Contrary to the claims made by Pakistan Prime Minister Nawaz Sharif that China Pakistan Economic Corridor (CPEC) is a game changer for the economy of a country, senior Pakistani Journalist Najam Sethi noted that the project is all about boosting the position of Beijing and its currency.
Presenting his critical review of the project, Sethi said that today China is competing globally to make the Yuan an alternate currency to the Dollar and its One Belt One Road (OBOR), in which CPEC is a project, is to play a major role in this.
Sethi explained that Pakistan is not receiving any foreign investment as it is viewed as a relatively volatile country surrounded by conflict ridden regions.
Islamabad has conflict on border with India, Afghanistan as well Iran but China is ready to risk the instability and invest because of the influence it enjoys over the country.
“Firstly they think Pakistan cannot sustain without China and in terms of the military hardware and protection on Foreign policy especially against India that China provides. (This is something) Pakistan can’t loose,” said Sethi on a Television show on Geo News.
Since, China realises that Pakistan is completely dependent on it for military and national security so, its policy is whatever regime is in power, it will work with them, the journalist noted, adding that this approach in turn makes its investments in CPEC secure irrespective of the fact that who is in power.
Another way of keeping its stronghold on the project, Sethi says is through increasing rates.
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“Second thing is if there is a risk, China then increases its rates. Say a good is sold at 10 paise in the international market but China will sell it at 15 paise saying there is risk involved in investments. Furthermore now that Pakistan has to pay that 15 percent (which it is unable to due to financial restrictions), China will say that ‘ok we will give you a loan now and you will get good investment return on this project and then you can pay back’. In such a situation no Pakistan authority really questions them, that’s why something that is available for 10 paise is being sold at 15 paise,” explained Sethi, adding that China is the supplier as well as the creditor.
“Pakistan has no opportunity for bidding, it takes whatever China provides and in such a scenario transparency does not exists,” he said.
He added that it is also the reason that the financial transactions happening under the CPEC lack transparency.
Earlier, Prime Minister Sharif had said that the multi-billion CPEC project will bring prosperity and development in the country as well as employment opportunities to the youth. To this, the journalist said that it may generate some limited employment but won’t help much with prosperity as the things produced in the industries set up by China would be exported by it which in return would generate profit for Beijing and not Islamabad.
He added that China is also trying to establish the Yuan as an alternative currency to compete with the dollar.
Sethi explained, “China’s export surplus is huge and it is in debt of almost every trader. They have developed their banks on the lines of the World Bank and the Asian Development Bank and have even created their stock exchange. And you never know that the 60 billion worth of deals happening with Pakistan are tied with the Yuan. Then the trading would happen in Yuan instead of the Dollar. This is a very ambitious initiative of China to turn its currency into a global currency.”