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‘CPEC to attract $150 billion foreign investment

@Sinopakfriend The investment over decade could even hit $250 billion or might struggle past $2.5 billion. Once the concrete, tarmac, steel, cables, pipes are laid it all depends on the culture that surrounds the "corridor". If it is open, law abiding, secular within no time it could hit $250 billion and rise even higher.

If on the other hand it is lack of law, closed in, refusing to accept diversity, start looking down at people don't dress what they call "appropriate" or start giving Islamic lecture round every bend then the figure will struggle to get above even $2.5 billion.

We will know if it is success. If over 100,000 Chinese are living in Pakistan quite happily within decade then this project will take off with sky being the limit. If on the other hand there skeleton crew of Chinese minus their familes in particular females who can't wait to finish their "tour of duty" in Pakistan and go off to more interesting postings like in Europe or America then this CPEC will have failed.

I guess for me if you see 1,000s of Chinese females dressed like they do walking around in Lahore, Islamabad or Gwadar taking pictures like they do without anybody batting a eyelid this project will be well on it's way.

Everything rests on the mindset, the culture. That is the $250 billion question.
 
@Sinopakfriend The investment over decade could even hit $250 billion or might struggle past $2.5 billion. Once the concrete, tarmac, steel, cables, pipes are laid it all depends on the culture that surrounds the "corridor". If it is open, law abiding, secular within no time it could hit $250 billion and rise even higher.

If on the other hand it is lack of law, closed in, refusing to accept diversity, start looking down at people don't dress what they call "appropriate" or start giving Islamic lecture round every bend then the figure will struggle to get above even $2.5 billion.

We will know if it is success. If over 100,000 Chinese are living in Pakistan quite happily within decade then this project will take off with sky being the limit. If on the other hand there skeleton crew of Chinese minus their familes in particular females who can't wait to finish their "tour of duty" in Pakistan and go off to more interesting postings like in Europe or America then this CPEC will have failed.

I guess for me if you see 1,000s of Chinese females dressed like they do walking around in Lahore, Islamabad or Gwadar taking pictures like they do without anybody batting a eyelid this project will be well on it's way.

Everything rests on the mindset, the culture. That is the $250 billion question.

Don't you think if what you would like happens then there would be no problem b/w India and Pakistan, if not that then atleast the hatred would be greatly reduced? Those opposing your mindset coincidentally also fuel this hatred of India.
 
Vyom's Musings : The Illusion of CPEC Prosperity - The Debt Trap

@Vyom

https://defence.pk/threads/vyoms-mu...rosperity-the-debt-trap.395381/#ixzz4Iv4CYNCW

So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.

So Here are my observations.

1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines (500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)

Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.

2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.

3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy but can anyone produce cheaper than China? Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].

4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden.

Pic 1 China population centers. :

screenshot-2014-05-05-14-11-121.png

Pic 2 China-Central Asia Oil&Gas Pipelines

6a00e3933590d58834015434f28e0a970c-800wi


5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi. Interestingly it has already been agreed that payments will be in US Dollars.

6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.

No country has become prosperous by converting itself into a big toll booth. good luck.

7. China is making investments on which Pakistan has given sovereign guarantee of 18% return, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.

Example :-
Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.

How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.

I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.

In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
 
Don't you think if what you would like happens then there would be no problem b/w India and Pakistan
Not at all. India/Pak hostility is over lands, specifically Kashmir. Rest are just incidentals that aggregate the base. I am Kemalist, if I had it my way every Mullah would be hanging from every lighpost in Pakistan. Beards would be banned, Urdu would recieve Roman characters. History would begin from Soanian people 500,000 BC.

However my posture toward India would be even more hardline then the Islamists. Instead of India building a fence along the Duran Line I would build a concrete wall to seal of the border from both directions. I would even prevent cross border movement of people.

I would nurture a myth of Indus peoples like most societies do around the main provinces of Pakistan. Example Turks. And Turkey is also multiethnic as you know. Of course people would still remain proud Muslims, as long as that does not spill into public space. Of course this is my private view.

Going back to Pakistan unless there is not attendant change in mindset CPEC will fail. I guess I am hoping the massive influence of China and economic dividend will undo the last 50 years to descent into Saudi medievalism. We will of course see how this plays out.

Of course no serious person can think that $46 billion dollar of concrete, steel, tarmac alone can do anything. It is the human aspect, the soft power thatr brings change and is the source of miracles. Get that right and success will come. We have the Chinese as examples of this.

I guess the operative term now should be not to "Westernize" Pakistan but to "Sinicize" it.

Ps. I agree if Pak fails on the human aspect it jwill ust end up with lots of tarmac and huge debt. If this happens it will be Pakistan's fault. The Chinese have given a lifesaver and it is on Pakistan to use it. If Pak fails to use this Chinese opportunity then it will be Paks fault.
 
Instead of India building a fence along the Duran Line I would build a concrete wall to seal of the border from both directions. I would even prevent cross border movement of people.

As I said this would suit India perfectly. We want an end to infiltration from Pakistan
 
My personal view is also that Kashmir conveniently provides Pakistan a reason to undo the connections built with India (Ganges Valley) during the 98 years British rule. British rule cut us off from our western neighbours and latched us to Ganges. Kashmir has been a godsend because it has allowed decades of division to take root with Radcliffe Line becoming a permanent fixture chopping and undoing what the British did.

On the other hand rather unfortunately through mix of historical circumstance and geopolitics contrary to what I would have hoped - the undoing of Durand Line has not happened. Of course these are my personal views.

Back to subject in hand. The Chinese I believe have literally handed Pakistan the second lifeline (first being when America stepped in to help Pak back in Ayub Khan days) and it is on Pakistan not to blow that chance like it blew the American lifeline.

I guess if in another decade if Pakistani's start moaning about China like they do about US we will know where things are headed. I do find it amusing that many Pakistani's think tarmac is going to change the destiny. They are wrong. Saudi has laid more tarmac then 100 CPECs but look at the real state of that country - I mean minus the oil.

If CPEC means Pakistanis learn and adapt to be like Chinese then CPEC would go on to became a corridor that shakes the entire region if not the Euro-Asia region.
 
Okay , 150 billion dollars is a good development. But what will be the Investment cycle. How many years will it take to milk the promised investment?
For CPEC to be a huge success Pakistan needs to connect a more stable Afghanistan and also Tajikistan with the CPEC(China is not gonna invest there). It will then open the doors to the Arabian sea for the central and east Asia.
All the best with project guys.:enjoy:
 
Cpec investnent agreed = 46 billiion
Cpec investment projected = 150 billion
Pain its causing our

Please start talking when it actually start to materialize. Till then this is all tall claims.
 

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