The China-Pakistan Economic Corridor (CPEC), the groundwork for which began during the Pakistan Peoples Party’s tenure, will come under the command of the third government soon enough.
Since its inception, the project has been hailed as the harbinger of economic growth and prosperity — by the civil and the military leadership as well as the mainstream media. The popular opinion has remained reflective of the notion that the project under the Belt and Road Initiative will open new avenues of development for the much impoverished province of the country, Balochistan, where Gwadar, one of the CPEC’s flagship projects, lies.
However, alongside, the debate and disagreement over provinces getting to reap equal benefits out of CPEC have always existed. Recent statistics by the Ministry of Finance and Economic Affairs reveal that the disbursement of over 90 per cent of the funds, received under CPEC, to three major projects falling on the eastern belt of the projects only adds to the scepticism. The projects, Thakot-Havelian Highway, Sukkur-Multan Motorway and Lahore’s Orange Line Train Project, have received 1.6 billion dollars, which is 90 per cent of the total funds disbursed during the last fiscal year of 2017-18.
Similar to the controversial NFC award, with the current fund allocation formula of CPEC, it can be easily ascertained that the smaller and less-developed provinces are unlikely to witness the scale of development like that in Punjab and Sindh. Moreover, with the social sector initiatives receiving a cold response from the parent financing country, China, there will remain a vacuum in the social sector. Hence, the economic advantage will not seep down to the micro level, particularly in the case of rural and less-developed areas.
Most importantly, the burden of the repayment of loans will be unfairly distributed among the provinces, that is, a repayment formula which is disproportionate to the funds received and employed in various projects. With many of the projects still awaiting completion and China supporting Pakistan’s dwindling economic growth via repayable loans and CPEC, much can still be done to spread out the benefits of the project to other provinces.
Published in The Express Tribune, July 25th, 2018.