Amidst much fanfare and in the presence of Pakistan's civilian and military leadership, including Prime Minister Nawaz Sharif and General Raheel Sharif, as well as Chinese Ambassador Sun Weidong deep sea Gwadar port linked to Kashgar as a component of the China Pakistan Economic Corridor (CPEC) was inaugurated with the berthing of Cosco Wellington loaded with 150 containers. The 46 billion dollar CPEC is widely regarded as a win-win for the two countries. For China CPEC is a critical component of President Xi Jinping's vision of one belt one road, viewed as the largest most ambitious programme of economic diplomacy in current times that is comparable to the US-led Marshall Plan for post-World War reconstruction of Europe as it would provide China with trade links to the sub-continent, Europe, the Horn of Africa, and Arab countries.
For Pakistan, the quantum of foreign investment CPEC represents is comparable to the foreign direct investment this country has received in its entire history and therefore has prompted all political parties to acknowledge that the corridor, when completed, would be a game changer. In this context, one must appreciate the efforts of not only the incumbent government for bringing CPEC to the implementation stage but also the former Zardari-led PPP government that was, throughout its five-year tenure (2008-13), visibly engaged in discussions with the Chinese government that finally culminated in the memoranda of understanding signed with Pakistan in 2015 when President Xi Jinping visited Islamabad.
At present, Pakistan's economy is heavily reliant on external funding - concessional bilateral and multilateral support, borrowing from the external commercial banking sector at high rates and short amortisation period as well as issuance of Eurobonds/sukuk at rates above the global market rate - for budgetary support and for implementation of development projects. Unfortunately, however, foreign direct investment in this country remains abysmally low, apart from a recent small rise attributed to CPEC as it enters its implementation stage. Thus, given the lack of interest of the rest of the world in investing in Pakistan, the Chinese offer was not only historically the best offer of investment Pakistan has ever received from a foreign country but also the best offer in the present circumstances given the security and inadequate energy concerns of other foreign investors.
Prime Minister Nawaz Sharif in his inaugural speech restated the government's narrative on the CPEC namely those opposed to it are the enemies of the country. There is little doubt that India continues to oppose the project, an opposition that no one in Pakistan would hesitate to dismiss as grapes are sour, however, there is also, reportedly, considerable concern in some Western capitals that the CPEC would negatively impact on their leverage with Islamabad. It is therefore important for the Pakistan government to continue to engage with other capitals to ease their genuine concerns and at the same time to ensure that economic considerations would not be held hostage to their relations.
Unfortunately, though there is considerable internal criticism on the ongoing construction of CPEC's road route with opposition political parties as well as the Khyber Pakhtunkhwa government maintaining that the western route, that would link underdeveloped but mineral-rich regions of KPK with the rest of the country thereby fuelling national growth, are not being constructed at least in the first phase of the CPEC to the detriment of the national economy. In this context, it is imperative for the government to bridge the trust deficit with opposition parties through continued engagement and try to ensure that the entire country speaks with one voice insofar as the criticality of CPEC for the economic development of the country is concerned.
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