Monday, 8 May 2017
CPEC, Gilgit Baltistan and Pakistani economy. Dr Shabir Choudhry
CPEC, Gilgit Baltistan and Pakistani economy.
Dr Shabir Choudhry London 07 May 2017
CPEC is, no doubt, a big project with many dimensions and many targets. It is hailed as a ‘game changer’. However, debate still goes on in Pakistan and around the globe, in whose favour the game will change, as a weak partner in any game, trade or pact does not dictate terms or win the game.
Many critics argue this mega project will start from an occupied territory (East Turkistan, in view of many local people is occupied by China), and will enter another occupied territory, Gilgit Baltistan occupied by Pakistan; and will end in Balochistan, which, in view of many local people is also an occupied territory. This ground reality, ignored by powerful people in China and Pakistan could be very important for the success or failure of the CPEC.
The CPEC has some obvious advantages. Some people and companies will become very rich in China and Pakistan; however, very few people talk about disadvantages which will have a great impact on all citizens of Gilgit Baltistan, Pakistan and the region. The powerful and those who are to benefit from this mega project ensure that every critic of the CPEC is silenced or is projected as enemy of Pakistan; and in some cases, an agent of India or some other countries.
Many people talk about situation in Balochistan, and what impact it may have on the CPEC projects and future convoys going to the Gwadar port. It is imperative to note that the situation in occupied Gilgit Baltistan is also not satisfactory because of these reasons:
1/ People of Gilgit Baltistan, despite iron fist control of Pakistan since 1947 and systematic brainwashing of the people, there is a strong resentment against Islamabad; and people as a last resort, may be inclined to pick up arms, as people of the Indian occupied Kashmir have done.
2/ Gilgit Baltistan is a disputed territory, and is part of the former Princely State of Jammu and Kashmir. India claims this territory belongs to them, because the Maharaja of Jammu and Kashmir acceded to India. Not many people take this claim seriously because, the parts of Jammu and Kashmir State under the control of India is also considered as disputed.
In any case, India only pays lip service to its claim that territory of Gilgit Baltistan and so called Azad Kashmir belongs to them; and practically takes no steps to get these areas back. Moreover, India doesn’t seem to be concerned about plight of the people who live here. If New Delhi seriously and sincerely regarded these people as their own people, then they would not sit idle and allow innocent people to suffer.
3/ Interests of other countries in Gilgit Baltistan must not be overlooked. Because of great strategic location of this region and abundance natural resources, countries like India, America, Russia, and to some extent, Central Asian countries may not like China’s military control and hegemony of this region. Already there is a strong Chinese military presence in Gilgit Baltistan; and the CPEC will provide an excuse to increase its military strength to protect its enormous investment.
This will surely enable China to protect the CPEC route; but essentially it will empower China to check and stop infiltration of Islamic Jihadi warriors who go to the Chinese troubled region of Xinjiang. China believes that Pakistani Jihadi groups who have bases in FATA and other parts of Pakistan and Gilgit Baltistan train jihadi militants and send them to China to support and lead the insurgency. Under garb of the CPEC projects and security, China will be in a position to check and monitor movements of these elements.
Furthermore, China will be in a position to counter any American or Indian move to change the status quo in Gilgit Baltistan. This move, if it comes, could well be a joint initiative of more than one country; and one can envisage consequences and significance of such move.
China knows very well that Gilgit Baltistan is a disputed territory; and Pakistan has no legal right to annex these areas, or go against the expressed sentiments of the local people. Although China does not care about sentiments of the people inside the country, but they do seem to comprehend power of the local people. It is believed that apart from investment in infrastructure, they are investing in the local politics of Gilgit Baltistan, hence some voices that Gilgit Baltistan can accede to China. This is not to suggest that China has become a democratic and caring country. They are helping Pakistan to silence dissent in Gilgit Baltistan and in Balochistan, as this will help both countries to exploit natural resources of both regions.
What leaders of Gilgit Baltistan say
It must also be noted that the situation on the Chinese side is also less than satisfactory. There is an armed insurgency going on in Sinkiang against the Chinese government; and it is because of this the Chinese have hired services of the world notorious private terrorist army – Blackwater to protect the CPEC route inside the Chinese territory.
