Abstract

China-Pakistan Economic Corridor is a strategic game-changer development projects both for China and Pakistan with varying interests. For the successful implementation of CPEC, various cooperation mechanisms were signed between China and Pakistan. This cooperation mechanism has been perceived differently by different stakeholders. The mechanism of cooperation seems like a complex phenomenon due to the interest articulation and contradictions of the capitalist model of cooperation. Moreover, cooperation also needs adaptation to produce and reproduce capital in the case of CPEC related projects. An attempt has been made in this paper to explore the mechanisms of cooperation on CPEC. Who is benefiting from this cooperation? And how this cooperation mechanism is being translated into a project of 'game-changer.' In a capitalist structure, the control over means of production and private ownership creates a nature of competition protected by existing institutional arrangements to strengthen a structure of profiteering. Cooperation is totally opposite to competition, and primarily it depends on the socialistic principle of sharing and caring.

Key Words

Developmental Cooperation, Politics, CPEC, Pakistan, China

Introduction

The present chapter throws light on various co-operational mechanisms signed between China and Pakistan and their impacts on the decision-making process of CPEC. Level of co-ordination and overall planning in which CPEC related issues and planning are discussed. Co-operational mechanisms have been discussed on the state-to-state interaction between Pakistan and China on CPEC, and further, this study has been an exploration of Pakistan's constitutional and administrative mechanisms with its federating units. China-Pakistan's economic, strategic partnership is deeply entrenched in infrastructural funding gap, i.e, US$ 26 trillion through 2030, which is estimated by Asian Development Bank (OECD, 2018). To address this funding gap, various proposals were initiated to develop better transport connectivity within and across Asia. (www.beltroad-initiative.com). Association of Southeast Asia Nations (ASEAN) connectivity initiative, Greater Mekong Sub-Region (GMS), Cooperation program, The Central Asia Regional Economic Cooperation (CAREC) program, and the Belt and Road Initiative (BRI) were the major initiatives to address this gap. But how bridging this gap will add to transform the lives of masses at large? This question seems a major challenge towards co-operational mechanism over CPEC.  




China Belt and Road Initiative and CPEC




CPEC, which is a significant development project between Pakistan and China, is one out of six (6) major economic corridors of Belt and Road Initiatives. i.e, "The (land-based) Silk Road Economic Belt", comprising and 21st Century Maritime Silk Road". (www.beltroad-initiative.com). These six major corridors areas "China – Mongolia – Russia Economic Corridor (CMREC), New Eurasian Land Bridge Economic Corridor (NELBEC),China – Indochina Peninsula Economic Corridor (CPEC), Bangladesh China India Myanmar Economic Corridor (BCIMEC), China-Central Asia – West Asia Economic Corridor (CCWAEC) and China-Pakistan Economic Corridor (CPEC)"

Progress on these routes is shown in the following diagram. 




Source: Yu, C., Zhang, R., An, L., & Yu, Z. (2020). Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?. Sustainability, 12(17), 6747.




As per OBOR master plan, 'the 21st Century developmental project' connects.

China to Southeast Asia, India, Indonesia, Somalia, Europe, Arab Peninsula, and Egypt through, 'Maritime Silk' which encompasses the Strait of Malacca, South China Sea, Gulf of Bengal,  Indian Ocean, including Red Sea, Arabian Sea, and Persian Gulf. The Polar Silk Road and its connectivity with other corridors like '21st Century Maritime Silk Road' China's Arctic Policy and global developmental outreach. (hwww.beltroad-initiative.com/) is reflected in this map.




Source: Belt and Road Initiatives, www.beltroad-initiative.com/




The BRI developmental initiatives were started in 2013 by the president of China XI-Jinping, and on 2016 it was called "OBOR-One Belt One Road". The aim of this project is infrastructural development and economic integration along the historic silk route. With the authorization of "National Development and Reforms Commission (NDRC)", State Council of China,  the Ministry of Commerce (MOFCOM), and the Ministry of Foreign Affairs  (MOFA) of the "People's Republic of China (PRC)" have designed its official structure.

