Negotiating CPEC

A few days before the 6th Joint Cooperation Committee on CPEC was to be held, the government had planned 29 special economic zones (SEZ) aimed at enhancing productive capacity and exports base. That laundry list has now been reportedly washed down to eight SEZs; two per province. Such is often the gap between wish list and reality, and if market sources are any guide, the so-called spill over from the CPEC may also be far from what the hype is all about.

A host of reports suggest that the labour employed by the Chinese at Gwadar port are mostly Chinese with little spill over in local labour market. Likewise, sources say that the Chinese do not even allow Pakistani engineers to be on the ground at Engros coal project at Thar. So much for spill over!

Granted that Pakistani workers may not have the necessary skill set that the Chinese may require in the core CPEC or CPEC spill over projects. But that should not preclude the government from preparing a graduation plan for the employment of local labour. To that end the setting up training institutes at Gwadar is a welcome step. But there should also be some game plan to ensure that Pakistani labour is employed in the core CPEC and Chinese private sector FDI spill over in various Pakistani business sectors due to CPEC.

Critics to this theory might quip that beggars cannot be choosers, and after years of FDI isolation Pakistan should be happy that it is getting at least something. Then again, hasnt Pakistan already offered plenty? For instance, we have offered one of the most lucrative returns under one of the most liberal policy to Chinese investors in the power sector. So much so that recent withdrawal of Nepras powers is also being seen as an outcome of Nepra rejecting some of the tariffs for Chinese power firms. Those in the regulatory circles fear that tomorrow might even see the clipping of SECPs and CCPs powers as well. Likewise, hasnt Pakistan also given blanket import duty exemptions to the Chinese?

Beggars cant be choosers is a realistic lens to look at these things. However, political realism also demands from Pakistan as assessment of how badly does China need Pakistan, and to what extent Pakistan can negotiate the deals in its favour.

Where does the balance lie between these two poles? Well, nobody has the monopoly on that knowledge, and surely not the government. It is therefore paramount that the government and the private sector discuss CPEC related plans in advance -- well before the government blindly doles out concessions to the Chinese or anybody else.

Democracy demands transparency, and transparency shouldnt merely be post-facto, although that too is in deficit in this country. The process of decision making itself should be transparent. Failure to do so will only create misperceptions, loose ends and all other things that leave a bad taste, let alone the risks of negative consequences that may be hard to unwind.