‘Frontier Services Group (FSG), a company that helps businesses operating in frontier markets to overcome complex security, logistics and operational challenges, plans to build two operational bases in Northwest China's Xinjiang Uyghur Autonomous Region and Southwest China's Yunnan Province, Erik Prince, executive chairman of the firm, told the Chinese Tabloid “Global Times”. 1
Resentment of the local people against Pakistani moves in Gilgit Baltistan could be gauged from statements of different pro freedom leaders from the region. Abdul Hamid Khan, the Chairman of the Balawaristan National Front, and a senior leader from Gilgit-Baltistan said:
“If referendum happens people will vote for India, they never committed atrocities on us. Pakistan imposed war on us, India never occupied our land, Pakistan’s coward army gave Siachen to India”. While referring to the CPEC, he said, “People are aware Gilgit-Baltistan is disputed, by arresting few, you (Pakistan) think CPEC will be built, 42 billion will be in your pockets, it’s a dream.” 2
Abdul Hamid Khan angrily said, "If you think by arresting 10-15 people, you will be able to suppress our movement against CPEC, it is your dream. If Pakistan thinks that the Army and the ISI will crush people and make CPEC a reality by occupying Gilgit-Baltistan, it is nothing but day-dreaming…People are aware that Gilgit-Baltistan is disputed. The world knows that atrocities are committed on us.” 3
There are reports that land is acquired illegally and without paying any compensation to the local people for the CPEC projects; and this is adding to the resentment of the suffering people. Sad thing is, if people complain or protest against this injustice, they are accused of being anti Pakistan and agent of India. Some unfortunate people are facing sedition charges.
Senge Hasnan Sering, is a human rights activist and works for The Foundation for Democracy and Rule of Law for Regions in Conflict says:
“China has a huge and long-term presence in Gilgit-Baltistan and is building extensive roads, bridges and telecom networks to sustain it. The drives compelling China to develop Karakoram Corridor are diverse and mainly pertain to its economic, strategic and political ambitions.” 4
Many thinking people and experts firmly believe that there is a strong military aspect concealed under the garb of economic development project. Gwadar port is controlled and managed by the Chinese, and their military ships provide security. Also, there is a joint naval task force to secure the port and naval trade routes.
Furthermore, there is a construction of an army headquarters in Gilgit Baltistan; and regional headquarters for secret agencies of Pakistan, which will make life difficult for the local people. There will surely be more harassment and intimidation and human rights abuses in Gilgit Baltistan. Already human rights activists and political workers belonging to different parties face immense pressure and are subject to torture, imprisonment; and some face sedition charges.
In 1963 China and Pakistan concluded an agreement in which it was clearly recognised that Gilgit Baltistan was a disputed territory. In this agreement Pakistan transferred around 2000 Sq. miles of Gilgit Baltistan territory, Shaksgam Valley to China which enabled China to create a link with Aqsai Chin, which they occupied in a war with in India in 1962.
In return, China agreed to construct the Karakorum Highway to link the both countries; and which was to play a significant role in relations between Beijing and Islamabad. Both countries have many common goals; and both have been rubbing each other’s backs to advance the common agenda. However, both governments understood the disputed nature of Gilgit Baltistan and agreed that if another government was to become a legal owner of Jammu and Kashmir State, including Gilgit Baltistan, then China will negotiate the new terms with the new government about future of Shaksgam Valley. Article 6 of the Agreement clearly states:
‘The two parties have agreed that after the settlement of the Kashmir dispute between Pakistan and India, the sovereign authority concerned will reopen negotiations with the Government of the People's Republic of China on the boundary as described in Article. Two of the present agreement, so as to sign a formal boundary treaty to replace the present agreement, provided that in the event of the sovereign authority being Pakistan, the provisions of the present agreement and of the aforesaid protocol shall be maintained in the formal boundary treaty to be signed between the People’s Republic of China and the Islamic Republic of Pakistan’. 5
Solidarity with Gilgit Baltistan
Pakistan’s endeavours to illegally usurp Gilgit Baltistan is, by and large, opposed by people in all regions of the divided Jammu and Kashmir State. In this regard, political parties and civil society organisations of Pakistani Occupied Jammu and Kashmir arranged seminars, conferences and protests in many cities of POJK and in other countries, including in Britain, Belgium, Hong Kong and UAE etcetera.