According to this strategic developmental outline, "the BRI is based on five cooperation mechanisms including improvement of connectivity of infrastructure, policy coordination, unimpeded trade, people to people contacts and financial integration. A group of promoting and implementation of BRI under the National Development and Reform Commission (NDRC) is responsible to manage and oversee BRI initiatives under the chairmanship of Han Zheng, Executive Vice Premier of the State Council. Vice-premier of the State Council of China Hu Chunhua is a deputy head leading this group” (ibid).

In 2018, China State International Development Agency (SIDCA) was established, which is an implementation agency, and it is responsible for making and designing strategic policies and guidelines related to foreign aid and is accountable to the State Council. Various other sub-agencies are also involved in the implementation and formulation of BRI strategic plan, which include the Ministry of Foreign Affairs(MOFA), National Development and Reforms Commission (NDRC), "The Ministry of Commerce (MOFCOM), and the Ministry of Culture (MoC)." (Belt and Road Initiatives, 2015). The major financiers and funding agencies are Policy Banks which include China Development Bank, Chinese Agriculture Development Bank, Import and Export Bank of China. Moreover, international financial institutions and state-owned banks are involved in this project. In terms of debt trapping and debt stress (Khaleeq Kiani, 2018), there are severe reservations and criticism on OBOR initiatives. Currently, in global order, there are 23 countries that are under BRI debt stress, including Pakistan. (https://www.cgdev.org). The high-interest loans of China have turned under-developed countries into debt trap. The major example of the Chinese debt trap as Sri Lanka, which borrowed billions of 301 million US$ from China on 6.3% interest rate for domestic infrastructural development and Hambantota port project. Currently interests rate is o.25 to 3% from Asian Development Bank-ADB and World Bank. The Sri Lanka's national debt is approximately $64.9 billion, in which $8 billion USD is to be paid to China due to her share in interest rates. Some commentators also predicted that Pakistan is also heading towards similar directions as it has received heavy loans from Chinese banks at considerably high-interest rates to invest and finance the CPEC. Some consider it developmental colonization in the form of 21st century East India Company. It is anticipated that Pakistan will take approximately forty years to return these loans. The special economic zones (SEZs), which are situated along the side of CPEC, have apparently been allocated to Chinese companies. "Gwadar 300 Mega Watt power plant (coal) was given to Chinese Communications Construction Company without giving any opportunity to local companies to bid. Pakistan's link with a deep-sea and warm water, Gwadar port is considered a critical link between the significant One Belt One Road Initiative and Maritime Silk Road projects".( https://www.efsas.org)

In addition, all domestic markets have been packed with low-cost Chinese products, which resulted in the closure of approximately 200 Pakistan's textile mills. Moreover, China also hired a workforce in the developmental projects that were funded by it. Chinese companies are little supportive of hiring domestic workers from Pakistan to work on CPEC projects. Moreover, all monetary assistance is provided in the form of loans that have to be returned. China is getting greater political leverage on bargaining on debt burden over the smaller states. Keeping in view the debt trap fear, China assured that it will not force Pakistan in debt repayment if needed. 

Pakistan and China Co-operational Mechanisms on CPEC

China’s role in developing countries has increased rapidly through its harmonious

and noninterventionist policy which has attracted the attention of the developing world to articulate their interests in the developmental sphere. Here an attempt has been made to explore perceived implications of Chinese collaboration in Pakistan on CPEC. Further, it will also explain the "meaning" of the project for both the states, how do both 'states' perceive this project? Why? An exploration of the strategic significance and importance of the CPEC for Pakistan and China is significant to understanding the politics of federation and even regional politics in South Asia. Internal cooperation model is shown in the following diagram.




Source: https://www.kict.re.kr/menu.es?mid=a20502000000




China's economic rise in global order has been projected as a parallel rising economic power along with the west and the United States of America in a global context. The Chinese discourse of harmonious co-existence, mutual benefits, and policy of non-interference has been adopted to engage with CPEC. The political and economic structure of China and Pakistan are the basic parameters to understand the co-operational mechanism on CPEC between the two states. How China-Pakistan Economic corridor has been materialized and conceived in the milieu of the political and economic context of Pakistan? And why does Chinese foreign policy matter in terms of realist and neo-realist perspectives? These are significant questions that are being addressed in this study. Pakistan turned towards CPEC due to multiple reasons. 



