niaz
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We are helping Chinese so why should we even pay them a dime? Given the size of our population we could've eventually become a major economy in the next 3-4 decades.
This thread is dedicated to Indian concerns over CPEC, their strategy in countering it ,Their opinions whether or not legitimate or illegitimate.
PS:Keep the debate as constructive as possible no sniffing backsides and senseless talk.
My Assessment
The Indian Opinion
- We have already seen the trade deficit becoming a serious problem for Pakistan and various economist on TV worrying about next bailout pointing towards International banks (WB IMF,ASDB etc), Now Pakistan has to pay Chinese banks as well ,We also have witnessed a slight but clear increase in Debt after CPEC / Right after CPEC began port operations and Initial trade started flowing in.
- CPEC is militarily unacceptable to India hence the economic project has potential to escalate military conflict in the region involving foreign players like the United states who already sided the Indian camp ,India also intensifying efforts to derail CPEC by using alternate trade stations like Ports in chabahar and diversifying economic relations with Iran and Afghanistan,This leaves little room for future reconciliation over key-issues like Kashmir and South asian economic integration which can be more beneficial to common folk and help balance current and future trade crisis ,The recent Indo-china standoff in Doklam plateau at the Sikkim-Bhutan-Tibet tri-junction is another serious concern for Pakistan ,It risks Pakistan's Interests over Kashmir and geopolitical goals.
- To counter Afghanistan's official stance over CPEC and potential partner ,India has invested in a trade corridor connecting Chabahar India-Afghanistan Iran to (Africa and Middle east plus rest of the world). A planned road connecting the port to Afghanistan is being constructed, This can liberalize Afghan demand and provide an alternate over current trade with Afghanistan which is our 3rd biggest export partner ,currently Pakistan's services sector (Agriculture food processing etc) reap benefits over this trade with afghanistan.
Indian assessment on CPEC revolves around the fact that "China" needs "Pakistan" therefore why should Pakistan pay China at all?
@Signalian @Joe Shearer @niaz @Mentee
Undoubtedly when CPEC is operation, it would be very difficult for IAF to bomb Gwadar and the import routes to China. But should we really care what India or any other country thinks about CPEC?
In my view CPEC is primarily a bilateral matter between Pakistan & China. Since it is not a military pact against India, our discussions should focus on its pro & cons vis-à-vis Pakistan economy only. For example:
“Exports to China shrank to $1.62 billion in 2016-17 from $2.69bn in 2013-14. Imports from China, in contrast, grew to $10.53bn in 2016-17 from $4.73bn in 2012-13, an increase of 123pc.”
https://www.dawn.com/news/1349800
Let us be clear most of the Chinese investment in Pakistan related to CPEC is not a grant and the loans with interest will have to be paid back. One view is expressed as :
“In another article from Dawn, Khurram Hussain tallies up the costs. He writes that “the debt service outflows will be about $1 billion and the return on equity will be $646 million if it is kept at 17 percent. Add to that $1.9 per cent as repayment of principal. That means an annual net outflow of $3.546 billion per year once the corridor becomes fully operational.” Prominent local economists have also expressed serious concerns over Pakistan’s ability to service the debt. Hafiz Pasha, a former finance minister, and Ashfaq Hassan, a former adviser to the Finance Ministry, have estimated that CPEC loans will add $14 billion to Pakistan’s total public debt, raising it to $90 billion by the fiscal year ending June 2019.”
https://thediplomat.com/2017/06/can-pakistan-afford-cpec/
I am not fully convinced that it a game changer and feel that Chinese goods would have adverse effect of Pakistani industry. Regarding the statement “Since China" needs "Pakistan" why should Pakistan pay China at all? I would say that the agreement has already been signed and it is too early to fully assess its impact on Pakistan’s economy. There is little justification for trying to alter ‘Terms & conditions’ of the agreement at this stage.
However, every project involving foreign investment must be a “win-win” for the investor as well as for the country of investment. Should it turn out to be a one sided affair after CPEC has been in operation for a couple of years; Pakistan would be justified to ask China for better terms.
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