China ‘Belting’ Pakistan on The Road to A Debt Trap

SALEEM SAMAD

The political debacle of the ambitious Gwadar International Port built by the Chinese is yet to be fully operational. It was discovered that the challenges were unbearable and the threat perception has increased manifold in the restive Balochistan province in Pakistan.
The security threat challenged by Baloch separatists and armed nationalists demanding an independent Balochistan has caused a ripple of fear for the future of the Gwadar Port and China’s ambitious connectivity with Central Asia into the Arabian Sea.
The ‘all-weather friends’ China and Pakistan signed a precursor deal to develop the Karachi coastline at the cost of $3.5 billion – another would be a debt trap.
China’s strategic shift from Gwadar to Karachi has prompted Pakistan’s ousted Prime Minister Imran Khan to dub the “jackpot” project “a revolution” in his Tweet to develop Karachi’s coast.
Chinese policy puts strategy over investment and ignores profits. The Chinese Communist Party’s (CCP) leadership has shifted from high-risk lending to hedging its bets.
The ancient silk-road was envisioned as a megaproject – Belt and Road Initiative (BRI) by China’s powerful President Xi Jinping.
However, the project seems to have hit a speed bump after reaching Gwadar and is losing its steam.
Meanwhile, China is extremely concerned about the safety and security of its personnel engaged in the construction of China-Pakistan Economic Corridor (CPEC) projects, including the Karakoram Highway linking with Gwadar.
China defending its lending practices, said they were “sincere and unselfish”, and insisted it only lent to countries that could repay.
Patterns of Chinese investments in South Asia – Bangladesh, Nepal, Pakistan, and Sri Lanka – all of which are part of BRI, depict Chinese propensity to control the domestic markets and the natural resources of the South Asian nations.
Many countries where China has offered ambitious BRI proposals could not contemplate where and when they were going to fall into a debt trap.
Some countries admitted that they have fallen into a debt trap and the mega infrastructure is being colonized, like the $306.7m Hambantota International Port in Sri Lanka built by China in 2010.
In 2016, a 70 per cent stake of the port was leased to China Merchants Port Holdings Company Limited (CM Port) for 99 years for $1.12bn. The lease was questioned during the street revolution which toppled the Rajapaksa brothers. The cash-starved Sri Lanka now wants the port back.
Pakistan is one of them. They know where the trap is. The Sunni Muslim majority nation knows they are sliding into China’s debt trap. Despite the debt trap, a strong pro-Chinese lobby with Pakistan elites and military in Rawalpindi promotes Chinese megaprojects, while the politicians have to swallow the Chinese red pills.
Pakistan is China’s gateway to Central Asia and the Middle East. CPEC’s transportation corridor will create a low-cost network of roads, railways and other infrastructure and substantially increase trade capacity between southwest China with Europe, the Middle East and North African countries.
The $62bn Gwadar project links with the persecuted Uyghur Muslims in East Turkistan (now Xinjiang Province) of China and is being built through disputed territory in Gilgit-Baltistan, Pakistan-administered Kashmir, and militant-infested Balochistan.
Well, the BRI flagship project in Pakistan fails to address the participation of the fiercely independent Baloch people, which has scaled up armed insurrections in Balochistan.
Historically, Balochistan was a princely state and once an independent nation under British Raj. Before the British colonialists quit India, signed its independence months before Pakistan’s independence in August 1947. Muslim League overzealous leaders invaded Balochistan in March 1948 with full knowledge of Mohammad Ali Jinnah, founder of Pakistan.
Gwadar has been leased to China for 43 years and the prospect of the Chinese navy converting the port into a strategic naval base will invite greater security issues.
China which they do not hide its grand plan to expand its maritime presence in the Arabian Sea and the Gulf of Oman – a major strategic global oil trade route.
The United States and its allies in the Gulf reckon China’s hegemony in the Gulf has been deemed a security issue of the oil route.
America thinks the presence of the Chinese navy will provide military backup to Iran’s naval patrol in the Persian Gulf, from yet another Chinese-built Chabahar port in Iran, not far from Gwadar.
Earlier, Communist China for decades propagated on its state radio that the United States, Japan, Britain, and European countries are economic imperialists, warmongers and backed autocratic regimes in third-world countries.
Several think tanks argue that China has become an economic giant and a new superpower – the neo-economic imperialist or another “East India Company”.
A British popular tabloid newspaper The Sun claims that China is “colonizing” smaller countries by lending them massive amounts of money, which they can never repay.
Developing countries from Pakistan to Djibouti, Maldives to Fiji, all owe huge amounts to China. Countries around the world owe huge sums to China and have fallen into a debt trap.
Some political scientists are calling it “debt-trap diplomacy” or “debt colonialism” offering enticing loans to countries unable to repay, and then demanding concessions when they default.
Alarm bells are ringing for Pakistan’s public debt is piling up, while a new narrative taking shape in the West that the BRI is creating a debt trap for developing economies, many are quick to link Pakistan’s ballooning debt to loans incurred under the CPEC.
Pakistan will have to pay back $100 billion to China by 2024 of the total investment of $18.5 billion, which China has invested on account of bank loans in 19 early harvest projects, under CPEC.
Nevertheless, Pakistan elites and media hype boast CPEC has the potential for a dramatic impact on Pakistan’s economy, but this transformation would come at a heavy price of making Pakistan a colony of China. Piling up loans from China is a big gamble for Pakistan’s economy, writes Abdul Khaliq, a debt analyst.
As China makes inroads into Pakistan, the government has given sweeping tax exemptions to Chinese companies, a situation which is creating a damaging and discriminatory playing field against Pakistani business entrepreneurs virtually abolishing the remaining locally owned manufacturing sector in the country.
In fact, Pakistan heavily relies on CPEC and has put all its eggs in one basket. Piling up loans from China and building too many hopes in the CPEC may be a big gamble for Pakistan’s economy.