At the initial stage of CPEC, one significant reason among many others is electioneering. Pakistan Muslim League-N was a ruling center-right political party after the 2013 elections results.  PML(N) assumed political power after its electoral victory in general elections 2013 in National Assembly. In the 2013 election campaign, the major slogans were around debt repayment, a strong economy, and infrastructural development. This election campaign was primarily to boost up the development agenda through political communication in the region. The marketing of 'development and economy' through electoral campaigns had sold out representation to neoliberal forces (Small A, 2015).  Developmental plans related to special economic zones as shown in the above table. 

Developmental plans related to industrial zones, road infrastructure, and resolving energy crises need finances that could not be met locally. Therefore PML-N government turned towards China to address its electoral promises. At this stage, "China was also looking around to formulate an economic policy that can persist China's growth for next three decades. At that time, China was looking to initiate an integrated South Asian infrastructure that could connect interior parts of China to the Indian Ocean through Gwadar Port. The investment on infrastructural development had become a precondition for promoting and maintaining economic growth rates in newly emerging provinces of Xinjiang and Yunnan".(Small A, 2015). To meet these developmental requirements, China came out to find collaboration from Pakistan and India. In this regard, Prime Minister of China Mr. Li Keqiang first traveled to India with this important proposal, but India aligned its economic collaboration with Japan and gave a cold response to the Chinese offer. 

Moreover, India objected to CPEC on two major grounds; one is that it considers CPEC as a threat to its security and other its sovereignty as it passes through disputed territory of Pakistan Occupied Kashmir (Historically GB is a part of Kashmir). Indian joining in CPEC means giving legitimacy to Pakistan’s rights over disputed territory. (Asia Times Financial, April 01, 2020). After this visit, the Chinese premier visited Pakistan. However, at this stage, convincing and persuading China to extend investment in Pakistan was "an easy task for the PML-N government. Chinese initiatives had remained weak in the past due to the lack of political will of incumbent regime". (Small A, 2015). Pakistan's government commitments and assurances were to resolve Chinese reservations. Mr. Li visited Pakistan on May 22, 2013, with the same ambitious developmental proposal which firstly it offered to India for resolving Pakistan's energy crises and regional connectivity. Pakistan's military and civil command welcomed Chinese Prime Minister Mr. Li with high diplomatic gestures. From this visit, the Xinjiang-Gwadar idea of connectivity was taken up. China was also ready and showed a willingness to support Pakistan in resolving its energy crisis through the construction of coal power stations, hydro-electric dams, and nuclear energy power plants. 

Development plans, ideas, and agendas were prepared, conceived, and materialized. In this visit, various plans were coined and got approvals from the relevant authorities. Due to the security situation in Pakistan, this was not an easy task. The central tension during this period was terrorist attacks on CPEC workers on proposed developmental sites. "The Chinese worries were received with promises and commitment by the PML-N government to make developmental execution of CPEC smooth and safe. China decided to step carefully took start with small projects". (ibid). It is important to know that despite propagating CPEC as a strategic and economic partnership, the trade relationship between China and Pakistan is reflected in the graph.







Graph showing Pakistan-China Trade relations

Source: Source: Sushant Sareen, 2019


Despite the past week's trade history of China with Pakistan, Pakistan tried to minimize China's concerns and assured her to invest safely by giving out all worries of China. A responsibility of terrorist bombs attacks in Tiananmen Square in Beijing on October 28, 2013, were accepted by Turkistan Islamist Party (Dalakoglou D, 2010), which was a wake-up call for China to turn closer to Pakistan. “This attack was further followed by bomb and knife attack in Urumqi and Kunming railway stations that indicate spread of terrorism in China’s remote northwest to its urban centers” (Small A, 2015).  In 2009, the situation in Chinese Muslim’s dominated area Xinjiang became worse. Muslim Uighurs in Xinjiang and Hans Chinese situation compelled China to move towards Afghanistan and Pakistan. (Pant, 2012). China considered that stability inside China rest in the stability of regional countries. “Pakistan is vital to Chinese economic interests and to expand its influence in the region. However, it did not change anything for the major developmental projects in the process. China tried to begin putting pressure on the security establishment of Pakistan for a crackdown on Uighur militants in North Waziristan” (Small A, 2015).

