The PTI team first China trip is in continuity of firm long term bilateral relationship. There is no ambiguity that joint statement released on 4th Nov is very encouraging and covering development of broad counters of all kind of strategic, economic, security, social and cultural linkages.
The expectations at home, are however, more entrenched on short term balance of payment support which were built by PTI government. And the market was expecting something similar to what we are getting from Saudi Arab. It’s a reality check for PTI government to manage Pak China relationship beyond the scope of short term commitments.
The message between the lines for PTI team is that they are not in opposition anymore and should let it go on what was done in the previous regime. The due and undue criticism of CPEC by Imran and team even after assuming power was not called for. How can government expect China to bail out the country while being critical on what your all weathered friend has done in the last couple of years?
That is an easier part; and probably there will be no such statement for PTI economic and political team in future. The harder part is to build capacity at home to extract maximum juice from the long term pledges China is making to Pakistan.
The reality is that Pakistan government and economic machinery is not geared up for long term negotiations for multifaceted help and China is extended towards Pakistan. For instance, the FTA with China was signed in 200x which was unidirectional favouring Chinese industries with nothing much for Pakistan exports. The question is why we signed something which was not in our favour.
The other example is in the first phase of CPEC, the concentration was in power projects. But concurrently, government initiated its three projects on RLNG, outside the scope. Why to have too many power projects without adequately working on the transmission and distribution inefficiencies.
Similarly criticism is due on including orange line into CPEC. Why such a cost heavy project for a consumers in one city whereas the Pakistan railways operations are in shambles. The point is we need to bring our house in order by setting up priorities and building capacity at requisite government departments.
Else, like in past, it may remain hotchpotch. The Chinese are cognizant of the fact, and some responsibility lies on them as the lender to extend loans and investment in projects are viable and are not redundant. The way western multilaterals and bilateral in past and even today work closely with Pakistan team, China might has to do with increasing Chinese interest in Pakistan development.
However, that is not an ideal situation; as no one but Pakistan herself can look for country’s best interest. It’s high time for Imran to realize and work on developing capacity in key economic institutions. The one reason, ministry of finance wanting to be in an IMF programme is that DMG officers sitting there do not have capabilities to plan and execute the country’s finance affairs. And since they are not willing to let go their power, the private sector technocrats are not welcomed at Q block.
Now, with second round of CPEC, the imperative is to find what right industries Pakistan should host which are becoming uncompetitive in China in SEZs. How to design framework for partnering Chinese companies with Pakistan private sector with an objective to have technology spill over and building skill set in Pakistani labour force.
Similarly, we may need to do rounds of meetings for renegotiation of FTA with China. It’s a learning process and there is a fair chance that FTA to be renegotiated with focus on increasing Pakistan exports to China by the end of the calendar year.
To end at an optimistic note, the China help is usually silent. The country has already given $2 billion in FY19 so far for balance of payment support.
The buzz is that the package is in the making and probably will surface before the country’s negotiation with IMF culminates.
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