Pakistan urges China to soften terms for power deals

[nahtanbob]

It has little to do with what the US was saying and the total lack of economic knowledge in Pakistani society, even among the "intelligentsia" -- and both ways.

Yes, the pro-CPEC folks were whipping up "hybrid warfare" and "5th-generation" warfare talk, while the anti-CPEC side didn't formulate a real argument other than "Army this, Army that, Army, Army, Army."

So, it was a typical Pakistani drawing room "discussion" -- people speaking, no one actually saying anything.

In truth, we now know that we as Pakistanis generally lack economists. I'm not talking about bankers, accountants or 'finance experts,' but real economists who can speak to trade, monetary, etc policy.

Seriously, I bet $100 that neither Mian Nawaz Sharif, Gen. Raheel Sharif, or Gen. Bajwa seriously thought about the impact of front-loading energy/infrastructure in CPEC on our BoP, hard currency flows, etc.

For Pakistani leaders and people alike, the economy is this magical thing, it works or it doesn't. This is why you get people expecting the gov't to subsidize essentials, or somehow bankroll J-10CEs, and so on.

I'm no economist, but even if I start talking about the basics (and their impact on Pakistan), then even people with 20+ years of banking experience will zone-out. This is the sincere guy, but imagine the typical politician.

I never understood how world class physical infrastructure automatically translates into economic growth. this looks collectively like a society that wants to live beyond its means. (at a certain level America is no different)

A good chunk of the -26 negative ratings were from moderators who disliked anti-CPEC comments.

 

[Bilal Khan (Quwa)]

I never understood how world class physical infrastructure automatically translates into economic growth. this looks collectively like a society that wants to live beyond its means. (at a certain level America is no different)

A good chunk of the -26 negative ratings were from moderators who disliked anti-CPEC comments.

I have a theory. I think that most of Pakistani society's exposure to the world comes from the Gulf (expats, migrant workers, etc), and that set-up a false sense of progress. So, they assumed the infrastructure (especially roads) had resulted in progress, not the oil/gas wealth driving it.

Folks expect wealth from a free/loose hand, and for things to happen quickly (as they artificially do in the Gulf).

If only we had even more exposure about the dirt Americans went through in the 18th and 19th centuries as they became a superpower. If only folks could appreciate the Ford T1 and the fact that the US highway network didn't come until after WW2.

 

[dbc]

The most startling aspect of the 62 billion USD of Chinese CPEC investment into Pakistan from 2013-2018 is that it has failed to stimulate GDP growth or increase Pakistani employment. Despite massive CPEC investment that span mega projects linked to railway, highway, Gwardar and power plants.

It just boggles the mind, but clearly Chinese CPEC investments is a clever scheme to:

1- benefit Chinese enterprise that execute these projects
2- Chinese enterprise that supply materials for these projects
3- To keep lots of Chinese people employed
4- Chinese exploitation of local resources
5- Vehicle for capital flight out of China.
6- Future revenue stream from operations.

The person that devised this scheme is a genius the Professor Moriarty of our times.

Spoiler: A Critical Review of China's Approach to Aid, Case in point: China Pakistan Economic Corridor (CPEC)

The following sections in Chapter 4, (4.2-4.4), observed the data from the three specific socio-economic indicators chosen for this study. The findingsfrom section 4.2 showed that Pakistan’s increase in GDP was very marginal between 2013-2018. While the data forecasts that GDP is expected to rise by 2-2.5% in the next decades, the initial trend suggests the $62 Billion invested in infrastructural projects so far has not influenced GDP levels in Pakistan. In addition, news items and scholars have forecasted this rise based on the understanding that China continues its investments in Pakistan. Relating this back to EzealaHarrison’s theory, Pakistan’s overdependence on China is a prime cause that is contributing to its continued underdevelopment. Section 4,3, that looked at the data regarding job creation disproved the notions made by supporters of CPEC. Instead of stimulating job creation, the data concluded that unemployment was a rising trend in Pakistan during 2013-2018.

https://openaccess.leidenuniv.nl/bitstream/handle/1887/77031/Final, Thesis.pdf?sequence=1

 

[Bilal Khan (Quwa)]

The person that devised this scheme is a genius the Professor Moriarty of our times.