First published in The New York Editorial, 18 November 2022
Saleem Samad, is a South Asia Special Correspondent for the New York Editorial. He is an independent journalist based in Bangladesh. He is a recipient of the Ashoka Fellowship and the Hellman-Hammett Award and is a correspondent of the Reporters Without Borders (@RSF_inter). He could be reached at saleemsamad@hotmail.com; Twitter: @saleemsamad

China ‘belting’ Pakistan on the road to debt trap

Gwadar Port in Pakistan occupied Balochistan

SALEEM SAMAD

The political debacle of the ambitious Gwadar International Port built by the Chinese is yet to be fully operational in Pakistan. It was found that the challenge was unbearable and that the threat perception has increased in the Balochistan province.

The security threat posed by Baloch separatists and armed nationalists demanding the independence of Balochistan has caused a ripple of fear for the future of the Gwadar Port and its connectivity with Central Asia.

Recently, “all-weather friends” China and Pakistan signed a precursor deal to develop the Karachi coastline at the cost of $3.5 billion -- what is being called another debt trap. China’s shift from Gwadar to Karachi has prompted Pakistan’s prime minister Imran Khan to dub the “jackpot” project “a revolution” in his Tweet to develop Karachi’s coast.

China puts strategy over investment and ignores profits. The Chinese Communist Party’s leadership has shifted from high-risk lending to hedging its bets. China’s President Xi Jinping’s Belt and Road Initiative (BRI) project seems to have hit a speed bump after reaching Gwadar. In fact, BRI is losing steam. Malaysia has cancelled projects worth $11.58bn. Similarly, Kazakhstan shook their head to say no to a $1.5bn investment, followed by Bolivia, which has turned down projects worth $1bn.

Some countries admit that they have fallen into a debt trap and the mega infrastructure is being colonized, like the $306.7m Hambantota International Port in Sri Lanka built by China in November 2010.

In 2016, a 70% stake of the port was leased to China Merchants Port Holdings Company Limited (CM Port) for 99 years for $1.12bn. The lease has recently been questioned by Sri Lankan President Gotabaya Rajapaksa, who now wants the port back.

Nearly 35% of the projects are struggling with corruption and protests, while several other countries are contemplating quitting BRI debt trap projects. Many countries where China has offered ambitious BRI proposals could not contemplate where and when they were going to fall into a debt trap. Pakistan is one of them. They know where the trap is. The Sunni Muslim majority nation knows they are falling into China’s debt trap. Despite the debt trap, a strong pro-Chinese lobby promotes Chinese megaprojects, while the politicians have to swallow the Chinese red pills.

The $62bn Gwadar project envisages linking with the persecuted Uyghur Muslims in East Turkistan (now Xinjiang Province) of China, and is being built through disputed territory in Gilgit-Baltistan, Pakistan-administered Kashmir, and Balochistan. Balochistan was once an independent country, before Pakistan’s independence in 1947 and its forcible occupation in March 1948.

Recently, China is extremely concerned about the safety and security of its personnel engaged in construction in China-Pakistan Economic Corridor (CPEC) projects, including the Karakoram Highway linking with Gwadar.

Gwadar has been leased to China for 43 years and the prospect of the Chinese navy converting the port as a strategic base will invite greater security issues, as China has a grand plan to expand its maritime presence in the Arabian Sea and the Gulf of Oman --  a major global oil trade route.

The United States and its allies in the Gulf reckon China’s hegemony in the Gulf will be a security concern. America thinks the presence of the Chinese navy will provide military backup to Iran’s naval patrol in the Persian Gulf, from yet another Chinese-built Chabahar port in Iran, not far from Gwadar.

