«The United States has warned Pakistan of the long-term risks to its economy if it embraces China’s massive infrastructure project and suggested that it should instead look to the US business model,” Alice Wells, the acting assistant secretary of state for South Asia, told a conference on November 21. During her speech, she explained that the $60 billion China-Pakistan Economic Corridor (CPEC) would only profit Beijing.
It is not the first time Pakistan has heard such statements. The US, in pursuit of its hope to contain and curtail China, is crossing its limits and increasing pressures on Pakistan.
US Secretary of State Michael Pompeo passed similar remarks that US money should not be used to pay back Chinese debt against CPEC projects.
The Pakistani government and the Chinese government have both rejected allegations and condemned them severely.
The China-Pakistan Economic Corridor (CPEC) was built thanks to the consensus of all political parties in Pakistan. CPEC framework is a bilateral agreement between China and Pakistan and has nothing to do with any other nation. Pakistan is a sovereign state and is free to cooperate with any country which suits its national interests.
Pakistan was a close US ally during the cold war era and its war on terror. However, after 2011, the US wrote Pakistan off. Pakistan faced isolation from the whole western world. The electricity crisis was so severe that the country was facing a load shedding of up to 8 hours a day in big cities and up to 16 hours a day in rural areas.
In 2013, China announced its plans for BRI and the China-Pakistan Economic Corridor was signed. As a result of CPEC, the people of Pakistan are already reaping the benefits.
Under CPEC’s early harvest projects, Pakistan completed several power generation projects and successfully overcame the severe issue of electricity shortage. Now, the people of Pakistan enjoy full-time electricity, without any load shedding. A network of motorways and highways have been completed, helping to boost the economy and contributing to a two digit growth in GDP.
Early harvest projects were to make a strong foundation for the second phase of CPEC, which will focus on agriculture, industrialization, the social sector, and poverty elimination. China and Pakistan have planned Special Economic Zones for rapid industrialization, and several measures have been taken to boost the agricultural sector.
Pakistan is facing the worst foreign debt crisis it has ever seen, but CPEC related debt is less than 10 percent of its total foreign debt. More than 90 percent of Pakistan’s debt is due to the Paris Club, World Bank, IMF and ADB. On the surface, the debt from countries other than China has a low mark-up, but is laced with stringent terms and conditions. In fact, the US and its allies are using debt as a tool to pressurize Pakistan politically and diplomatically, while China is helping Pakistan rid itself of poverty through strategic loans, connecting the country with the outside world.
The US warning has had the opposite intended effect, bringing Pakistan closer to CPEC and China. China and Pakistan have enjoyed a close friendship over the last seven decades. Such warnings may force us to cement our relations further.
About the author: Zamir Ahmed Awan is a senior fellow with the Center for China and Globalization (CCG) and a sinologist at the National University of Sciences and Technology in Pakistan.