...or he was scamming Winnie the Pooh, Piglet, Tigerr and Eeyore. I mean, it could go either way.

 

[dbc]

...or he was scamming Winnie the Pooh, Piglet, Tigerr and Eeyore. I mean, it could go either way.

Yes someone is getting very very rich...

 

[Robbie]

It just boggles the mind, but clearly Chinese CPEC investments is a clever scheme to:
1- benefit Chinese enterprise that execute these projects
2- Chinese enterprise that supply materials for these projects
3- To keep lots of Chinese people employed
4- Chinese exploitation of local resources
5- Vehicle for capital flight out of China.
6- Future revenue stream from operations.

The person that devised this scheme is a genius the Professor Moriarty of our times.

You forgot one important aspect: Moving and monetizing old Chinese power plants and technology at premium rates.

Pakistani report:
https://tribune.com.pk/story/1082322/against-the-tide-world-moves-away-pakistan-goes-towards-coal/

Interestingly, Beijing also vowed in the Paris meeting that it would contribute to the efforts aimed at reducing global warming and would shift most of the coal power plants to developing countries. Pakistan is one of the destinations that China is targeting for installing coal power plants, including some old plants, as suggested by some reports.

At present, Pakistan and China are working on inter-connecting the electricity grid, which suggests that Beijing could set up more coal power plants in Pakistan to meet its energy needs. They are set to develop over 10,000-megawatt plants including coal projects.

China is the only country that is providing financing for Thar coal mining under the economic corridor project, though many coal mining companies there have defaulted on bank debt repayments.

The Paris climate deal has restricted financing for coal power plants and Washington has already refused to dole out funds for such projects in Pakistan.

In such a scenario, China would have monopoly over financing for coal projects, which may be provided at higher rates. This was the reason behind the National Electric Power Regulatory Authority’s (Nepra) decision to increase the rate of return from 17% to 22% for Engro coal mining projects in Thar, which was funded by China.

But if anyone, least of all an Indian, points it out to Pakistan, its 5th generation war.

In truth, we now know that we as Pakistanis generally lack economists. I'm not talking about bankers, accountants or 'finance experts,' but real economists who can speak to trade, monetary, etc policy.

You're not alone there. That's true for India as well.

Though economics is a fairly popular subject at undergrad level, the penetration of economists in the Government is shockingly low.

 

[nahtanbob]

You forgot one important aspect: Moving and monetizing old Chinese power plants and technology.

Pakistani report:
https://tribune.com.pk/story/1082322/against-the-tide-world-moves-away-pakistan-goes-towards-coal/



But if anyone, least of all an Indian, points it out to Pakistan, its 5th generation war.

you forget hybrid war, hybrid war on the hybrid war ... some folks learn it the hard way.

The most startling aspect of the 62 billion USD of Chinese CPEC investment into Pakistan from 2013-2018 is that it has failed to stimulate GDP growth or increase Pakistani employment. Despite massive CPEC investment that span mega projects linked to railway, highway, Gwardar and power plants.

It just boggles the mind, but clearly Chinese CPEC investments is a clever scheme to:

1- benefit Chinese enterprise that execute these projects
2- Chinese enterprise that supply materials for these projects
3- To keep lots of Chinese people employed
4- Chinese exploitation of local resources
5- Vehicle for capital flight out of China.
6- Future revenue stream from operations.

The person that devised this scheme is a genius the Professor Moriarty of our times.

