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Is CPEC neo colonialism? Role and responsibilities of World community in protecting our natural resources

Speech of Dr Shabir Choudhry in a Conference arranged by Jammu Kashmir International Peoples Alliance in Geneva on 13 March 2018.

Colonialism has not ended. It still exists in different shapes and forms; and that is why the new term neo colonialism has emerged. New systems of exploitation and deprivation have been formulated. Imperialist powers no longer need to send their armies to occupy a country in order to exploit its resources.

A neighbour of the Princely State of Jammu and Kashmir, China falls in the list of those countries which are known as new colonial powers. They use their economic muscle and technical know – how to advance their political, economic and strategic agenda. The client country or a country under their influence finds itself in a position where they are unable to say no, and agree to unfair deals, which to some, is another form of looting and plundering.

This relationship exists between our Muslim occupier, Pakistan; and non-Muslim occupier, China. People may recall in 1963, China demanded control of Shaksam Valley, a territory which belongs to the former Princely State of Jammu and Kashmir; and Pakistan without any hesitation surrendered control of this huge territory of nearly 2000 kilometres. Pakistan did this even though they had no legal justification to do it, as Pakistan is also an occupier of Gilgit Baltistan, where this territory is situated.

This territory is strategically very important to China, as it enabled China to link it with Aqsai Chin, another territory of Jammu and Kashmir State, which they conquered in the 1962 war with India. In return, Pakistan won the friendship of China, but the ‘gift’ they presented to China belongs to us, citizens of Jammu Kashmir State.

 Mr Chairman

Pakistani government and their different organs continue to disseminate this information that the China Pakistan Economic Corridor is a game changer; and that it will change destiny of Pakistan. Also, they claim that this mega project will enrich and empower people of Gilgit Baltistan and Pakistani Administered Kashmir.

Despite this official propaganda, growing number of thinking people have very serious doubts about success of the CPEC. Many Pakistani and citizens of Gilgit Baltistan and Azad Kashmir feel that the Project is designed to exploit resources of Gilgit Baltistan and Pakistan to advance political, economic and strategic agenda of China.

China is investing more than $ 60 billion dollars. There is an old saying: there are no free lunches. China is not doing all this for charitable purposes. Apart from economic and political gains, China will advance strategic and military agenda under garb of the CPEC. Despite this knowledge, the Pakistani government is willing to look the other way, as long as they get dollars and some infrastructure.

It must be pointed out that those who provide funds, they also dictate the terms and conditions which suit them. Generally, they give with one hand, and take it back with both hands. Mechanism is put in place that a big chunk of the investment returns in the form feasibility reports, technical reports, professional advice, salaries for professionals and highly skilled staff and labour etc.

The CPEC related projects are mostly controlled and run by the Chinese companies and their experts; even manual labour and materials come from China, which will surely help the Chinese economy. The Pakistani companies and their experts are only there to play the second fiddle. It means the companies and labour will not be able to learn new technical and professional skills. Furthermore, there will be less chance of Pakistan enjoying full fruits of such loans, especially in short term, while the projects are in the process of completion.

Also, it must be pointed out that Pakistan has to provide security for all the CPEC related projects. Is it not interesting that Pakistan will pay for building of the infrastructure on which mainly the Chinese trucks will carry the Chinese goods and make huge profits; and Pakistan will pay all the costs of security.

If all goes well, as Pakistani policy makers envisage, then that will encourage other foreign companies to invest here and bring the latest technology and marketing skills which will help them to outmanoeuvre Pakistani industrialists. This will surely hurt Pakistani exports and economic growth.

The CPEC projects are facing delays due to problems related to political, security, corruption and maladministration; and fear is that some of the projects may not be completed on time. Whatever the development stage of these projects, whether they are producing any profits or not; and whether Pakistan receives any toll money or not, Pakistan will start repaying 3 billion US dollars per annum after 2019.

Mr Chairman

Failure to repay will result in penalties. The Chinese are very shrewd businessmen; and they are harsh too, when it comes to protect their interests.

Already, China has a big say in Karachi Stock Exchange, as they have 40% stakes. With their economic, political and military muscle they will be able control and influence certain aspects of the Pakistani stocks.