First published in the Dhaka Tribune, 9 November 2021

Saleem Samad, is an independent journalist, media rights defender, and recipient of the Ashoka Fellowship and Hellman-Hammett Award. He can be reached at <saleemsamad@hotmail.com>; Twitter @saleemsamad

After Bangladesh, next Balochistan

The Baloch population has become a minority in its own homeland

SALEEM SAMAD

Akbar Shahbaz Khan Bugti or Nawab Bugti, a defiant Baloch nationalist, was murdered by the Pakistan Army on orders of Pakistan’s President General Pervez Musharraf. Nawab Bugti, born in 1927, chieftain of the rebellious Bugti tribe, was the tallest Baloch leader who was the federal minister, governor, and chief minister of Balochistan.

Armed militants of the Marri and Bugti tribes, the fiercest tribes, waged armed struggles and politically challenged the forcible inclusion of the resource-rich province into Pakistan in March 1948.

Nawab Bugti was assassinated in a military raid ordered by General Musharraf. In a fierce battle with militants, Bugti’s fortified cave in Bhamboor hills fell after the helicopter gunship fired missiles into the cave. Bugti and 35 of his compatriots were martyred on August 26, 2006.

Musharraf was charged by an anti-terrorism court and then acquitted by a Pakistan court in Bugti’s assassination. His death sparked a countrywide anti-Pakistan protest by Baloch students and youths. Police had to quell ethnic riots in different cities and towns.

Balochistan is a region mostly populated by ethnic Balochs, as well as Pakhtuns or Pashtuns. It is the least populated region, and also the largest province of Pakistan. For decades, disgruntled Balochis have been protesting the forcible conversion of the Baloch population into a minority in their own homeland.

Since the death of Bugti, the restive Balochistan has experienced appalling human rights abuse. Anytime someone speaks up, protests, or writes on the rights abuses in Balochistan, the next day a dead body is dumped to warn of the consequences of challenging the state. Journalists who have published about Balochistan’s issues faced violent backlash from the state security apparatus.

The United Nations, International Court of Justice, and human rights organizations may not be able to fathom the plight of the families of the missing persons. Baloch mothers, sisters, widows, and their children are suffering from severe spiritual and mental distress.

Military regimes in Pakistan envisaged eradicating ethnic identities by changing provincial demographics and pursuing Islamization, or the substitution of a common Muslim identity for ethnic ones.

At the end of the 1970s, Balochistan became one of the two focal points of the dictator’s Islamization strategy (the other being the North-West Frontier Province, now Khyber-Pakhtunkhwa).

The period between the end of the Bhutto regime and the military coup of Pervez Musharraf witnessed major developments in the Balochistan policy. Zia-ul-Haq used Islamization as a weapon against the insurgency in Balochistan, said Frederic Grare in his research publication Balochistan: The State Versus the Nation.

In 1970, when Bangabandhu Sheikh Mujibur Rahman was on a whirlwind tour for the election campaign in Karachi, Lahore, Peshawar, and Quetta -- he was given a tumultuous welcome, said Zahirul Islam Khan Panna.

Z I Khan Panna, a leading human rights lawyer, was a law student at Karachi University and was hand-picked by Bangabandhu to be his fixer for the election campaign in Pakistan.

Panna met Nawab Bugti in Karachi in June 1970, and handed over an English copy of the Six-Point program, as desired by Sheikh Mujib. Bugti was indeed a great admirer of Mujib and told his Baloch nationalist leaders that the Six-Point was a Bible to resolve the longstanding deprivation and political neglect of Balochistan.

Sher Mohammad Bugti, spokesperson of the Baloch Republican Party (BRP) spoke from Geneva, where he and BRP’s key leaders are living in exile. He lamented that the “Balochistan atrocity is worse than Bangladesh” in 1971, which was perpetrated by marauding Pakistan military.

Baloch nationalists are fighting two fronts, he said. One is Pakistan and the second is China. The Chinese Communist Party is singing the same tune as Pakistan on the Baloch issue on the mega Belt and Road Initiative (BRI) and Gwadar Port, which is located in Balochistan.

Bugti’s party senior leaders urged Indian Prime Minister Narendra Modi to support their cause and help bifurcate Balochistan from the deep state hawks of Pakistan -- like Indira Gandhi helped Bangladesh in 1971.

Brahamdagh Bugti, the grandson of the slain Baloch leader Nawab Akbar Khan Bugti is presently the president of BRP. He rejected the possibility of holding any negotiations with Pakistan authorities, suggesting an internationally supervised referendum in Balochistan to bury the crisis once and for all.

First published in the Dhaka Tribune on 7 September 2020

Saleem Samad is an independent journalist, media rights defender, and recipient of the Ashoka Fellowship and Hellman-Hammett Award. He can be reached at saleemsamad@hotmail.com; Twitter @saleemsamad