Shadowed optimism

Pakistan’s Prime Minister (PM) Shehbaz Sharif was in China early this month on a five-day visit, primarily to hasten an upgrade of the China-Pakistan Economic Corridor (CPEC) initiative and renew Pakistan’s request to Chinese companies to invest in Pakistan, which is currently under severe financial strain. In a significant meeting with President Xi Jinping, the two leaders discussed various dimensions of the Pakistan-China relationship, reaffirming their longstanding ties, all-weather strategic cooperation, economic and trade links, and, of course, the issue of CPEC. A joint communique issued at the end of the visit claimed that they mutually decided to enhance economic cooperation through the timely completion of ongoing CPEC initiatives as it enters the next phase with five new corridors, namely the growth corridor, economic development projects’ corridor, innovation corridor, green corridor, and regional connectivity corridor.

PM Sharif outlined that Pakistan would continue to work with China to promote regional connectivity and economic development to make Gwadar a connectivity hub for the socio-economic development of Pakistan. This was duly highlighted on social media as well. President Xi Jinping also promised to extend financial support through investment in different sectors and reassured Pakistan that China would continue supporting Pakistan’s sovereignty, territorial integrity, and development and extend support in harnessing geo-economic potential as a hub of regional trade and economics.

Crucially, the just-concluded China trip produced 23 Memorandums of Understanding (MoUs) and agreements aiming at deepening cooperation in technology, transport, industry, infrastructure, energy, agriculture, media, health, water, and socio-economic development. However, it is still unclear what these MoUs will materialise into or if they will propel the corridor project into its second phase for its monetisation to help Islamabad pay back its debt. This is very critical.

It may also be underscored that as Islamabad is negotiating a tough bailout with the International Monetary Fund (IMF) to rescue its economy from the crisis, the beleaguered Shehbaz Sharif government is looking desperately towards Beijing and the Gulf countries for investments in Pakistan to improve its economy. The revival of official and private Chinese investments under the multi-billion-dollar corridor initiative, which has suffered a slump in recent years because of Pakistan’s political, economic, and security problems, is also expected to uplift economic growth. However, as of now, it looks far-fetched.

It may also be recapitulated that under the CPEC initiative, launched in 2015 and dubbed a `game-changer’ for Pakistan’s economy, China has invested USD 25.4 billion in various transport, energy, and infrastructure projects. Several other projects worth billions of dollars are in different stages of planning or execution. The CPEC initiative is also considered a flagship project of China’s ambitious Belt and Road Initiative (BRI), a network of roads, bridges, and ports spread across nearly 100 countries that Beijing hopes will recreate the ancient Silk Road trade routes linking Europe and Asia. The project is also seen to have helped Pakistan improve its power and transport infrastructure.

In spite of the Chinese government’s desire to further boost trade and investment cooperation with Pakistan, many analysts believe that Chinese investors remain hesitant to venture into Pakistan due to diverse issues such as poor governance, bureaucratic red tape, and intermittent violent terror attacks targeting Chinese technocrats. The security of Chinese workers in Pakistan remains the most pressing concern for Beijing amid increasing attacks on them and their interests. The last two attacks occurred between March 20 and 26 this year. The first was by an armed group at the new port in Gwadar. Subsequently, Tehreek-e-Taliban Pakistan (TTP) cadres targeted Chinese engineers working on a Chinese-funded hydropower project near Besham and killed five Chinese workers. There have also been reports suggesting Beijing has demanded a massive counterterrorism operation to eliminate threats to its interests. The Besham terror assault triggered a strong response from Beijing. Meanwhile, China has asked Pakistan for effective measures to protect the safety and security of Chinese nationals, institutions, and their projects in Pakistan.

Furthermore, the Chinese have long been complaining about their projects being impeded by bureaucracy, and many are frustrated by the difficulties of getting things done. Delays in arrears payments of USD 1.8 billion that the government owes Chinese power producers are also deterring other firms from investing in Pakistan. Chinese media also quoted experts as saying that counterterrorism and safeguarding the security of the CPEC were the main focus of Sharif’s visit. Every speech PM Shehbaz Sharif made during his China visit centred around reassurance of foolproof security, which is, of course, hard to implement on the ground. While the PM’s visit is expected to enhance mutual trust between the two countries to tackle the challenges facing bilateral ties, expand cooperation models under the new security concept, and provide strong support for the CPEC, many argue that in reality, Pakistan needs to rationalise its exaggerated expectations from its all-weather ally and consider hard ground realities.

The writer is a retired IPS officer, Adviser NatStrat, and a former National Security Advisor in Mauritius. Views expressed are personal