Recent criticism of the China Pakistan Economic Corridor (CPEC) project by the United States, has understandably drawn attention within Pakistan, as well as outside the region. US for long has been critical of the Belt & Road Initiative (BRI) in general, and some of the BRI projects in South Asia, especially the CPEC project.

A report by the Centre for Global Development (CGD, Washington DC) published in 2018 argued, that the BRI project will lead to a situation where borrowings, by countries which have signed up for the project, will build up to a degree where debts become unsustainable (this situation has been dubbed as ‘debt trap’).

Pakistan was identified as one of the 8 countries, which may land up in a  ‘debt trap’ (the only other South Asian country was Maldives). Beijing and Islamabad have on more than one occasion, reacted strongly to criticism of the project and rubbished claims that Pakistan’s debts are unsustainable.

Apart from the US, India too has been critical of the CPEC project. The main objection of India, to the CPEC project has been the fact, that it passes through the disputed territory of Gilgit and Baltistan.

US Scepticism with Regard to CPEC

If one were to look at recent US criticism of CPEC, Alice Wells Principal Deputy Assistant Secretary of State for South and Central Asia, first criticised the project for the clear lack of transparency, as well as not being economically sustainable in November 2019, during the course of an interaction at the Woodrow Wilson Centre, Washington DC. Wells, reiterated her criticism of CPEC, during her visit to Pakistan in January 2020.

The Senior State Department Official, also made the point, that a number of firms, which had been blacklisted by the World Bank, had been awarded contracts through CPEC.

The Pakistan PM, Imran Khan and other senior politicians, reacted strongly to  Wells criticism arguing, that the project would play a crucial role in the country’s economic progress. It would be pertinent to point out, that there are a number of lobbies in Pakistan, which while being critical of the US, have for long being questioning the long term implications of the Pakistan-China economic relationship in general, and the lack of transparency with regard to the CPEC project in particular.

This includes, both strategic commentators, and sections of the business community and even a section of the political class. The main criticisms of the project are; doubts with regard to the economic sustainability of the project, and the fact that certain provinces are reaping the benefits of the project, while others such as Balochistan and Khyber Pakhtunkhwa (KPK) have been left out.

It would be pertinent to point out, that Imran Khan when in opposition, had himself put forward his misgivings with regard to the project. Even senior members of his Cabinet had spoken about the need for renegotiating the terms and conditions of CPEC. Beijing did not take kindly to such remarks and since then Imran Khan and his colleagues have been cautious and gone the extra mile in defending the CPEC project.

Alice Wells recent criticism has once again brought to the fore important issues with regard to CPEC. An article in Dawn titled ‘Alice’s mis (adventures)’begins by questioning Washington’s dealings with Pakistan, and it’s patronage of military regimes.

The article also makes the point, that if US aid has not been utilised properly, America is to be blamed for following a myopic and transactional approach towards Pakistan, where the interests of the Pakistani people have been ignored. It then examines in detail, the lack of transparency of the CPEC Project, and how the structure, terms and conditions of Chinese loans could prove to be a challenge in the long run.

Most significantly, Wells’ remarks have once again raised the question of how Pakistan needs to approach its outside relations with Great Powers, especially US and China and how it can balance ties. The article in Dawn states:

‘Islamabad must realise, that it doesn’t belong in the boxing ring among two global heavyweights and should refrain from reacting irresponsibly’.

This is important, because in recent years after Washington-Islamabad ties have gone downhill, many in Pakistan, especially the establishment, have virtually put all Pakistan’s eggs in the Chinese basket. As mentioned earlier, this has not gone down well with members of Pakistan’s intelligentsia as well as polity who believe that the country needs to have an independent foreign policy.

Finally, while no one has really sought to look at CPEC as a facilitator of regional connectivity in South Asia. A number of analysts and commentators have spoken on more than one occasion about the need for getting South Asian neighbours on board.

The Imran Khan government too has been seeking to bring neighbours, including Iran on board the CPEC project (it has dubbed the arrangement as CPEC+1), but there has been no real discussion with regard to India being part of the project (oblique references have been made to India joining the project, though New Delhi has flatly refused such proposals).

Interestingly, even on the Indian side, it has been argued that Indian participation in CPEC, which could give a boost to trilateral cooperation. This has been dismissed, and may seem unlikely in the short run given the tensions between both countries (While New Delhi officially has on more than one occasion, put forth its objections to CPEC, and unequivocally stated, that it will not join the project, there are those who believe that over a longer term this may be possible)

Conclusion

While Alice Wells views with regard to Pakistan-China economic ties or the CPEC project may be one sided, her scepticism with regard to the long term implications of the project have once again generated an interesting debate, not just with regard to the project itself, but Pakistan’s foreign policy, as well as the strategic and economic dimensions of CPEC in the context of South Asia.

It remains to be seen, whether Pakistani policymakers understand the need for greater transparency with regard to the project and to address misgivings of domestic stakeholders.

It is also important for strategic commentators and economists, not just in Pakistan, but all those interested in South Asia, to examine the possibility of CPEC as a tool for economic cooperation and connectivity, and not as a source of conflict.

This may seem impossible in the nearer term, but with the changing geopolitical and economic dynamics in the region, it can not be ruled out over the long term.