivity” called Gwadar International Airport in Balochistan. The building of the expensive airport came under scrutiny comparing it to China funded airport in Nepal called Pokhara International airport, that is now saddling the debt owed to China. Several also questioned the location as Balochistan stands to be one of the most tumultuous provinces facing not only economic regress but also frequent political and security issues caused by militant and terrorist activities. China has heavily invested in the area that stands crucial to the shipping route to the Arabian Sea through the Strait of Hormuz, while the possibility of it becoming a vibrant route incurring revenue is questioned. Kakar also announced the plans to complete clean energy projects in four to five years.
Some of the major CPEC projects in Pakistan include the following:
Mainline-1 railway project signed between Islamabad and Beijing
The highlight of the growing China-Pakistan collaboration at the BRI forum was the signing of the Mainline-1/ML-1 project worth USD 7 billion aiming to connect the Northwest city of Peshawar to the Southern port city of Karachi by establishing a 2,600-kilometer track. The project is expected to take 16 years to complete, and estimates that it would increase the line capacity of trains going from 34 per day to 134 with a speed twice as fast at 165 kilometres per hour. Secretary to Pakistan’s Ministry of Railway Syed Mazhar Ali Shah stated that the project would transform the Pakistan transportation network and they would increase the railways market share from 2 per cent to 40 per cent while creating employment opportunities for 20,000 jobs.
Kakar on Debt Traps
Kakar dismissed the allegations that participation in BRI has led several countries to “Debt Trap” and stated that the Chinese model of development financing is without any conditionalities and is entirely different from any other traditional financial models of development. He vehemently opposed the claims that BRI financing leads to debt traps on the contrary he stated the vitality of BRI by calling it an “essential tool” to help countries, “in achieving comprehensive and inclusive development of their peoples.”
Syed Irfan Raza, Amin Ahmed, “Pakistan, China commit to broaden CPEC horizons,” Dawn, 19 October 2023
“Pakistan completes projects worth $25b under CPEC,” The Express Tribune, 19 October 2023
“CPEC projects worth $25bn completed: PM,” Business Recorder, 19 October 2023
Ayaz Gul, “China, Pakistan Sign BRI-Funded Railway Project Deal,” VOA, 18 October 2023
“China-funded airport in Pakistan to facilitate regional connectivity,” Xinhua, 18 October 2023