Moreover, “the political tussle between the military establishment and civilian government led to thwarting delays in reaching a consensus. However, in spite of their differences, one point on which the Pakistani military and civil leadership agreed upon was the value of China-Pakistan friendship, which has promised an initial influx of 46 billion US$ that can transform the elitist Pakistani economy. As the pressure from the Chinese government intensified, Raheel Sharif finally launched a military operation in North Waziristan. However, the decision to deploy military troops in North Waziristan was triggered by some other factors related to security situation and terrorism in Pakistan." (Pant, 2011). It was security concern that became a major factor behind Chinse tilt towards Pakistan.  Further, there were some other economic reasons that also became a push factor on the Chinese part to develop and strengthen its collaboration with Pakistan. During the last twenty years, China has further boosted its global outreach and presence. For achieving this end, China had struggled a more practical role in creating the diplomatic links with other countries. "Pakistan presented itself as a good friend with China, and in response, China also showed friendship with Pakistan, and this friendship was propagated as higher than Himalaya and Deeper than Ocean" (Shambaugh DL, 2013). This friendship was a welcome change for Pakistan's political and military elites, and others gave alternative offers to the state of Pakistan that is experiencing a deteriorating relationship with the United States (Small A, 2015). Public support for the China-Pakistan relationship is also welcomed by the majority of the people in Pakistan (Chandra, 2016). “According to the Pew Research Centre survey of public opinion about China in Pakistan, 84 per cent of the respondents held a positive view about China, compared to 16 per cent for the US. The survey shows that Pakistan is most pro-China country in the world” (Chandra D, 2016).

On the other side Pakistan have also deep motivations to strengthen its relationship with China in post 2010. During this period USA seems reluctant to collaborate Pakistan in in its peace initiatives in the region. US and Pakistan relationship turned down due to its tilt towards China and created an economic stress after US withdrawal from Afghanistan. Since its inception in 1947, Pakistan has been highly dependent on external aid, particularly from USA. US was a major donor for Pakistan and its economic support was utilized for economic development of the country. "USA economic aid played a significant role in the high growth rates which was achieved in the 1960s, by Green revolution and Industrialization. It gave momentum to industrialization and helped to combat food insecurity.” (Zaidi SA, 2011). The development boom in Pakistan during the 1960s resulted in a major inflow of external capital which led to infrastructural and institutional development, particularly development of agriculture and other social services. (Khan MA, and Ahmad, 2007). Green revolution in Pakistan was also the result of this aid given by international financial institutions and backed by the USA. The unstable relationship between USA and Pakistan became a factor that led Pakistan to shift its policy towards China.  Graph showing US Assistance to Pakistan.






Source: Sushant Sareen, 2019 


Later, the military ties with the United States in the cold war and ideological alignment increased the flow of external aid which caused domination of military. This domination as a result of US through external aid and its nexus with neoliberal development (Zaidi SA, 2001).  The foreign aid increased during Afghan War against Soviet occupation. During cold war and Russian occupation in Afghanistan, the USA extended full military and financial support to Pakistan to fight USA war against Russia in the battlefield of Afghanistan (Cooley J, 2010). Since, “the training and funds were not to be given directly through the (CIA) Central Intelligence Agency, but through military in Pakistan. Military establishment accumulated enormous power during the period of Afghan War” (Khan, M. A., & Ahmed, A. 2007). During conflicting period in Afghanistan, Pakistan military upgraded its apparatus and security and managed it at the cost of sectarianism, terrorism, refuge crises, rising debt servicing expenses and a deteriorating economy. (Hilali AZ, 2002). US-Pakistan economic relations remained tense in the 1990s; but these fluctuating relations turned towards a new direction during United States' War on Terror. US gave aid package to Pakistan to fight US war against terrorism outside and within its borders (Qazi SH, 2012). The following graph shows the history of economic aid to Pakistan.

The social and political impacts of this war on terror inside Pakistan has been catastrophic. The security establishment of Pakistan apparently refused to fulfill US demands due to provision of refuge to the Taliban as its strategic interests (Khan, M. A., & Ahmed, A. 2007). “Civilian government too has been put off by the increasingly chaotic nature of the aid. Disappointed by Pakistan’s performance in fighting terrorism, the US announced to delay and cancelled the promised aid”. (Naviwala N, 2017). Graph showing the details of Chinese and American Assistance to Pakistan.


Source: Sushant Sareen, 2019.