Spoiler: A Critical Review of China's Approach to Aid, Case in point: China Pakistan Economic Corridor (CPEC)

The following sections in Chapter 4, (4.2-4.4), observed the data from the three specific socio-economic indicators chosen for this study. The findingsfrom section 4.2 showed that Pakistan’s increase in GDP was very marginal between 2013-2018. While the data forecasts that GDP is expected to rise by 2-2.5% in the next decades, the initial trend suggests the $62 Billion invested in infrastructural projects so far has not influenced GDP levels in Pakistan. In addition, news items and scholars have forecasted this rise based on the understanding that China continues its investments in Pakistan. Relating this back to EzealaHarrison’s theory, Pakistan’s overdependence on China is a prime cause that is contributing to its continued underdevelopment. Section 4,3, that looked at the data regarding job creation disproved the notions made by supporters of CPEC. Instead of stimulating job creation, the data concluded that unemployment was a rising trend in Pakistan during 2013-2018.

https://openaccess.leidenuniv.nl/bitstream/handle/1887/77031/Final, Thesis.pdf?sequence=1

It is not just CPEC. It is whole BRI/OBOR pyramid

 

[Bilal Khan (Quwa)]

You're not alone there. That's true for India as well.

Though economics is a fairly popular subject at undergrad level, the penetration of economists in the Government is shockingly low.

But in India there is still a cadre in government that 'gets' these things at a decent level, if not better. It's totally absent in Pakistan.

 

[Robbie]

But in India there is still a cadre in government that 'gets' these things at a decent level, if not better. It's totally absent in Pakistan.

Relative to Pakistan, yes. That's just a stroke of fate though. Soon after independence Govt consulted economists and that bred popularity of the subject with students.

That said, compared with major economies - US, Germany, China, they are are pitiably short. The economists there are embedded in many levels of the Government as opposed to India where there is one top-level cadre for the PM and not much to speak of in the rest of the Government. This is why on average in both the population and the Government, the understanding of economics is poor.

 

[dbc]

But if anyone, least of all an Indian, points it out to Pakistan, its 5th generation war.

I was tempted to tag the PAN (Pretend American National) guy but I resisted the urge. I suspect his whole world will collapse at the mere whiff of reality.

 

[Ahmet Pasha]

They are cut throat businessman. Do you want to be re educated??

I hope China will agree on atleast 1 Concession if not both . China understands Pakistan weak economy , which after Covid-19 is further under stress

Yes Sir totally. I along with others like you have been saying quite vocally that it is upon us Pakistanis to make CPEC a success or as a Brigadier sahb said we will only fix punctured Chinese tires and serve them parathas. If the business community, bureaucracy, and politicians etc continue to make lackluster bongiyan and if everyone will just be busy in their "afsari" then we won't be going anywhere.

It has little to do with what the US was saying and the total lack of economic knowledge in Pakistani society, even among the "intelligentsia" -- and both ways.

Yes, the pro-CPEC folks were whipping up "hybrid warfare" and "5th-generation" warfare talk, while the anti-CPEC side didn't formulate a real argument other than "Army this, Army that, Army, Army, Army."

So, it was a typical Pakistani drawing room "discussion" -- people speaking, no one actually saying anything.

In truth, we now know that we as Pakistanis generally lack economists. I'm not talking about bankers, accountants or 'finance experts,' but real economists who can speak to trade, monetary, etc policy.

Seriously, I bet $100 that neither Mian Nawaz Sharif, Gen. Raheel Sharif, or Gen. Bajwa seriously thought about the impact of front-loading energy/infrastructure in CPEC on our BoP, hard currency flows, etc.

For Pakistani leaders and people alike, the economy is this magical thing, it works or it doesn't. This is why you get people expecting the gov't to subsidize essentials, or somehow bankroll J-10CEs, and so on.

I'm no economist, but even if I start talking about the basics (and their impact on Pakistan), then even people with 20+ years of banking experience will zone-out. This is the sincere guy, but imagine the typical politician.

Yes China is helpful for Pakistan. But in this world of interests. China certainly is not this Heavenly Himalya se unchi aur samandaro se gehri angelic figure we Pakistanis have made it out to be.

