by PERVEZ HOODBHOY
An exam question for CSS aspirants: what’s higher than the Himalayas, deeper than the seas, stronger than steel, and sweeter than honey? Well, dear candidate, any hesitation suggests your patriotism level needs checking in Rawalpindi or Aabpara.
Every flag-waving Pakistani knows Pak-China friendship is the only answer. Next, what makes CPEC a game changer? Obvious! New industries will sprout, existing ones will hum away, exports will shoot through the roof, Gwadar will become the next Dubai, all debts will be paid off, jobs will be galore, and the sun shall shine forever.
These dreams lie punctured as Pakistan gallops towards debt default. CPEC started in 2013, with $62 billion spent to date. But now debt-ridden Pakistan is casting around for loans to pay older loans. Whoever will give — and on whichever terms — is to be heartily embraced. The ‘unbreakable bonds’ of Pak-China friendship are under stress.
According to IMF data, China holds roughly $30bn of Pakistan’s $126bn total external foreign debt. This is thrice its IMF debt ($7.8bn) and exceeds its borrowings from the World Bank and Asian Development Bank combined. So why is mighty China awaiting the green signal from American-led IMF before releasing some relief? Shouldn’t it at least reschedule Pakistan’s debt? Or, better, wipe it off?
Let’s face it: these are naïve hopes. Chinese capitalism — like any other capitalism — is about profit, not philanthropy. In Marketing-101, a budding businessman learns how to sell water to a drowning man. Banking-101 tells you how to identify desperate debtors. Law-101 is about dealing with defaulters.
Chinese companies, state or private, are like other companies. Being under their government’s instructions to view Pakistan as a strategic ally, they understand Gwadar gives entry to the warm waters of the Persian Gulf — those which allegedly attracted USSR into invading Afghanistan. But they tread cautiously; Pakistan is not the world’s best place to park your capital.
New ventures are therefore few and even these are low-tech. A plant in Hub manufactures excellent Hui Cheng beer. Elsewhere: a cellphone assembly plant, automobile spare parts made here and footwear made there, a microfinance bank, etc. Plus, farmland has been acquired for vegetables to be shipped to the Chinese market.
Ah, but what about hi-tech stuff like nuclear technology? There’s a 50-year history of Chinese nuclear help to Pakistan, both open and clandestine. Without that, Pakistan’s atomic bomb and the 1998 nuclear tests wouldn’t have happened. Still, there was a substantial Pakistani element to the bomb.