|By Lt. General P.C. Katoch (Retd)
Former Director General of Information Systems, Indian Army
First signs of hiccups in the nearly $60 billion China-Pakistan Economic Corridor, inked during Chinese President Xi Jinping's visit to Pakistan in April 2015, came when Pakistan cancelled the $14 billion Diamer-Bhasha Dam project citing financing terms imposed by China as the reason. Muzammil Hussain, chairman of Pakistan's Water and Power Development Authority (WAPDA) told the Public Accounts Committee (PAC) of Parliament that the Chinese company involved in the project there had imposed very difficult financing conditions, which included pledging the new dam, as well as an existing dam, as loan security, adding, "Chinese conditions for financing the Diamer-Bhasha Dam were not doable and against our interests". Simultaneously, Nepal and Myanmar also canceled or sidelined major hydroelectricity projects planned by Chinese companies. Nepal's Deputy Prime Minister recently announced a decision to scrap a $2.5 billion contract for a hydroelectricity project, accusing the Chinese company of financial irregularities. And Myanmar, which halted a $3.6 billion Chinese-backed dam three years ago, declared last month that it no longer is interested in big hydro-electric power projects.
Then came the news of China putting on hold number of road, mass-transit and industrial zone projects in the CPEC, these being:
Reports from Pakistani TV also indicate that China has delayed funding for the Karachi Circular Railway and some industrial zones projects, asking Pakistan to take commercial loans from Chinese investment banks if it wants early completion of these projects. Apparently, the differences appeared during a Joint Pakistan-China Working Group on November 20 where the Chinese side: tabled fresh guidelines for funding CPEC projects; suggested review of CPEC for pursuing only highest priority projects, sidelining projects that would generate less economic activity. Though Pakistan government denies all this, media reports confirm the free industrial zone in Hattar, Khyber Pakhtunwala (KPK) has been abandoned by China. Local investors feel cheated with plots bought in the proposed industrial zone on behest of the Pakistani government. The hiccups in China's Bellt and Road Initiative (BRI), of which the CPEC is the flagship project is being watched world over. But these are temporary even as some associated projects, like in KPK, may be shelved temporarily or even permanently. The economic-cum-strategic aggression by China is akin to an undetected intestinal cancer that is growing constantly. The more it spreads, the more China will take the stranglehold of internal politics of the concerned country. With the change of government in Nepal, we may see the revival of the hydro-electric project with some tweaking. Similar may be the case with Myanmar which has been pushed to China with the Rohingya crisis.
As for Pakistan, China holds it by the jugular, with the Pakistani military that rules the country in its pocket. What other evidence is required beyond the PLA establishing a military base in Skardu some 23 km from Kargil. Already PLA troops in civil attire are guarding the CPEC (being referred to as 'highway' by locals) in civilian vehicles. There are also reports that Pakistan may permit China to establish another military base in North Waziristan. Though Pakistan has leased Gilgit-Baltistan and Gwadar to China for 50 and 49 years respectively, the Chinese are apparently worked up because Pakistan allotted all the plots surrounding Gwadar port to investors from Saudi Arabia and Qatar. Pakistan is unlikely to find another investor for the Diamer-Bhasha Dam, its efforts to obtain a World Bank loan having failed. China may still get the project at later date. The present rejection of China's investment in this project is perhaps because of public awareness about 91% profits from Gwadar going to China, despite Pakistani government efforts to keep it under wraps. The instability in Baluchistan was already known to China, and it had no compunctions in assisting Pakistan in enlarging genocide against the Baluch population, even gifting Pakistan attack helicopters.
But despite this, the violence in Baluhcistan has gone up with hits against Pakistani security forces every second day. This is perhaps a reason of the Pakistani military's abject surrender to Islamists through the November 26, 2017 six-point agreement between the Faizabad protestors and the government (read military, because it was on the military's behest). How long the military can pacify the Islamists with China's continued suppression of Muslims in Xinjiang is anybody's guess. Within Pakistan, the Tehreek-i-Pakistan (TTP) appears to be gaining ground – perhaps the reason why China abandoned investments in KKH. With French and Algerian ISIS cadres from Syria confirmed fighting in Afghanistan, hundreds of ISIS cadres may be veering towards Af-Pak, some linking up with Al Qaeda and TTP joining hands with both. An interesting development has come from the US indicating Pakistan could lose control of its territory if it does not sever its ties with Haqqanis and other terrorists; Rex Tillerson, US Secretary of State has said militants who were focusing on Kabul might one day decide that Islamabad was a better target. Pakistan perhaps still does not realize that the CPEC, Gwadar, PLA bases in Skardu and Waziristan (under consideration) all have drawn it into the middle of the Indo-Pacific Great Game as also Middle East geopolitics. Being China's strategic highway to the Indian Ocean, the CPEC will stay albeit the violence will continue that may even grow exponentially, perhaps drawing in more PLA deployment. China has cautioned its nationals in Pakistan against abduction and violence. But once Islamists clash with PLA / Chinese, events may take a different turn. Significantly, China's efforts to project the BRI as panacea for the world faced serious setback recently at the UN, when a coalition led by India and the US pushed back and forced Beijing to retreat. China didn't want to answer questions on transparency and environmental standards, simply because China doesn't have any. Eventually on December 11, 2017, the UN General Assembly adopted two resolutions 'minus' the language used in 2016 that had essentially equated world peace with promoting China's BRI.