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Addressing a session on the China Pakistan Economic Corridor (CPEC) during the 2nd day of Pakistan Capital Investment Summit & Expo 2018, Deputy Chairman Planning Commission Sartaj Aziz stated that the CPEC is not about roads and infrastructure but about people connectivity to ensure a brighter future for not only the region but the entire world. The CPEC is not against any country, he added, clearly addressing the Indian concerns, but is for peace and prosperity for all countries. Aziz lauded Chinese President Xi Jinping's One Belt One Road (OBOR) concept - of which the CPEC is a component - that envisages connecting policies, peoples and intellectuals and stated Pakistan is proud that the CPEC is far ahead of other countries in terms of achieving progress within the overall framework of OBOR.

Sadly Aziz for all his relevant qualifications and experience is not spearheading CPEC projects in spite of his recent appointment as Deputy Chairman Planning Commission as that role remains with Ahsan Iqbal who currently holds two very challenging and key ministries notably the Ministry for Planning, Development and Reforms as well as the Ministry of Interior. Perhaps Aziz is simply not familiar with serious concerns with respect to CPEC projects by the three smaller provinces, opposition members of parliament, economists, local industrialists as well as international donor agencies. Sindh, Khyber Pakhtunkhwa and Balochistan have challenged the priority accorded to the CPEC projects in Punjab; opposition members of parliament have expressed concerns over persistent failure on the part of the government of Pakistan in general and Ahsan Iqbal in particular, to provide details of CPEC projects, including their source of financing, ie, a loan or an investment and if a loan at what rate of return. International donor agencies attributing the massive rise in capital imports from China as one of the reasons behind foreign exchange reserves of less than three months today as well as a widening trade deficit.

International Monetary Fund (IMF) has cautioned that CPEC projects would imply an outflow of 4.5 billion dollars by 2024. In Article IV Consultations report dated July 2017 the Fund notes that "over the medium-term, the current account deficit is expected to peak at 3.4 percent of GDP in 2019 as CPEC-related imports gather steam, and could subsequently moderate as exports recover, supported by the elimination of supply-side bottlenecks and the implementation of business climate reforms. Pakistan will face increasing government and CPEC-related external repayment obligations, and external financing needs are projected to increase to nearly 71/2 percent of GDP over the medium-term, highlighting the need for macroeconomic and structural policies supporting competitiveness." The Abbasi administration has attempted through fiscal incentives to enable exports to recover, however, the trade deficit is continuing to widen, and the business improvement plan formulated during the three-year IMF programme (2013-2016) was drafted but never implemented.

It is indeed unfortunate and most disturbing that the determined reluctance of the federal government to proactively engage with the media on the CPEC is generating misconceptions and concerns about the historical enterprise that in fact has all the portents of a game changer for the country.

Copyright Business Recorder, 2018


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