Post Bajwa Insurance, China have decided to set the course to milk the cow. To expand the China-Pakistan Economic Corridor (CPEC) scope to encashing the copper, gold, oil and gas reserves was endorsed on behalf of Bajwa during the 9th Joint Cooperation Committee (JCC) meeting. To a tune of USD 60 billion lopsided so-called trade agreements, in garb of CPEC, it’s a ploy of shifting away from infrastructure projects and scouting for copper, gold, oil and gas sectors of Pakistan, now finally underway.
Interestingly Moody’s credit rating (which are paid for) for Pakistan have gone up to “stable”, just based on revenues anticipated to be generated, for expectation of the payments to mining workforce, transportation revenues and based on fraudulent Dollar/Tonne export equation. As understood of Chinese Modus Operandi, Machinery comes from China, skilled manpower need is providing jobs to workers from Mainland China, and export revenues are banking up in the Chinese economy. However, Moody’s report puts all these, up against Pakistani economy’s name, to give 2017 like rating of “Stable” to Pakistan Economy. Will the fall be as bad as 2018-19, or worse and make Pakistan a China-owned unskilled labour camp/Sweat Shop.
CPEC: Resource and Exploitation Colonialism and more
China Pakistan Economic Corridor (CPEC) is not an investment in Pakistan but is structured as a resource extraction exercise, a US-based frontier, and an emerging market analyst had already predicted in 2015. The majority of Chinese investment in Pakistan is self-proclaimed and is not benefitting the local economy.
Above USD 60 billion, is required, to mostly be spent on Chinese equipment, and to pay Chinese skilled workforce, and an insignificant token amount on unskilled labour force which is to be drafted from Pakistan.
Hence the said amount, therefore, never hits Pakistan’s economy as an investment, and goes from the Chinese government or state-owned company to a state-owned company within China to pay for equipment. Even the Chinese workforce gets its salaries deposited into bank accounts within China.
The money, in other words, stays completely within China and so never shows up as foreign investment into Pakistan, however, gets shown up against Pakistan’s name, to depict as a boost to Pakistan’s economy, using Moody’s dubious and error-induced rating archetype.
OBOR is a plan for Chinese policymakers to address the excess capacity and transferring their bad loans to Asia/South East Asia. That way they convert the rogue loans to economic ownership, ten years down the line, projecting military might, to subvert the economic layer of the country, to own economic design and advantage.
Touted as a global partnership by China, OBOR is actually an exploitative, colonial stratagem to gain vital assets in small countries. In case of Pakistan, what has been economically unviable for so long, given the cost-sharing between state and private enterprise, now suddenly becomes viable? This is due to Chinese taking profits home, all but neigh. As well as the lack of global business ethics built into OBOR and CPEC, there shall not be any safeguards build into this arrangement, for the world to get Pakistan out of this pit, any time in future.
Moody’s Googly Report
Few years ago, like previous numerous occasions, the agency was fined for issuing false credit ratings that eventually led to the market crashing in 2008. A study found the Credit Rating Agencies (CRAs) are for-profit businesses. They get paid through back channels and even via front lobbyists, to carry out studies in their favour. Following are conclusions on their credibility:
- Inflated CRA ratings are a large cause of the financial crisis.
- Issuers pressured CRAs to inflate ratings to help sell their structured products at a higher price.
- Regulators wrote a regulation that encouraged CRA ratings inflation; though this was not obvious when they were written.
- Many investors cared more about higher rather than accurate ratings since it allowed them to take more risk.
- The CRAs sacrificed rating integrity to cut costs and make more money.
In this context, that’s a sure way to make Pakistan’s Bajwa regime look credible, having the smokescreen of a Miracle Recovery of Pakistan Economy, and to Fizzle out Fazl-ur -Rehman protests and other sensible questions posed by Pakistan public on Bajwa Doctrine and Colonization by China.
While above colonization of Pakistan by China is now initiated, how the state of affairs going to be, is the underlining question. ‘China model’ has off late been the demand orchestrated by China lobbyists, in a seemingly harmless bid to have Chinese footprint on Pakistan’s economic and strategic decision-making. China’s actually existing political system (what drives its well-publicised growth story) is considerably shrouded in clandestineness in mainstream political conversations across Pakistan. Print and electronic media doesn’t report on China’s domestic politics, and it rarely reveals any insight into the shady alley down of Chinese economic growth. While this is in interest of China, it will have a Pakistan Colony, similarly and easily governable, it misses out on two essential counts. Chinese society is repressed, except in ways that suits current economic-security paradigm. Hence it is not given to enterprise, but supervised living. Secondly, other than mainland Han ethnic populace, rest all regions are essentially already Quasi-colonies, now and since long. They cater as workforce and resource-rich lands are exploited in a most unabashed manner. Uighur model is a far easy picture, compared to what is in store for common Pakistani, in future.
Options, even if Pakistan has had, while it could have held its Military-Political nexus at bay, were probably three. You would either have corruption greasing the wheels of a corrupt bureaucracy in a rigid architecture propelling growth or secondly, you can have an honest bureaucracy in a liberal & free-market architecture promoting growth, latter is what all upcoming countries including India are striving to be. But when you have a corrupt bureaucracy & excessive red tapes, economic stagnation will be the only result.
Past quarter of a decade, China was at the right place at the right time, disregarding the stigma of “labour camp driven” industrial growth, and stolen dubious and substandard technology. This isn’t about to repeat anywhere in the near future, not for China and not for Pakistan. Where latter shall be led down to, is prostrating itself in front of the dragon. While Central Asia and South East Asia shall labour along with the Chinese manufacturing debt for generations, Pakistan shall be the Economic Colony of China, to manufacture ship and garner revenues, using resources of Pakistan. Its future will be sweatshops/labour camps drafted from the local population of Pakistan, with the given China Model in place, while claiming such like Moody’s Ratings and other bogus paid data, as has been the case in various repressed provinces of China.
03 Dec 19/Tuesday Written by Fayaz