OPINION:
A major problem of less developed countries is that their dependence on commodities lends itself to greater corruption — the so-called natural resource curse. Resources in the ground are there to be exploited and require only control of the ground above them to monetize them. The technology is relatively fixed and offers people in these countries few opportunities to better themselves and their nations by moving into more sophisticated economic activities.
What is true for commodities is also for strategic territory. The China-Pakistan Economic Corridor (CPEC), a 3,000-kilometer sea- and land-based project aimed at creating safe passage for energy and oil transport, is a classic case of how China’s economic influence has created difficulties for Pakistan due to its dependence on Beijing.
Cutting through the well-meant wordage that poured out after Pakistani Prime Minister Shehbaz Sharif visited Beijing and met with President Xi Jinping, it is easy to discern that China, on reviewing what CPEC has achieved so far, has become acutely cautious of Pakistan’s inability to fulfill its obligations due to the latter’s internal incapacity and external pressures against the project. Given the uncertainties in Islamabad, Beijing introduced a significant quid pro quo for the project.
Most importantly for Mr. Xi, the security of China’s personnel and projects is a top priority for Mr. Xi given that 2022 has witnessed many Chinese casualties and security lapses at CPEC projects and on Chinese cultural institutions in Pakistan that Beijing was forced to close.
Pakistan has raised a full army division and is increasing the paramilitary security infrastructure along the CPEC projects, but this is unlikely to be sufficient to safeguard them. Pakistan has failed to calm the turbulence in its Pashtun and Baloch provinces, where there is major resistance to the project and little expectation that this will improve. China had hoped that after Imran Khan, Mr. Sharif’s predecessor, all but stalled CPEC projects through bad management and demands for renegotiation of prices, terms and conditions. Beijing is loath to make these revisions.
Mr. Sharif is desperate to sustain the project his elder brother Nawaz began. But the future of Mr. Sharif’s government itself is tied to the ongoing protests by the ousted premier Mr. Khan, who wants a snap election. Even if the vote is not held, Pakistan is due for national elections next summer, and the political turmoil that they will generate is likely to be substantial.
As a geopolitical rival of the United States, China also realizes Pakistan cannot do without the U.S., which holds the International Monetary Fund’s purse strings. For the same reason, Islamabad cannot ignore Washington’s view that the CPEC terms should be renegotiated, and its warning against using IMF funds to service CPEC debts. Thus, there is considerable distrust in Pakistan regarding the CPEC relationship.
The difficulties with CPEC provides a major opportunity for the U.S., Japan and other allied states. As Pakistan well appreciates, trade and economic deals with the CCP are quite different from owing it to Western banks or the IMF and World Bank. CPEC is only an example of how China is perfectly willing to tempt poor countries into borrowing lots of money, and even, when those countries have trouble repaying this money, in essence colonizing parts of them — for example, with Sri Lanka’s Hambanthota port and the military base in Djibouti. The West is a far better economic partner than China because the West is democratic, and Western firms are subject to their oversight and pressure from media and the public.
Western aid may be deployed strategically to offset Chinese influence in Pakistan.
In the current fiscal situation, the U.S. cannot hope to match China in total aid or loans provided. But it can leverage its historic openness and relatively welcoming attitude toward foreigners to give these recipient countries a much better chance at a better future to develop, as have South Korea or Taiwan.
In addition, developing countries should not enter economic relationships with China due to the prodigious risks associated with it. Before signing their countries over to China, countries like Pakistan should take a page from the “nonaligned” nations during the Cold War and ensure that Western firms are present and receive government support to counter Chinese economic influence.
The curse that comes from natural resources or strategic territory cannot be avoided by states like Pakistan, but they can be more adroit about how they address the consequences.
• Jianli Yang is founder and president of Citizen Power Initiatives for China and the author of “For Us, the Living: A Journey to Shine the Light on Truth.” Bradley A. Thayer is the co-author of “Understanding the China Threat.”
Please read our comment policy before commenting.