Resultantly, Pakistan has also suffered from the withdrawal of US armed forces from Afghanistan. US policy makers further started questioning the effectiveness of aid given to Pakistan to counter-terrorism (Zaidi SA, 2011). In follow-up US military action against Taliban and Osama Bin Laden at Abbottabad in 2011, an immense global pressure was exerted on Pakistan and its role to fight against extremism in its jurisdiction. At this critical time in the history of Pakistan, it was China who came forward to rescue it from this difficult time. (Pant HV, 2012). China extended significant importance to Pakistan and called it, "all-weather strategic partner". The data regarding this friendship is presented in the above graph.
As the recent data on economic transaction related to CPEC is not yet clear to analyze the overall situation. As per above mentioned detailed facts, it can be concluded that there are three major interests that shapeup the idea of CPEC. First are developmental related electoral slogans of PML-N. The second is economic and political motives of military and third one is Chinese global and regional interests. These converging interests manifested in materialization of CPEC. The strategic convergent interests with geo-economics turned China and Pakistan together and old geopolitical context of Pakistan now turned towards divergent relations with the USA. 

Pakistan’s Constitutional Co-Operational Mechanism with its Federating Units

Council of Common Interest (CCI) is supreme constitutional body established under article 153 of the 1973 constitution of Islamic Republic of Pakistan. The main purpose of this council is to regulate finances amongst federating units. In organizational mechanism, Prime Minister of Pakistan is a chairman with four provincial chief misters as members along with Minister for Inter-Provincial Coordination, Minister for Planning, Development & Special Initiatives, and Minister for Power Division as members. 

 However, it is obligatory for the Council to meet once in ninety days after the passage of the Eighteenth Constitutional Amendment. As such, the CCI has held 30 meetings from 2010 to 2019 (http://www.ipc.gov.pk/), in which distribution of resources related to CPEC were slightly discussed. China has also shown concern over delaying overall project management tactics, in particular involving different ministries. They envisaged the establishment of a separate ministry or authority to deal solely with the CPEC. Military leadership was also interested in taking on a formal role in project monitoring and implementation, as the corridor was crucial to the economic and strategic interests of the country. “Therefore, we are ready for any role that will help make it a success.” (Daily Dawn, July 18, 2016). 

A special division has already been created by the Army to provide security cover for CPEC related projects. Chaudhry Nisar Ali Khan, an Interior Minister met GengHuichang, a Chinese Minister for State Security. During the meeting, the two parties agreed that security and timely implementation of the CPEC would be given top priority (Daily Dawn, July 18, 2016).  The Senate Committee suggested that, pending the establishment of a new authority to oversee the corridor's affairs, the project's control be handed over to the Council of Common Interests (CCI), which oversees matters involving the provinces but has not materialized. Policymakers also stress CCI's importance for achieving project transparency and efficiency (Business Standard, 2018).

Administrative Co-operational Mechanism

The operational aspects of CPEC are based on administrative cooperation mechanism. In May 2015, a parliamentary Committee on CPEC was formed by Prime Minister of Pakistan after an all-party conference convention. Mr. Mushahid Hussain Syed, a former PML-N member now close to both the military and China and a consensus-builder in the Senate of Pakistan, was unanimously elected as chair. A special Parliamentary Committee on CPEC was formed even there was already a committee i.e. Senate Special Committee on CPEC existed. Both committees have a supervisory role, but the Parliamentary Committee appears to adopt a more critical approach to building consensus and the Senate Committee, having already published three reports on the corridor project involving a significant amount of field visits by committee members. 

The handling of CPEC by the PML-N government has been criticized not only by opposition political parties but also by the Pakistan Army, even though civil-military relations have been tense since Nawaz Sharif's return to the prime minister's office in 2013. After handling the war with the Taliban, relations with neighboring states and allegations of corruption, CPEC has figured only as a secondary source of tension. The involvement of military regarding the security of the country, Pakistan’s security expanded under the government of PML-N and now in PTI government, it reached to the climax. The functional diagram of CPEC is as:



It has led not only counterinsurgency operations in former tribal areas in North Waziristan and other parts but also urban counterterrorism and counterinsurgency operations in Karachi. The army has had a powerful influence on operations in all provinces targeting organized crime and corruption as well as terrorism through what are called provincial "apex committee." The military also has a high control in Balochistan, both leading counter-insurgency operations and building road networks and connecting Gwadar upland through the Frontier Works Organization. Hence its role in CPEC, which crosses areas affected by insurgents, is critical. Major General Abid Rafique from the military is heading the Special Security Division of CPEC. Former Chief of the Pakistan's Military Raheel Sharif had guaranteed security for CPEC personnel on numerous occasions, especially after India's tough response to CPEC (Daily Dawn, July 18, 2016).  

