CPEC: Debunking the naysayers | China-Pakistan Economic Corridor (CPEC)

CPEC: Debunking the naysayers

Category : Opinion Editorial   Source : The Express Tribune   Date : 09-09-2017   By : Dr. Haroon Rasheed 

Recently, a WhatsApp message based on a write-up that created ambiguities about CPEC in Pakistan went viral. It claimed that it was game over for CPEC. For a better understanding of the project, here are some counter-arguments to the concerns raised.

The writer is director of the CPEC Centre at the University of Management and Technology, Lahore and is former foreign expert at National Science Foundation of the People's Republic of China

1) 91% of the income from Gwadar port will go to China and only 9% will come to Pakistan: Developing and running a port needs a huge investment along with a number of liabilities. Hence, if from the net income Pakistan gets around 10% without having spent a single penny, it’s great indeed.

2) Chinese companies will get preferential treatment and tax exemptions: No long-term CPEC plans have been disclosed yet. Only the projects including power and infrastructure were given tax rebates mainly because we are suffering from chronic power shortages. On the other hand, it will result in reducing the cost of construction of these projects, which will result in lower tariffs on electricity.

3) Money for the road network comes from Pakistan and hence, we are paying for the roads which will be used by China to export their products: Firstly, the roads built under CPEC will remain Pakistan’s property through the National Highway Authority and will generate revenue from toll taxes. Secondly, Chinese companies will build these roads with money pouring in from China on a concessionary rate which is in Pakistan’s favour.

4) We will have to repay the loans taken for the energy project: Out of initial $46 billion, $30 billion is for energy projects. Respective Chinese companies of each and every power project will be responsible for financing and repayment issues. Pakistan will buy the electricity that will be supplied for both commercial and domestic use. No loan has been taken by the government for any energy or power project. On the other hand, Chinese companies investing in power projects will receive repayment for their investment and there is nothing wrong in that.

5) There is no guaranteed profit: Considering that the circular debt in Pakistan is huge, will you install a 1kw power generator for the government at your own expenses? The answer is no. In that case, if China is going to resolve one of Pakistan’s mega problems, why do we want to ruin it by making false arguments?

6) India is buying solar electricity for four cents/kWh, while we will buy coal-based electricity for eight cents/kWh: First of all, one can’t compare coal prices with solar prices. Secondly, India is already producing 59% coal-based electricity and before CPEC, share of coal in our energy mix is only 2%. Moreover, solar-based electricity can only be used till noon and industries can’t stop functioning after that.

7) Pakistan’s ‘East India Company’: When the East India Company invaded the Asian subcontinent, its main motive was money. China’s GDP is the second best in the world and where do we stand in terms of GDP, nowhere. So why would they colonise Pakistan?

Lastly, CPEC will not bring automatic prosperity for Pakistan. If we want economic prosperity and development, we will have to devise our path ourselves. CPEC will provide an opportunity for everyone. Believing in Pakistan is the only way forward.