We Pakistanis fall in ishq with a country too quickly too soon. First the arabs were our darling biradar mulk then they fell in India's lap. Americans to wese hi were double edged swords.

Often I've seen Pakinstani "uncle type" people just go into a different sort of mind set when encountering different races(read people whiter than them or those who speak english) and let themselves be wooed by the guy who is fooling them/taking them for a ride and grinning to their face but stabbing them in their back.

 

[Adonis]

I hope China will agree on atleast 1 Concession if not both . China understands Pakistan weak economy , which after Covid-19 is further under stress

I doubt. Chinese means business without any emotions.....they are very miser when it comes to money.

 

[Pakistan Ka Beta]

They are cut throat businessman. Do you want to be re educated??


Yes Sir totally. I along with others like you have been saying quite vocally that it is upon us Pakistanis to make CPEC a success or as a Brigadier sahb said we will only fix punctured Chinese tires and serve them parathas. If the business community, bureaucracy, and politicians etc continue to make lackluster bongiyan and if everyone will just be busy in their "afsari" then we won't be going anywhere.


Yes China is helpful for Pakistan. But in this world of interests. China certainly is not this Heavenly Himalya se unchi aur samandaro se gehri angelic figure we Pakistanis have made it out to be.

We Pakistanis fall in ishq with a country too quickly too soon. First the arabs were our darling biradar mulk then they fell in India's lap. Americans to wese hi were double edged swords.

Often I've seen Pakinstani "uncle type" people just go into a different sort of mind set when encountering different races(read people whiter than them or those who speak english) and let themselves be wooed by the guy who is fooling them/taking them for a ride and grinning to their face but stabbing them in their back.

Thats why i said atleaset 1 concession out of 2 but remember We are talking about this due to Covid-19 , which is once in a life time kind of situation ( Earth quakes , floods e.t.c happened in certain parts of Pakistan in Past but this time whole Pakistan , or may i say whole world including China ) , Plus with countering Anti CPEC propaganda by western countries and chance for China to show the world that China friendship brings Benefits not Debt traps , We can say they will give some concessions but dont know which ones .
If u don't agree no need to show your background by disrespecting/snubbing new members. Thanks . Take Care .

 

[PakFactor]

They are cut throat businessman. Do you want to be re educated??


Yes Sir totally. I along with others like you have been saying quite vocally that it is upon us Pakistanis to make CPEC a success or as a Brigadier sahb said we will only fix punctured Chinese tires and serve them parathas. If the business community, bureaucracy, and politicians etc continue to make lackluster bongiyan and if everyone will just be busy in their "afsari" then we won't be going anywhere.


Yes China is helpful for Pakistan. But in this world of interests. China certainly is not this Heavenly Himalya se unchi aur samandaro se gehri angelic figure we Pakistanis have made it out to be.

We Pakistanis fall in ishq with a country too quickly too soon. First the arabs were our darling biradar mulk then they fell in India's lap. Americans to wese hi were double edged swords.

Often I've seen Pakinstani "uncle type" people just go into a different sort of mind set when encountering different races(read people whiter than them or those who speak english) and let themselves be wooed by the guy who is fooling them/taking them for a ride and grinning to their face but stabbing them in their back.

We do have that mindset but slowly I see people becoming more adaptable and moving away from the Uncle type. We need to lose our emotions when Interacting with others.

 

[Smarana Mitra]

As long as the electricity price in consumer level is good, those loan will be able to be repaid. The project cost seems reasonable compared to Indonesia estimation of its new 35.000 MW project which is 88 billion USD.

Cost of capital in international markets per 1GW is $2.5 billion. But in India, the cost of setting up power plant comes to $1 billion including all costs for auxiliary plants and support infrastructure. Additional funds are needed for buying land and building roads to connect the land etc. But capital cost is 40% of international price.

In this context, the cost of capital for Pakistan though reasonable in international trade, is too high for its domestic economy.