The army’s role in CPEC, though, has gone beyond security. Through occasional media talks, it has either expressed its dissatisfaction and concerns over the handling of CPEC by the government or sometimes urged for a greater role to play if not dominant role in overseeing the implementation of CPEC. On August 1, 2016, a Pakistani journalist widely believed to be close to Inter-Services Intelligence, Mubashir Lucman, hosted a talk show on CPEC whose discussion was primarily focused on civil-military tension and CPEC. In the very same programme, Mr. Salman Shah, who served as Finance Minister during General Pervez Musharraf's government's military rule, said that CPEC needed its own independent authority. The military undoubtedly carry out critical CPEC logistics through National Logistics Cell, road network development, through the Frontier Works Organization, and security responsibilities. Eventually, the military got legitimacy to control CPEC on the issues related to securitization, insurgency and attacks on the Chinese personnel working on CPEC. 




Critical Analysis: Who Benefitted from these Co-operational Mechanisms? Why?

The major benefit goes to those dominant forces who managed to take control over CPEC projects through multiple national developmental narratives including securitization, insurgency and attacks on the Chinese workforce. Pakistan's military establishment pursued the narrative of this development project as a supreme national interest. The CPEC benefit in Pakistan goes to those who ruled it. 



Source: Zafar Ullah Khan, Future of Pakistani Federation: Case Study of the Council of Common Interests (CCI), 2015




The CPEC authority seems to have all financial and administrative control through a Presidential Ordinance. Keeping in view the China’s concerns over the slow progress of developmental projects also led to setup CPEC authority led by military establishment. The establishment has central political position in Pakistan's history and henceforth got control over the administrative affairs of CPEC. For about half of its existence, the Military establishment has ruled Pakistan and is subsequently considered a classic example of a "praetorian state in which military bureaucracy controls political representation" (Perlmutter, A. 1969). The security establishment of the country considers itself as the sole guardian and protector of national sovereignty and moral integrity, the chief architect of the national agenda including economic and political and the great mediator of conflict between political and forces. Moreover, "civil rule has always been structured to be characterized by unrestricted and persistent struggles of power between government and opposition. There have been continuous different political tensions in the center and provinces, combined with autocratic styles of governance, mismanagement and corruption. This caused to develop a situation in which civilians lost public trust and support and the security organization regained its reputation, popularity and moral legitimacy to intervene directly in political affairs" (ibid). Subsequently, the security establishment was successful in promoting the perception that civilians could neither establish a sustainable and functional government, nor be able to run the affairs of the state. It enabled the security forces to take control of the national narrative regarding the socio-economic and political interests of the country. So the way in which the CPEC becomes implemented not only limits civilian decision-making power but also minimizes civilian control over the military establishment. Bearing this in mind and observing the development of the CPEC and its respective projects, one cannot help but feel that history is repeating itself. Critics and researchers are of the opinion that the due share of the smaller provinces might be sacrificed, and the least developed regions might be further neglected for securing the interests of the traditional ruling elite. So the fruits of the multi billion projects would be once again harvested by the power groups and the dominants, and it would further strengthen the domination of the dominants.

Conclusion

Co-operational Mechanism on CEPEC is a complex issue that has been analyzed within constitutional, administrative, political and economic perspectives. As the constitutional mechanism is directly linked with the supremacy of representative government in the centre, that's why this concept has weak footing in the dominant control of military establishment over-representation being a characteristic of praetorian state. Political management and resource distribution through the Council of Common Interest was considered as un-conducive to rapid development in CPEC and by considering Chinese reservation over slow progress turned CPEC control towards military establishment. This increasing and centralized role of military establishment in CPEC related affairs would further strengthen the central control which may not appropriately address the aspirations and expectations of the smaller federating units of Pakistan. 

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