Short-sighted and divided people of POJK who have a large presence in various countries of the world do not have their own media. They have to rely on the Pakistani media to provide coverage to their political activities. One demonstration which was held in London outside the Pakistani High Commission in April 2017 to protest against Pakistani attempts to make Gilgit Baltistan fifth province of Pakistan was reported by one Pakistani media channel that: ‘people of Azad Kashmir were protesting is support of the CPEC and Pakistan’.
The pro India leadership of the Valley vehemently spoke against the CPEC; and its implications on Gilgit Baltistan and the region. They also spoke against Pakistan’s occupation of Gilgit Baltistan and condemned Islamabad’s attempts to make these areas fifth province of Pakistan.
However, it was encouraging to see some leaders of the Valley of Kashmir known as separatist leaders, speaking against Pakistan’s attempts to usurp Gilgit Baltistan as that will have a negative impact on the Jammu and Kashmir dispute. Some of these ‘leaders’ decided to remain quiet as they didn’t want to bite the hand that feeds them; and has fed them for many decades.
Many people participated in a protest outside the United Nations office in Srinagar; and expressed their annoyance against ‘Pakistan Government's proposed move to declare Gilgit-Baltistan as that country's fifth province’. The participants of the protest said: "Our protest is against the Pakistan government`s order to declare Gilgit-Baltistan a fifth province. The area from Lakhanpur to Gilgit-Baltistan belongs to Kashmiris. It should be left to us", said Salim Akhthat Malik, Chairman South Asian Friends. 6 Mr Malik further said that their organisation intends to organise many more such protests against Pakistan for illegally occupying areas in Gilgit-Baltistan.
Shoaib Lone, a leader of Jammu Kashmir Forum leader expressed his views that: "Jammu and Kashmir has its own importance as per the historical point of view, but unfortunately large portions of land have been grabbed by China and Pakistan. So we are here to spread the awareness that it is our territory and we will not allow anyone to play dirty politics with our state". 7
Many critics call Pakistan’s venture to usurp Gilgit Baltistan as a `dark move’ of Pakistan to make land of Gilgit Baltistan available to the Chinese Government for the CPEC; which is one of the six key corridors under the China`s One-Road-One Belt Initiative to link Asia with Europe.
The CPEC, as I have pointed out many times in my articles, will prove to be disastrous for Pakistan, Gilgit Baltistan and the region. However, because of more than 61 billion dollars which, one way or the other, will come towards Pakistan, and political and military establishment will benefit from it; so not many people dare to speak against the CPEC or even tell the hidden dangers related to it.
I have been pointing out that the Pakistani economy will not be able to pay back this huge loan with very high interest rates. Despite lofty claims of economic progress, China, once again, came to rescue Pakistani economy. Newspaper headline explains it all: ‘China bails out Pakistan with over 1bn in loans’. The news says:
‘State-backed Chinese banks have come to the nuclear-armed state's rescue on two separate occasions, officials have told the Financial Times, with $900m coming in 2016, followed by another $300m in the first three months of this year. The loans demonstrate the perilous fragility of Pakistan's stocks of foreign currency, which have been depleted in the past few months as imports have risen while both exports and inbound remittances from Pakistanis abroad have fallen. 8
According to figures released by the State Bank of Pakistan, the country’s reserves dropped to $17.1 billion at the end of February 2017, which forced Pakistan to obtain ‘emergency loans from outside sources to repay older loans made in foreign currencies’.
This shows vulnerability of the Pakistani economy; and greatly increases Pakistan’s reliance on China. Many people question if that will force Pakistan to give up some aspects of Pakistani sovereignty; or may be lease out certain areas to China, especially from Gwadar and from Gilgit Baltistan.
Economic experts believe that despite the economic projections and expected competitiveness of the Pakistani economy, the CPEC related projects will further deplete country's stocks of foreign currency, urgently required to pay the contractors and suppliers. It must be noted that these projects require investment and they are not producing anything yet to support Pakistani economy; and there is very serious doubt if the Pakistani economy will be able to compete with the cheap Chinese products.
One Pakistani economic expert Vaqar Ahmed, Deputy Executive Director of the Islamabad-based Sustainable Development Policy Institute, said: "Technically speaking we should have gone back to the IMF in January (2017), but ministers are likely to try and wait until after the election [for parliament planned for 2018]." 9
The Sharif Government is having difficult time in office because of allegations of corruption and estranged civil military relationship is politically not in a position to go back to the IMF. According to the news, the ruling party Member confirmed that the government is reluctant to go to the IMF before the General elections.
