Wednesday, August 4, 2021

US Warns Pak On CPEC

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Ever since its launch in 2013, China’s Belt and Road Initiative (BRI), particularly the China-Pakistan Economic Corridor (CPEC), has caused anxieties in India as it infringes on India’s sovereignty in addition to causing concerns on a rules-based order in the region. Taking a principled and firm stand, India has opposed the CPEC. As a matter of fact, it was the first country to oppose the BRI and is the only country that has not sent any representation to the two Belt and Road Forums held previously in China. India’s position on the BRI has been consistent since 2013. It has been expressing its reservations against the BRI-flagship corridor-CPEC, which passes through the Pakistan-occupied Kashmir (PoK). India’s official position is, “The inclusion of the so-called CPEC reflects lack of appreciation of India’s concerns on the issue of sovereignty and territorial integrity.”

Not only India but several other countries have also expressed dissatisfaction about the BRI particularly the CPEC. The United States has shown its discontent over the corridor. Alice Wells, the acting Assistant Secretary of State for South and Central Asian Affairs, while giving her remarks on the CPEC at Washington, DC-based Woodrow Wilson International Center for Scholars, stated, “India has been crystal clear from the outset that they saw the geopolitical nature of elements of the BRI. We share India’s concerns over projects that do not have an economic basis and that lead to countries ceding sovereignty.”

“China-Pakistan nexus and CPEC in particular infringe on the sovereign rights of India”. Ms. Wells’ statements are reflective of the common perception of India and the United States of the BRI and China’s overtures in the region. This shows an alignment of interests and shared concerns. India along with Japan is already attempting to provide a credible, lasting and just alternative to several countries to the BRI. The Asia-Africa Growth Corridor (AAGC) and the recently signed agreement with Sri Lanka to develop a deep-sea container terminal at Colombo Port in collaboration with Japan are two important examples in this context. United States is also willing to join the bandwagon.

Ms. Well’s comments may also be analysed from the perspective of a fast-growing Indo-United States partnership. The visit of the Indian Prime Minister Narendra Modi to the United States in September 2019 and the subsequent outreach of India’s Minister of External Affairs, Dr. S. Jaishankar to the American strategic community have played an instrumental role in advancing the ties between the two countries, conveying each other interests and expectations, and facilitating the future course of trajectory in the relations. Growing bonhomie between India and the United States as strategic partners has emerged as a factor in making United States’ policy makers understand the grave challenge faced by India from the China-Pakistan axis.

Among other comments, the acting US Assistant Secretary of State also highlighted on the potential risks of the CPEC on Pakistan’s economy and the long-term feasibility of the corridor for Pakistan. She emphasised that China is not following just financial practices which can make Pakistan debt-trapped. Ms. Wells clearly mentioned that it is not a mutually beneficial project and only benefits China. In 2019, Pakistan’s economy grew at 3.3 percent rate, and its expected growth rate for 2020 is 2.8 percent.

CPEC is a multibillion-dollar project, which has also increased Pakistan’s external debt. In 2018, Pakistan’s external debt was amounted to US$ 105 billion, whereas its GDP was US$ 312 billion in the same year. In May 2019, Pakistan signed a bailout agreement of US$ 6 billion with the International Monetary Fund to stabilise its economy. Additionally, it has sought funding for the CPEC and other BRI projects from countries such as Saudi Arabia. While Chinese and Pakistani officials have rebuked Ms. Well’s comments on the CPEC and heralded it as a ‘game changer’, the project is proving to be unsustainable for Pakistan, whose economy is already in shambles.

Script: Sana Hashmi, Strategic Analyst on China

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