Pakistan, following in the footsteps of Malaysia and Myanmar, is the latest country to balk at the China and infrastructure focus of Beijing’s Belt and Road-related investments.
Preparing for his first visit to China as Pakistan’s prime minister, Imran Khan is insisting that the focus of the China Pakistan Economic Corridor (CPEC), a US$60 billion plus crown jewel of the belt and road initiative route, shift from infrastructure to agriculture, job creation and foreign investment.
“Earlier, the CPEC was only aimed at construction of motorways and highways, but now the prime minister decided that it will be used to support the agriculture sector, create more jobs and attract other foreign countries like Saudi Arabia to invest in the country,” said information minister Fawad Chaudhry.
Mr. Khan’s determination to ensure that more benefits accrue to Pakistan from Chinese investment comes at a time that various Asian and African countries worry that Belt and Road-related investments in infrastructure risk trapping them in debt and forcing them to surrender control of critical national infrastructure, and in some cases media assets.
Preceding Mr. Khan’s move, protests against the forced resettlement of eight Nepali villages persuaded CWE Investment Corporation, a subsidiary of China Three Gorges, to consider pulling out of a 750MW hydropower project.
Malaysia has suspended or cancelled US$26 billion in Chinese-funded projects while Myanmar is negotiating a significant scaling back of a Chinese-funded port project on the Bay of Bengal from one that would cost US$ 7.3 billion to a more modest development that would cost US$1.3 billion in a bid to avoid shouldering an unsustainable debt.
Fears of a debt trap started late last year when unsustainable debt forced Sri Lanka to hand China an 80% stake in Hambantota port.
Mr. Khan’s move takes on added significance given that Pakistan appears to have decided to ask the International Monetary Fund (IMF) to help it avert a financial crisis with a loan of up to US$12 billion and discussions with Saudi Arabia that could produce up to US$10 billion in investments that would be separate but associated with CPEC.
Pakistani finance minister Asad Umar is expected later this week to initiate discussions with the IMF during the fund’s annual meeting in Bali. The decision was taken after Saudi Arabia refused to delay Pakistani payments for oil imports, opting instead to build a refinery and strategic oil reserve in the CPEC port of Gwadar.