Is Pakistan the next Sri Lanka of the Belt and Road Initiative?

July 31, 2018

 

The Belt and Road Initiative (BRI) is considered to be the largest overseas investment project undertaken by a single country. It covers more than 68 countries, and 40% of the global GDP. Recently, it has been receiving flak for deploying conditional investments and loans that resulted in land and resource grabbing in Asia and Africa. Most notable of which is Sri Lanka’s failure to repay debt services of the $1.1B Hambantota Port that forced them to rent it out to China for 99 years. Are we seeing Pakistan go down the same road?

 

A key component of the BRI is the China-Pakistan Economic Corridor (CPEC). It consists of 21,690 MW of hydro, coal, nuclear and solar power projects, establishment of several economic zones, upgrading the Gawadar sea port, the Gawadar International Airport, the construction of the CPEC new route which will be replacing the sea route across the Strait of Malacca.

 

In addition, the Asian Infrastructure Investment Bank has entered into a co-financing agreement with the Asian Development Bank to build part of the M4 Highway starting from Shorkot to Khanewal in Pakistan’s Punjab province – one of the key infrastructure projects in CPEC.  CSOs have already raised lack of compensation and displacement in the construction of the highway.

 

Today, $969 million Pakistan’s FDI inflows or around 70% during the last six months of 2017 came from China. CPEC becomes a critical project for both governments.

 

The Gawadar (Baluchistan) port is one of the largest MOU signed under CPEC amounting to $62 billion infrastructure and energy project or roughly 20% of Pakistan’s annual GDP. Despite most of the CPEC loans and investments being in government-to-government transactions, China Overseas Ports Holding Company (COPHC) has been given the contract of running the Gwadar Port, granting it 40 years of lease and control.

 

Gwadar suffers from extreme shortage of water and electricity since rain is scarce. According to officials, only 400 tankers supply water to the city. Riddled with dysfunctional dams, a single tanker costs Rs 17,000 ($147) or Rs 6 per gallon more than bottled water. With initiation of CPEC, a small-sized desalination plant was installed at the Gwadar port, which provides 254,000 gallons of water.

 

As the project continues, this need and shortage become more stark as this plant supplies mostly to Chinese and Pakistani businesses in the area, not the locals.

 

Also noteworthy, is the growing sentiment of the Baloch separatist movement from the lack of the locals’ participation in decision-making in CPEC projects. CPEC and COPHC are reluctant, if not refusing, to employ locals in the ports and giving them access to services it provides. The government ruled in favor of CPEC companies too in the few cases filed by locals against CPEC project holders.

 

Community action research and local dialogues should be made to address this gap. In the context of a rising pro-independence Baloch movement, China’s investments through CPEC can only be viewed as activities sponsoring  land and resource grabs. With Gwadar people’s dire conditions and the Pakistani state’s record of human rights violations, this is potentially more aggressive than the case of Sri Lanka.

 

For inquiries, contact Peoples Coalition for Food Sovereignty (PCFS) / CPDE Rural Secretariat thru secretariat.foodsov@gmail.com

 

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