Learning from Pakistan: A financial trap, Part 2 PDF Print E-mail
Wednesday, 24 May 2017 15:30




The report appearing in The Globe and Mail newspaper raised new questions in Pakistan about the real costs of doing business with China. Some countries have expressed concern that the One Belt, One Road project leans too heavily in China’s favor.

“Tenders need to be open to everyone,” German Economy Minister Brigitte Zypries said, warning that Germany could not sign on if that condition wasn’t met. European news reported that European Union countries have made good on the threat, refusing to sign one of China’s proposed One Belt, One Road joint statements on trade.

India, the report said, which opposes Chinese construction in regions whose ownership it disputes with Pakistan, “skipped China’s One Belt, One Road summit altogether, instead cautioning countries that accept Chinese funds risk taking on an unsustainable debt burden.”

The document, the newspaper alleged, details how Pakistan would be divided into geographic zones according to the industries that could prosper there, including gold, diamonds, and other minerals in the west and northwest, cement in the center and petrochemicals, iron and steel in the south.

The Xinjiang Production and Construction Corp., a quasi-military group in western China, could be used to overhaul agriculture in Pakistan by bringing mechanization and new methods of irrigation and breeding. At least some of that would be enabled by leasing large tracts of agricultural land to Chinese interests and allowing Chinese-invested companies to build fertilizer factories and storage facilities, the report said.

In textile, Pakistan’s cheap raw materials can be used to build up China’s own garments industry (where’s your shirt made?) and help soak up surplus labor forces in Kashgar, a city in China’s far western Xinjiang region.

The report said that installation of a fiber-optic connection from China would be used to bring high-definition television, but also become a “cultural transmission carrier” to present a friendly face of China with future cooperation between Chinese and Pakistani media.

The Beijing planners also propose a “safe cities” project that would have Pakistan’s urban centers adopt some of the surveillance architecture common in China by installing video cameras to monitor major roads, case-prone areas and crowded places.

What the document makes clear, the article said, is that what China wants in Pakistan goes far beyond just economics. Although the plan was drafted in 2015, it circulated only inside Pakistan’s federal government and the Punjab provincial government. Other provinces were sent a less-detailed, 30-page version.

But many Pakistanis remain ardent supporters of the One Belt, One Road concept, one among them is Prime Minister Nawaz Sharif, who allegedly said that Pakistan stands at the cusp of a geo-economic revolution. “In fact, this is the dawn of a truly new era of synergetic intercontinental cooperation,” he said.

Senator Mashhadi, who chairs Pakistan’s Planning Development and Reform Committee, acknowledges that with Chinese spending, “we will get better infrastructure. We will get more development in our country. We will become the center of trade.”

But he cautioned that there is “hardly any free lunch involved,” and if Pakistan is not careful, it may end up giving away too much. He concluded as the newspaper reports: “There’s no use having motorways with Cadillacs flying down while your people are standing on the roadside with their goats and a cow and watching everything go by. That is not what we want.”

So, the question for the Philippines arises: how do we repay China’s goodness? Give away Scarborough Shoal and part of South China Sea ruled as ours by the international arbitrary court? And what else?