With OBOR Party being over, Chinese diplomats have hailed the first OBOR forum a great success story, as it has led to assurances of buy-in from 30 states. The ultimate challenge now is to ensure universally recognised good practices of transparency and equality along with an inclusive development theme.
Too Many Goals lead to No Priority
Hailed as the “world’s project”, the OBOR initiative is aimed to boost infrastructure in Asia and Africa for the next decade and a half. In an attempt to bring all partners on board, the forum identified and approved over 270 goals under the umbrella of OBOR initiative.
Though setting high-level goals is a step in the right direction, butan agenda that involves 270 goals, runs the risk of being too general. The problem with this impossibly long list of goals is that nothing gets prioritised at the end of the day. All these 270 goals would not only result in a total lack of focus, but they would also be self-defeating.
Pitfalls of not being transparent
The situation clearly indicates that strategic bits of the initiative are not very clear. In fact, every Chinese province and state-owned firm has its own version of investment plan for OBOR projects. No framework was ever presented by Beijing in the forum and it seems that the Chinese are willing to throw cash without first working out the business case.
Beijing’s billion dollar investments to build ports in Sri Lanka became a nightmare for the country which has been mired in unsustainable debt. Similarly, dam projects in Myanmar have not gone well either.
Last month, Nepal and China signed a memorandum to build an $8 billion cross-border rail link as part of proposed China-India-Nepal corridor, but without first getting New Delhi on board.
Since 2009, China has poured $6.8 trillion in wasteful infrastructure investments with negative rate of returns and its incremental capital output ratio (ICOR) has increased by at least 50% in the last decade. At present, there are over 900 deals in the pipeline worth $900 billion which are set to reach $4 trillion mark in a couple of years – yet little is known about the project’s feasibilities. In fact, Chinese investors call the initiative “one road, one trap”.
The recent leaks of documents which detail China-Pakistan Economic Corridor’s (CPEC) long-term plan drafted by Beijing has raised many eyebrows and confirm worst fears of some people that the whole corridor may be actually ill-planned – rising bilateral trade deficits to skyrocketing levels.
At present, Pakistani exports to China are raw materials and primary goods such as textiles, rawhides, oil seeds, skins and agro products; whereas Pakistan imports from China are mainly finished goods such as machinery and chemicals. So, it is a no-brainer that Chinese investments to set up factories for production of value-added products from primary inputs would be highly profitable. In fact, this offers China the perfect opportunity to move its outdated polluting industries offshore as per its commitments to the Paris Agreement and focus primarily on innovation.
This Chinese version of the plan is still very vague and at the very best, is wishful thinking. There is very little that talks about the cross border movement of labour, environmental impact assessments of corridor projects and fiscal risk management.
Eastern Balochistan Neglected in CPEC
Former president of Pakistan Peoples Party (PPP) Balochistan Mir Sadiq Ali Umrani has said that eastern Balochistan has been completely neglected in the China-Pakistan Economic Corridor (CPEC) project. He told a press conference on 04 Jun 17 that, not even a single project from the region has been included in the mega economic development project. He highlighted the canal irrigation system as the salient feature of the region adding that the eastern Balochistan plays an important role in the agriculture sector of the province.
US-SAUDI PLOT FOR IRAN : ALARM BELLS FOR CPEC
US-backed Saudi plans to destabilise Iran threaten to substantially worsen security in the already troubled Pakistani province of Balochistan, a key maritime and land node of CPEC.Balochistan, sandwiched between Iranian-Pakistani border, a volatile, once independent, inhospitable and difficult to access has become an important player in the Saudi plans. Home to the Chinese-backed port of Gwadar, 600km east of the world’s biggest energy choke point, the Strait of Hormuz, Balochistan has long been troubled by a low level nationalist insurgency. To counter this, Pakistan has backed religious militants, who also enjoy Riyadh’s support.
Baloch nationalists in Balochistan have vowed to thwart CPEC. “This conspiratorial plan is not acceptable to the Baloch people under any circumstances. Baloch independence movements have made it clear several times that they will not abandon their people’s future in the name of development projects or even democracy,” said Baloch Liberation Army spokesman Jeander Baloch.
Baloch spoke after two attacks this month by different groups, one targeting workers toiling on CPEC-related projects, the other targeting Senator Abdul Ghafoor Haideri, the deputy chairman of the Pakistani upper house of parliament.. Earlier armed men posing as police have since kidnapped two Chinese teachers in the Baloch capital of Quetta. The security situation is worsening by day.
Saudi Arabia, emboldened by US President Donald Trump’s visit to the kingdom this month and his embrace of its view of Iran as one of the world’s foremost terrorist threats, sees Iran’s ethnic minorities as a way of destabilising the Islamic republic, if not toppling its government.
Saudi Deputy Crown Prince Mohammed bin Salman, on the eve of Trump’s visit, warned the battle with the Islamic republic would be fought “inside Iran, not in Saudi Arabia”. The remarks followed a statement by General Joseph Voltel, head of US Central Command, that appeared to hold out the possibility of exploiting aspirations of ethnic minorities in Iran to weaken its Islamic regime.
Prince Mohammed did not spell out how he intended to take Saudi Arabia’s fight to Iran, but a Saudi government-backed think tank, the Arabian Gulf Centre for Iranian Studies argued in a recent study that Chabahar posed “a direct threat to the Arab Gulf states” that called for “immediate counter measures”. Chabahar would enable Iran to increase market share in India for its oil exports at the expense of Saudi Arabia, raise foreign investment in the Islamic republic and increase government revenues, and allow Iran to project power in the Gulf and the Indian Ocean.
Saudi Arabia may already have the building blocks for a proxy war in Balochistan. Saudi-funded ultraconservative Sunni Muslim madrassas operated by anti-Shiite militants dominate Balochistan’s educational landscape. Iran has accused the United States, Saudi Arabia and Pakistani intelligence of supporting anti-Iranian militants in Balochistan, including Jaish al-Adly, an offshoot of Sipah that claimed responsibility for the killing in April of 10 Iranian border guards.
Fuelling ethnic tensions in the Islamic republic risks Iran responding in kind. Saudi Arabia has long accused Iran of instigating low level violence and protests in its predominantly Shiite, oil-rich Eastern Province as well as being behind the brutally squashed popular revolt in majority Shiite Bahrain. Fomenting unrest in Sistan and Baluchistan could spark a tit-for-tat struggle not only in Pakistan but the kingdom itself that could further jeopardise China’s efforts to secure energy resources and implant its footprint across Eurasia and the Middle East.
The spectre of ethnic proxy wars could blow a huge hole into CPEC, that China may find hard to fill. China’s tacit support of Pakistan’s use of militant proxies to counter Baloch nationalists and needle India by preventing Pakistani militants from being designated by the United Nations Security Council as terrorists further complicates matters.