Imran Khan to visit Beijing: Pakistan PM's love for China will be tested by CPEC rethink, ill-treatment of Uighurs

Prime Minister Imran Khan will soon go on a pilgrimage of a different kind. Reports indicate he is to visit China on 3 November. As apparent to almost anyone who has heard him speak, Imran has an abiding admiration for almost all things Chinese, particularly their (apparent) fight against corruption. That’s understandable. Imran’s main plank for election has been the very real looting of the country that past heads of state and their supporters have indulged in at the expense of the people they were supposed to govern.

File image of Pakistan prime minister Imran Khan. Reuters

File image of Pakistan prime minister Imran Khan. Reuters

That state of wholesome appreciation may however be eroding a little. Faced with an almost PKR 1.3 trillion debt as the rupee crashed to 139 to the dollar, his economists are likely to advise caution in going full steam ahead with the China-Pakistan Economic Corridor (CPEC). This throttling back is a given anyway, with Islamabad forced to go back to the International Monetary Fund (IMF) for its biggest loan ever.

Data from the State Bank of Pakistan indicates that government borrowing has been climbing steadily in the last quarter. This includes funds from the central bank, the ADB, issuance of Sukuk bonds, and loans from China. That last section increased significantly compared to the same period last year, a figure also borne out by budget documents. This fiscal year, the budgeted amount in terms of total loans and grants from China was PKR 150,287 million, more than double the figure of 2012-2013. Given that less one percent is made up of grants, this is obviously heavy monetary going.

Islamabad is apparently now doing a re-think, even with regard to core projects. A major portion of loans from China was with regard to Public Sector Development projects like the M-1 railway line from Karachi to Peshawar. The budgeted amount for this prestigious project also increased from PKR 9,282 million (FY 2017-2018) to PKR 13,295 million a year later. The project which was declared “strategic” by the 6th JCC ( Joint Cooperation Group) in 2016, is aimed at doubling the rail line between Karachi and Peshawar at an estimated cost of nearly PKR eight billion. China was to provide concessional loans for 85 percent of the project, and Pakistan footing the rest.

In early 2018, reports indicated that the Chinese were making a bid to also be part of the management and running of the line: with the clear message that no ‘concessions’ would be entertained without these. Recently, Pakistan announced a cut in the project’s budget by PKR 2 billion, which is probably its share of the cost. There’s no money, and what’s more, Pakistan Railways is likely to balk at having the Chinese running them quite literally on the rails.

Clearly, there are aspects of the CPEC being re-considered. Earlier, a key economist Atif Mian, slated to be part of the Economic Advisory Council was fired ostensibly for being an Ahmadi. He was, however, also the one who questioned the lack of transparency (and sense) in concessions given to China by the previous government. Since then, there have been intermittent reports of a Pakistani rethink. A nine-member committee was to re-evaluate the CPEC projects, and members were quoted as saying that Pakistan had given away far too much to Beijing.

Attempts at negotiations with its creditor did not apparently succeed, since China stated firmly that such negotiations would only apply to projects that have not yet got off the ground. Following this, the Minister for Planning and Development Makhdoom Khusro Bakhtiar, whose department is the key ministry negotiating with the Chinese, announced that Pakistan would throw open the CPEC to other countries, also hinting that Pakistan would hire international consultants for efficient financial modelling of CPEC.

The “other countries” (read Saudi Arabia) clearly did not come up with much, despite the new prime minister’s bee line for Riyadh immediately after his swearing in. So, it's back to the IMF and its clearly and openly stated strictures on debt to China. Imran will have go to Beijing with spreadsheets on re-negotiation terms. That’s not a meeting any Head of State would envy. There is worse to follow on another front. The ebullient Minister for Religious Affairs and Inter-faith harmony Noor-ul-Haq Qadri, was reported in The News on 20 September as having discussed Chinese treatment of its Uighur Muslims with Ambassador Yao Xing. That report almost immediately went off the air, and a denial was promptly issued.

The minister—the same person who shared a dais with designated terrorist Hafiz Saeed of the Lashkar-e-Taiba—explained that the only things discussed related to the curriculum in Muslim schools and Islamabad’s intention to provide a moderating influence.  Pakistan has, traditionally, been more than circumspect about reports of internment camps for Uighurs in the neighbouring province of Xinjiang, refusing to comment. That policy went up in flames when the Financial Times reported that several Pakistanis reached Beijing to petition authorities to release their wives, caught up in the interning of Muslims in the area.

According to the paper, some 350 to 400 women married to Pakistanis have been detained and their passports confiscated. This is embarrassing on several levels for Islamabad. First, the visiting Pakistani prime minister may have to take up an issue he would rather ignore altogether. Second, Beijing is more likely to ask Imran to gift wrap Beijing’s Islam for the edification of Chinese Muslims. Remember, General Musharraf was virtually a poster boy for China in Xinjiang. That could be very embarrassing for Pakistan. A Head of State can't refuse a creditor, but neither can he be seen as whitewashing the internment of hundreds of Uighurs.

Now that the country has decided to fall back on the IMF for its next tranche of loans, the possibility that Imran will ask for yet another loan seems unlikely. According to available data, China has already provided loans of more than $7 billion between March 2017 and July 2018, some of them at concessionary rates. Adding to this basket would hardly be viewed favourably by the international financial body. However, Imran can take heart: his army chief has smoothed the way for him. The chief’s visit mid-September seemed to have included a mandate to soothe Beijing’s ruffled feathers, when another advisor Abdul Razak Dawood called publicly for a wholesale suspension of CPEC for a year, until its many financial implications (among others) were studied. That statement was later “clarified”, but the army obviously decided that a little more was necessary by way of explanation.

There is little else to cheer up the visiting prime minister, barring a few ‘deliverables’ on social development projects. For the moment, Imran could wish for just a little help for his cherished project of building 5 million new homes. Imran simply can't afford yet another roll back at a time when his batting average in most areas is disastrously low. Beijing may well oblige or even surprise. A CPEC under fire is a very real threat to the overall Belt and Road Initiative. Someone somewhere has to tighten their belts and cough up the money. It’s certainly not going to be Islamabad.


Updated Date: Oct 10, 2018 21:54 PM

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