US should not poke its nose into Pakistan-China affairs
Wasn't it former US president George W. Bush who first publicly admired China's unique model of authoritarian capitalism?
It's a bit rich of the Americans to try and talk us out of taking any more Chinese loans, CPEC- (China Pakistan Economic Corridor) related mega handouts more specifically, especially after US President Donald Trump pulled the plug on practically all US civil and military aid to Pakistan earlier in the year.
And if we're not getting any American aid, and we shouldn't sign up for Chinese loans, how do they expect us to continue functioning as a state? More International Monetary Fund (IMF) programmes are always an option, but that sort of structural adjustment austerity just kicks the default can further down the road, that's all, and does precious little for the kitty.
In all fairness, Assistant US Secretary for State Alice Well's remarks the other day betrayed more a fear of China's growing political/financial footprint than any concern for Pakistan's economic well-being. Everybody knows well that the time has finally come for Washington to actively cut China's expansionism or risk losing its 'swing superpower' status sooner or later. What do you think the trade, tariff, and (sometimes) currency war is all about?
Wasn't it former US president George W. Bush who first publicly admired China's unique model of authoritarian capitalism? Adhering to free market principles is that much easier, not to mention profitable, when an all-powerful state is able to call the shots; no trade unions, no unnecessary court cases, and never the threat of an eager opposition with a monkey wrench, etc. That is why some Texan oil billionaires also cautiously admired the Chinese model just as Beijing was cobbling together its idea for the Belt and Road Initiative (BRI), an ambitious plan to revive the ancient, fabled silk route in a modern, land-and-sea setting.
CPEC is a small but integral part of the wider initiative for both countries. Pakistan considers it a godsend, quite naturally, because who else would commit more than $60 billion worth of 'investments' here at this particular point in time, and also do a bulk of the physical work required to erect the necessary transport and manufacturing infrastructure? And China is counting on it to finally solve its problems in its western Xinjiang province, where Muslim Uighurs have not really benefitted from the country's 40 years of economic expansion. Beijing feels more trade through the new Gwadar port being developed on the Balochistan coast, also by China, will be just the olive branch the Uighurs need to abandon their agitation and finally embrace the state's communist ideals.
That is why Pakistani and Chinese governments scrambled to rubbish Alice Wells' warnings. The Americans are not just misinformed, we naturally said, but also very worried that revival of the silk route will rally growing economies towards China and away from the sole superpower. And that is also why we're convinced that Pakistan is the theatre of the new cold war; one which will not be about capitalism versus communism like the old days, but rather about two different variants of capitalism.
But it would be wrong to see all this in just black and white, especially for Pakistan. No doubt the Chinese are time-tested, all-weather friends and all that but how on earth are we really going to repay all these loans? Remember that the country has already quite literally eaten up more than a hundred billion (dollars) of loans, and now has to constantly find more lenders to keep old lenders from pushing us to very real chances of default.
The Chinese ambassador tried to address such concerns by promising that they would never press for repayment deadlines if Pakistan was struggling, something the Americans would never do. That is admirable and very helpful, of course, but such help would still keep the loans hanging and repayment a reality. Plus, delaying repayments because of Pakistan's financial problems could require the Chinese to keep delaying for a long, long time, which might not be very feasible.
Would that force China to do here what it has done in Sri Lanka and continues to do in Africa? In December 2017 Colombo was forced to sign over its Hambantota Port to Beijing on a 99-year lease simply because it was defaulting on the loans. In September 2018, Zambia lost control of its Kenneth Kaunda international airport, after already giving up majority share in the state broadcaster, to the Chinese for the same reason. And now the Kenyan government risks losing its lucrative Mombasa port, again, because it's simply unable to pay back Chinese loans.
Historically, China has done far more for Pakistan, politically as well as economically, than we have been able to do for them. And they might well go the extra mile with these loans just like they're saying. But it's for Pakistan to calculate just how closely another country would risk flirting with bankruptcy, however limited, just because it's a special friend who keeps asking for money but can never pay any back. At risk is not just Pakistan's health, but also the Middle Kingdom's plans of literally reshaping world trade with its new silk route.
Shahab Jafry is a senior journalist based in Lahore, Pakistan