CPEC Authority disbanded with infighting and controversy: "Ask the Chinese if you don’t trust us"

CPEC China Pakistan

The Sharif government in the third week of the current month decided in principle to scrap the China-Pakistan Economic Corridor (CPEC) Authority terming it ‘redundant’ and ‘obstructive’.

It has decided to revert to the earlier arrangement of routing CPEC projects through the planning ministry to line ministries for execution for revitalising the country’s biggest, most prestigious bilateral economic development project.

The implementation of the decision (Repealing CPEC Authority Act), however, was made conditional to Chinese consent. Talking to this scribe over the phone, Federal Minister for Planning, Development and Reforms Ehsan Iqbal said that he had multiple interactions with Chinese officials since the cabinet decision and they seemed perfectly indifferent over structural settings on Pakistan’s side as long contractual commitments are honoured and the work on CPEC projects is accelerated.

“Chinese friends say they are happy to see our actions and the new momentum. They are not interested in details of how we implement CPEC. In their opinion that’s Pakistan’s internal issue,” he responded in writing.

The debate over the disbanding of the CPEC Authority largely depends on which side of the political fence one is sitting on

“We are going back to the 2013-18 model of CPEC implementation which brought in investments worth $29 billion. Since the authority was created, not a single dollar worth of new investment has flowed in. Only projects in the pipeline continue but at a slower than anticipated speed. The CPEC Authority was a non-starter and proved to be a failure,” he added.

Rubbishing the perception of second thoughts in the government over CPEC and its worth, he vowed to silence elements trying to peddle a false narrative by delivering on the CPEC promise.

“Disbanding the CPEC Authority is pro-CPEC because the authority blocked progress by adding a new bureaucratic layer. All the good work on the CPEC happened before the authority was created. All it did was to stall the CPEC,” he wrote.

A high-placed source, who sat in the Senate Committee on CPEC and saw developments over the past decade from close quarters, took strong exception. Without getting into the details of the motivations for the creation of the CPEC Authority in 2019, he considered its scrapping ill-timed, ill-advised and based on weak logic.

“How can a one-stop shop that resolves all issues pertaining to CPEC projects be a bad idea, especially in the second phase where a higher robust engagement of Chinese private companies in multiple sectors is expected?” he asked. “Can lethargic ministries and sub-federating units with their own set of problems be assumed to be more effective in dealing with investors?” he mocked.

“Before anything else it’s personal. Honestly, it’s sad to see the nation’s interests compromised to service the egos of political pigmies. How else can you explain channelising energy in cancelling instead of building on at the current critical juncture?” he said narrating instances of PML-N’s opposition at every step of the way in the National Assembly and the Senate.

Another senior source familiar with CPEC affairs shared his insight. “Initially even PTI legislators were reluctant to support CPEC Authority as it was seen as a move by the deeper establishment to assume the charge of the flagship Chinese One Belt One Road initiative.

The resistance dissolved as the Chinese threw their weight behind such a platform.

The impression of the CPEC slowdown under former prime minister Imran Khan’s government is hard to contest. Some experts attributed it more to the pandemic that paralysed the world. Others did blame the last government that took too much time to digest the value and the politics surrounding CPEC after assuming power.

“Some faint light started flickering on the CPEC playboard after the induction of a top business executive as a special assistant to the prime minister in 2021," ,” an informed source active in CPEC circles observed.

"A nice pitchbook to lure private Chinese investors was developed and contact channels were opened to mend the ties. Just when things finally started looking up the regime change happened and things came to nought once again."

“Ask the Chinese if you don’t trust us. Check the Chinese media which made its displeasure public even during Imran Khan’s tenure. They were upset over the statements of government ministers casting aspersions on the transparency of CPEC deals.

They were uncomfortable with changes in the taxation regime, frustrated over delays in payments to power producers and opening of a revolving account and resented any further talks on sealed deals,” a senior officer in the Ministry of Planning said discussing the issue.

“The authority was established to locate new drivers of growth and unlock the potential of value chains through regional and global connectivity. The efforts of the authority mobilised $1.5bn investment by medium-sized Chinese companies in Pakistan collectively.

It got the cabinet approval of compliance in place of the approval regime for Chinese investors who were required to acquire 37 no-objection certificates for investment in Pakistan.

“A research publication of the authority projected competitive and comparative edge in seven key sectors including IT, textiles, footwear, agriculture, auto, pharma and furniture,” says a supporter of the CPEC Authority defending its performance.

"It engaged 19 top Chinese firms with a potential collective investment of whooping $30bn in Pakistan."

Earlier Ehsan Iqbal reminded us that Special Economic Zones were supposed to be ready by 2020 and held former prime minister Khan’s government for the neglect and lack of progress.

Afshan Subohi is a regular contributor to The Dawn.

Guest Contributor

This piece was written for Greek City Times by a Guest Contributor