Pakistan turns to China for development

PUBLISHED : Sunday, 08 December, 2013, 1:14pm
UPDATED : Sunday, 08 December, 2013, 1:14pm

Pakistan’s launch of work on its largest nuclear power plant last week is the latest example of big-money Chinese infrastructure projects in the troubled nation.

Cash-strapped Pakistan, plagued by a bloody homegrown Taliban insurgency, is battling to get its shaky economy back on track and solve a chronic energy crisis that cripples industry.

Politicians in Beijing and Islamabad are fond of extolling the profundity of their friendship in flowery rhetoric and on the ground this has translated into around 10,000 Chinese engineers and workers flocking to Pakistan.

Chinese companies are working on more than 100 major projects in energy, roads and technology, according to Pakistani officials, with an estimated $18 billion expected to be invested in the coming years.

“Some projects are being done by the government, then most of the projects are being done by the Chinese companies, by the provinces and also with the state enterprises and authorities,” Ahsan Iqbal, Pakistan’s federal minister for planning and development, told AFP.

“In the energy sector, Chinese engineers are building up to 15 power projects that include hydel (hydroelectric), thermal and nuclear plants.”

Pakistan faces an electricity shortfall of around 4,000 megawatts in the sweltering summer, leading to lengthy blackouts that make ordinary people’s lives a misery and have strangled economic growth.

To combat the crisis, Pakistan has sought Chinese help in building power generation projects across the country, including nuclear.

Aside from the 2,200 MW project near Karachi launched by Prime Minister Nawaz Sharif last week, Chinese companies built two of Pakistan’s three operational reactors.

Chinese engineers are also busy in the construction of a 969 MW hydropower project in Kashmir. They have also committed to generate 6,000 MW of electricity from coal and wind in southern Sindh province.

Economic corridor

But cooperation goes beyond energy.

Visiting in May during his first overseas trip after taking office, Chinese Premier Li Keqiang linked growth in his country’s restive west with that in Pakistan, saying the two sides wanted to create an “economic corridor” to boost development.

The concept involves improving road and rail networks to link China through Pakistan to the Arabian Sea and planning minister Iqbal said its benefits would extend to other neighbouring countries.

“The biggest flagship project is going to be the economic corridor. I hope with its completion, we will be able to create opportunities not just for China and Pakistan but for the entire region,” he said.

“If the economic corridor is constructed, trade between China and India can also take place from this corridor. Similarly, trade between China and Central Asia and also between India and Central Asia can take place,” Iqbal said.

In January the Pakistani cabinet approved the transfer of Gwadar port, strategically located in the country’s far southwest, to a Chinese state-owned company.

Once the road network is improved, Gwadar will slash thousands of kilometres off the distance oil and gas imports from Africa and the Middle East have to be transported to reach China.

‘Special feelings’

The bloody six-year Taliban insurgency and threat of expat workers being kidnapped and beheaded by militants has made many foreign firms wary of investing in Pakistan.

Chinese engineers on construction sites are guarded at all times by armed policemen, and some AFP spoke to seemed happy with their time in Pakistan.

“Pakistani people are very friendly with Chinese. That is why I am here since last three years and I will spend some more years over here,” said Wang Yanjun, supervising a road-building project in Muzaffarabad, the main town in Pakistani Kashmir.

“They provide respect and support to Chinese, so cooperation between China and Pakistan is increasing. I think we will do much more development projects in future than now.”

Wang Yanjun’s company China Xinjiang Beixin, has already worked on projects in Pakistan ranging from roads to airports.

Another engineer, Wang Songqiang of China International Water and Electric Corporation, is looking after the construction of a shopping centre in Muzaffarabad.

“Our company is working in 38 countries, but we have special feelings while working here in Pakistan,” he told AFP.

Pakistan and China presently have annual bilateral trade of around $12 billion and are trying to take it to $15 billion in the next three years, though Iqbal said Sharif is dreaming of doubling even this volume.

For China, investing in Pakistan’s crumbling infrastructure is a chance to boost trade but also about using its southwestern neighbour’s workforce as it seeks to keep prices down while satisfying growing domestic demand.

“Some industries are becoming very costly in China and their government feels they can get cheaper labour in Pakistan for those factories, which includes electronics and autos,” Ahmed Rashid Malik, senior research fellow at the Institute of Strategic Studies, Islamabad, told AFP.

“For that they need energy in Pakistan and investing in Pakistan’s energy sector can prove beneficial for China in future.”

But there are dissenting voices, raising worries about possible corruption in the somewhat opaque deals struck between Pakistani government departments and provincial administrations and Chinese firms.

“The capacity of Pakistani bureaucracy and the issue of transparency in this whole development plan is a source of concern for me,” Senator Mushahid Hussain, chairman of Pakistan China Institute and a strong advocate of Pakistan-China friendship, told AFP.

“There have been allegations of corruption against them in the past, so it’s a challenge for us to utilise this opportunity which came to us through Chinese cooperation,” he said.