Apart from that control of some airports and docks have already been outsourced to China. It is believed that a lot of control of Gwadar is already passed on to the Chinese. Strategic areas of Gwadar, including port and new airport etc will be run under their watchful eyes. Some reports suggest that Gwadar was no go area for even the local people for six months, when the Chinese were executing new development plans for the town and its new infrastructure.

Furthermore, the Pakistani markets are flooded with the Chinese goods; and that resulted in closing down of many local companies. From Gilgit Baltistan, Pakistan has very generously given thousands of acres of land on lease to the Chinese from where they are extracting highly valuable minerals; and the local people have no access there, and they don’t even know what is being looted from here. Same is the case in Balochistan, from where the Chinese are extracting minerals, oil and gas.

Due to continued political instability, lack of confidence in Pakistani economy, and coupled with other factors Pakistan’s foreign exchange reserves continue to diminish fast and now stand at $12.2 billion; whereas six months ago they were around 20 billion.

This decline continues, despite the fact that a few months ago, Pakistan received $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank. Also, they received $350 million under the Coalition Support Fund (CSF). 1

Mr Chairman

China has emerged as the biggest lender to Pakistan. Pakistan seems to be happy to receive financial, military, political and diplomatic support from China.

In my considered opinion, this is not good news for Pakistan, as they have put too many eggs in China’s basket? In case of Pakistan’s failure to repay the loan, there could be very serious ramifications for Pakistan and its sovereignty. Let us see what China did to some of the countries which were unable to pay back loans.

  1. Centre for Global Development reported that in 2011, Tajikistan had difficulty in paying the loans and had to write off the loans owed to China in exchange of 1,158 square kilometres of land. 2

  1. China built Hambantota Port and airport and other infrastructure in Sri Lanka. Unlike loan of Pakistan, Sri Lanka had only $8 billion debt. When Sri Lanka struggled to pay back loan, the government had to give the port to China on a lease of 99 years.

  1. Some even suggest that Sri Lanka has also leased the airport and thousands of acres of strategically important land. With control of some parts of Sri Lanka, China’s ambition of controlling and influencing the Indian Ocean will get a big boost.

  1. In Venezuela, China invested around $52 billion. It was wonderful investment. One analyst said, it was a win-win deal for China, as the Chinese government provided employment to its labour; and also, secured continuous supply of oil. Venezuela had no option, but to keep on supplying millions of barrels of oil to feed the Chinese economic boom. 3

  1. A tiny Maldives also had some financial difficulties, and was forced to sign a free-trade deal with China, which may not be good for the economy of the country in the long-run.

In view of the above, why Pakistanis think they will be treated differently, especially when they have already surrendered to the Chinese demands in various fields of Pakistani economy; and even in areas of sovereignty, military and strategic.

A Pakistani analyst Khawaja Ikram Ul Haq, said:

‘With china dominating us more and more, someone has suggested that Pakistan will end up as a Chinese colony with most of its businesses and industries run and owned by china…at the moment we are dominated by them in the military, construction (civil and power), supply of machinery (power plants, wind turbines etc) and they are taking over a corridor from China to Gwadar (port run by China) ….’ 4

Khawaja Ikram Ul Haq further writes:

‘The way things are going they might soon start purchasing power companies and power plants…the Chinese just have too much money -the next sectors that they may takeover are hotels and companies like PIA and Pakistan Steel. So, Pakistan’s future looks likely as a Chinese controlled puppet country. Apparently, Nawaz Sharif even brought a Chinese Communist Party Secretary General in as to experiment with running the country. Pakistan’s independence and sovereignty would be up for grabs in the not so distant future and the Chinese could be ruling Pakistan…!’

If Pakistan is to default, which they will for sure; then they may transfer some more territory from Gilgit Baltistan to China to settle the loan. They can even lease more areas of Balochistan to China; or lease more areas of Gilgit Baltistan that China can loot our natural resources.

To conclude, Mr Chairman, I am not against genuine development of any country; but I am seriously concerned about hidden agenda of China which has political, diplomatic, military and strategic aspects attached to the CPEC. I urge the international community to take appropriate steps before it is too late, and this region becomes a battleground for competing interests of other countries.


  1. Foreign exchange: SBP’s reserves fall $112m, stand at $12.2b

         March 8, 2018 Tribune Express

  4. Ibid

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