Saturday, April 18, 2015

Daily Times Editorial April 19, 2015

Economic corridor Chinese President Xi Jinping is due to visit Pakistan on April 20-21 in his first trip abroad this year and one that was postponed last year thanks to Imran Khan’s sit-in. There is some excitement in the air about the expectations from the trip. Federal Minister for Planning and Development Ahsan Iqbal spelt out why in a media interaction in Islamabad on Friday when he revealed the contours of what has been dubbed the China-Pakistan Economic Corridor. This is a comprehensive plan that includes energy, road and rail infrastructure and other projects. The overall size of the investment package is around $ 50 billion, of which $ 35-37 billion will be for energy, and $ 8-9 billion concessional loans for infrastructure such as roads, ports and railways. The energy projects will be in the hands of local Independent Power Producers (IPPs) and the total output once these projects are completed will be 16,500 MW. Coal power projects (including Thar) will be completed in three years, green energy projects from solar and wind in 6-12 months. These would be commercial transactions, with Chinese firms extending loans to Pakistani partners, and the government inking power purchase agreements with the latter. Ahsan Iqbal pointed out that with the completion of the China-Pakistan Economic Corridor, Pakistan-China economic ties would come at par with the two countries’ geo-political ties. The Chinese lead and example in investing in Pakistan, the minister hoped, would be emulated by investors across the globe. He revealed that the government had wisely decided to upgrade the transmission and distribution lines in order to take the enhanced load. The provinces, he said, would benefit from early harvest projects of 10,400 MW. At least 10 coal-fired projects are planned. Chinese firms would offer concessional loans for infrastructure projects, spread over 15-20 years at low markup, the difference with international interest rates to be made up by the Chinese government to the lenders. Ahsan Iqbal warned that Pakistan must keep pace with the China-Pakistan Economic Corridor plan or it could lose Chinese support and even the planned route. To ensure this, the Khunjerab-Gwadar route must be completed at the earliest. Since the road passes through troubled areas, especially in Balochistan, a special force will be set up by the army to look after the security and safety of the Chinese and local workers on all such projects. This issue should perhaps be viewed in the context of the killing of 20 labourers the other day by insurgents in Turbat. Not only could the Chinese and even local workers come under threat, infrastructure such as roads and railways could fall prey to sabotage activities. The conundrum of Balochistan needs to be tackled politically if such dangers are to be warded off. Such reservations aside, it is beyond question that the China-Pakistan Economic Corridor will be a game changer for Pakistan, the region, and the world. The old Silk Road will be resurrected in the form of a new Silk Road and even a Maritime Silk Road, which will link this region to the world, east and west. In the old Silk Road times, it not only served trade, the route brought disparate civlisations, east and west, closer. In today’s interconnected world, it is expected that these trade and economic cooperation routes will prove transformatory in terms of modernisation. China is our time-tested friend and its rise to eminence has provided us with a golden opportunity to transform our crisis-ridden energy sector, and creaking, old and decrepit infrastructure such as roads, railways, power transmission networks, etc. While the rest of the world has to chase Chinese investment, Pakistan is in the enviable position of the Chinese generously opening their coffers to us and ensuring Pakistan partakes of China’s economic success. For all these reasons, the long awaited and historic visit of Chinese President Xi Jinping is more than welcome.

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