Sad thing is it was only last year that the government returned the IMF debt which was borrowed in 2013, and boasted that they have broken the begging bowl of the IMF. For some reason, the IMF loan is ‘politically volatile’; and the government is reluctant to seek more help with that broken ‘begging bowl’.
The latest report of Moody’s Investors Service does not show a positive situation of the Pakistani economy. In its latest report, the Highly reputable international credit rating agency, Moody Investor Services has predicted that ‘Pakistan’s external debt will grow to $79 billion by June this year, higher than initial estimates suggested, and the country’s weak fiscal strength will weigh in on its ability to afford the ever -growing debt burden’.
The report further says, ‘that Pakistan’s challenges include a relatively high general government debt burden, weak physical and social infrastructure, a fragile external payments position and high political risk.’ 10 The Nawaz Sharif government is strongly criticised for adding to Pakistan’s debt burden; drop in exports and failure to bring in foreign direct investment.
Any negative impact on the Pakistani economy or in any other field, always have serious effects on the people of Gilgit Baltistan and POJK. It is because of this reason we have to take pro - active interest in issues which have positive or negative impact on Pakistan and the on Pakistani society. At times, some Pakistani and some people of Jammu and Kashmir criticise me for taking interest in what goes on in Pakistan. Unfortunately, they don’t realise that what happens in Pakistan, ultimately affects us too. In any case, more you know about your enemy, better it is for you, because it enables you to formulate appropriate policies to fight against its occupation.
The CPEC will give people of Gilgit Baltistan the following:
1/ Apart from the existing Pakistan army institutions, Head Offices, regional offices and Military Intelligence infrastructure we will have additional Army Head Office which is especially raised and equipped to protect the CPEC routes; and which will ensure that there is no danger to any of the CPEC projects. Of course, they will also have their own intelligence network and offices etc.
2/ Apart from the Pakistani secret agencies’ existing offices, torture centres, secret or safe houses, compounds, facilities, infrastructures, and equipment, they will have additional offices, training and equipment.
3/ Similarly, whatever, presence is there of the Chinese army in Gilgit Baltistan, the CPEC projects will compel them to increase their army strength, increase strength of their intelligence network. They may also hire services of the Blackwater for the protection of the CPEC route. In this regard the Pakistani governments are very generous - they allow foreigners to kill Pakistanis, and at times, provide them with appropriate facilities and bases and logistic support.
4/ Because of the CPEC, there will be huge environmental problems, which will seriously affect people of Gilgit Baltistan and the region, including Pakistan.
5/ There will be nine Special Economic Zones along the route of the CPEC; and there will be one in Gilgit. This will only display Chinese goods. This, in practise, will become Chinese enclaves where there will be Chinese staff of each company displaying goods, they may have their families, their own security, their own food stalls, cafes, restaurants, and may be schools etc.
I can add more things to the list, but the length is the major constraint. Anyhow, can anyone think that presence of the above in Gilgit Baltistan will:
· Empower local people?
· Enhance the human rights situation there?
· Improve the economic position of the people?
· Grant more freedom and rights to the local people who are ruled with an iron fist since 1947?
· Establish technical colleges and universities?
· Alleviate human suffering and illiteracy?
· Promote equality and justice?
· Advance cause of the underprivileged, especially women and the poor?
· Encourage good governance and transparency?
Reply to these questions and many more questions, which I can add, is negative. People of Gilgit Baltistan will suffer immensely. Their rights and freedom will be very seriously curbed, as this will become a police state. Should I remain quiet on this or speak out against this?
It is interesting to learn that China is even considering changing name of the CPEC in order to woo India. Luo Zhaohui, Chinese Ambassador to New Delhi, while referring to deteriorating relations between India and Pakistan said, China can mediate to resolve to resolve the differences. He also said that China can ‘Even think about renaming the CPEC’. 11
Writer is a political analyst, TV anchor and author of many books and booklets. Also he is Chairman South Asia Watch and Director Institute of Kashmir Affairs. Email:
5. China and Pakistan Agreement 1963, signed by Pakistani Foreign Minister Zulfikar Ali Bhutto and Chinese Foreign Minister Chen Yi, in March 1963