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CPEC plan details still awaited

Khurram HusainDecember 21, 2017

The writer is a member of staff.

THE Long Term Plan for CPEC ‘launched’ by the government on Monday is, as feared, only an abridged, abbreviated, and heavily edited version of the longer document upon which it is based. Nevertheless, for now this will do. More transparency is required in the CPEC enterprise, because people need to understand that it is far bigger than roads, power plants and transit trade. Those elements have been hyped up by our government for its own reasons, but they do not define the enterprise.

This is a good time to ask the government ✔why there is such a visceral reaction every time questions are asked about CPEC, and specifically why there was such a visceral reaction to the Dawn report on the LTP back in May. The question is simple🔴: please identify a single discrepancy between the LTP officially released by the government on Monday, and what was published in the Dawn story back in May.

That story was based on the longer version of the LTP document prepared by the China Development Bank and the National Development Reform Commission of China. In terms of the broad “areas of cooperation” identified in both documents, there is no difference. ✔Both versions talk about facilitating the entry of Chinese capital into Pakistan. ✔Both talk about developing tourist resorts, with the locations identified being the same. ✔Both documents talk about the extensive financial cooperation between both countries, with special focus on expanding the role of the yuan within Pakistan’s economy, for settlement of bilateral trade and as a reserve asset, as well as raising debt in yuan-denominated bonds by federal, provincial and municipal governments.

The longer version contains details that take most people by surprise, simply because people don’t know that the CPEC enterprise goes as far and as deep as the LTP lays out. The shorter version, released by the government on Monday, provides only abbreviated pointers, general statements that speak in brushstrokes alone, about where things are supposed to go in the future.

🌐This is a good time to ask the government why there is such a visceral reaction every time questions are asked about CPEC?

A close reading of the 26 pages of the LTP released by the government is enough to establish this. When the plan says, for example, that Pakistan will “encourage Chinese enterprises, private sectors and private sector funds of other economic entities to make various forms of direct investment”, it is worthwhile to bear in mind that there is a massive, heavily worked out, reality behind these seemingly simple words.

Those details, of what ‘encourage’ means, and where all this investment will come and in what sectors, are contained in the longer version of the LTP, that the government will not release.

It goes on. On the financial side, the document contains sentences such as “[e]ffective ways shall be explored for Pakistan’s federal and provincial governments, enterprises and financial institutions to conduct RMB financing in Mainland China, Hong Kong and other offshore RMB centres”.

Translation: ✔expect to hear more about provincial governments floating RMB bonds in Hong Kong, if they want to foot the bill for the projects they are asking for.

Here’s another: “Both countries shall promote the mutual opening of their financial sector and the establishment of financial institutions in each other; encourage financial institutions of the two countries to support the financing, including the loans from international consortium of banks, for the projects along the CPEC; establish and improve a cross-border credit system, and promote financial services such as export credit, project financing, syndicated loan, trade finance, investment bank, cross-border RMB business, financial market, assets management, e-bank, and financial lease; support the project financing by RMB loans, and establish the evaluation model of power bill in RMB.”

There is nothing wrong with any of this, but it certainly points towards a growing role for the RMB in our economy, quite aside from the fact that exactly this sort of thing is detailed in the longer version upon which the Dawn story was based, which the government is trying to tell us is “incorrect”.

What exactly was ‘incorrect’ here? This was the document developed within the JCC framework, and finalised at the sixth JCC meeting for forwarding to the respective governments for all internal reviews prior to finalisation. If it changed in substantial form between then and the actual finalisation, please tell us where, because the abbreviated and abridged version released on Monday points in exactly the same directions as those contained within the document upon which the Dawn story was based.

The other thing that is difficult to understand about this discourse is why simply publishing the details of the plan should be considered as stoking controversy. ✔First of all, the details of the LTP are different from the details of CPEC as presented by the government, so it is natural that they will attract journalistic attention.

✔Second, there is nothing ‘unnecessary’ about any ensuing controversies, given that the government itself describes CPEC as a ‘game-changing’ endeavour. Any agreement that is going to be ‘game changing’ will necessarily need to be scrutinised, debated and discussed, and in the course of this exercise, there will necessarily be divergent points of view that will need to engage with each other.

✔Third, why should the conversation that ensues from a disclosure of the details of the LTP be described as a ‘controversy’? Since people have been misled into thinking that CPEC is about nothing more than China building power plants and roads in Pakistan as preparation for eventual long-distance transit trade, naturally there will be surprise when they learn that the enterprise is, in reality, about something very different.

In reality, CPEC is about allowing Chinese enterprises to assume dominant positions in all dynamic sectors of Pakistan’s economy, as well as a ‘strategic’ direction that is often hinted at but never fleshed out in the JCC meetings and the LTP. All else is distraction. The LTP put out by the government on Monday is enough to discern this.

The writer is a member of staff.

Twitter: @khurramhusain


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