Pakistan is missing out on CPEC potential due to red tape.

Pakistan is missing out on CPEC potential due to red tape. 

China-Pakistan's 70th birthday celebrations of diplomatic relations is an opportunity to review red tape. 

Jan Achakzai 

As Pakistan and China mark the 70th Birthday of their historic relations, great news is about to burst on the world stage. 

The first biggest international Airport will be ready. The International Airport at Gawadar to cater to big aircrafts including world’s largest passenger airliner, the Airbus A380, paving way for making the port region’s transportation hub will be inaugurated shortly. The new Airport will be completed with Chinese government’s grant of $230 million. It is part of the numerous projects in Gawadar being finished by China as part of its Belt Road Initiative (BRI)’s flagship project, CPEC.  

In today’s world, vision-less-sleep walkers are tomorrow’s economic captives. On this occasion it is worth looking at the best mega project that has come out of the two countries' historic relations. The challenge for Pakistan to choose its right destiny today is upon us. Once in a life opportunity has knocked on Pakistan’s door to be the next Asian dragon by leveraging CPEC and attracting Chinese public and private sector investment through the effort of visionary leadership, right policies, and robust capabilities to create a supporting environment. Are we ready? 

The CPEC is being billed in public conversation by the PTI Government as a growth engine. However, there have been some concerns that the  CPEC may have slowed down as admitted by the PTI Minister Hammad Azhar who logically explained the reason: “The FDI inflows resulting from CPEC activities have seen a tapering off because of the temporary gap between the first phase of CPEC being completed last year and the second phase focused on the western regions picking up”. (News, March 31)”. 

In the shouted hyperbole, like the previous government of PML-N, PTI govt is claiming to be committed to the CPEC and peddling a narrative that it is trying to link the CPEC with social development of the people. Let us examine where the PTI government has the will, capacity and means to unlock the potential of CPEC for the collateral political and economic benefits of the country.

The best part:

The top leadership of the government led by Prime Minister, Imran Khan, is absolutely on the same page with its Chinese counterpart to make the CPEC a success, and has the will to remove all challenges on its way to execute the project of the century-a multidimensional corridor with auxiliary special economic zones as envisaged and planned by both countries. 

Pakistan’s armed forces are fully backing the project and has raised a force of nearly 15000 men to ensure its security. The CPEC focal person Lt Gen(R) Asim Saleem Bajwa is doing a tremendous job to coordinate streams dealing with the CPEC. 

The good part:

Work is afoot to execute the vision of the government. Feasibility studies being prepped for the next level of CPEC—special economic zones, established and work has already started. The strategic framework agreement of the two countries under the current leadership is to expand to other sectors including agriculture.

PTI government is working on poverty alleviation programme learning from 

Chinese model. China’s miracle is the only and best example of the poverty alleviation for  countries like Pakistan to emulate. 

However, there are several gaps which are relevant to the CPEC operations and need to be addressed on war footing. 

The bad part: 

As they say, the devil is in the details. Start with the policy: policy is largely framed by those who do not know the policy whether he (she) is a bureaucrat or a politician. Usually, section officers are instructed to formulate policies. For instance, bureaucrats and politicians are talking about “one window facilitation” to attract foreign investment, but no one is aware of its technicalities. Similarly, every political leader is raising the slogan that Pakistan is rich in mineral resources but when he (she) is asked about the data and the way forward to exploit it, he would seem to be completely blank or naïve about it. Rather the bureaucrat would act totally opposite to what is expected and may become an investment barrier through his authoritative and dictatorial attitude he has inherited from the system, training and culture. Policy is the nucleus of turning around the destiny of a nation. Here it is totally missing and somehow run by emulating practices having no relevance or organic expertise. The basic fault is not following the internationally accepted principles to engage “right man for the right job”. But we need subject specialists to formulate the policy.

The focal Ministry of CPEC, Planning, Development and Reform (MoPDR) sorely in need of major reforms: specific and tangible reforms. It is not a mere coincidence that three bureaucrats are at the helms in any government. It is generally turning out to be the most chronic problem in our institutions that bureaucrats keep on lingering their positions in upcoming governments. The worst part is that such individuals are often implicated in serious allegations of corruption both financially and morally and also incompetent, replete with capacity issues and instead of serving the institutions or the national development, they are just manipulating, manoeuvring and playing with other employee’s careers to save their own skin and positions. 

A classical case in the Planning ministry, is an individual employee who was holding an important position on CPEC, appointed in Nawaz government, he is incompetent, with plethora of capacity issues. After the inception of the Imran Khan government, he started using the top position and grabbed an additional portfolio of being the focal person for the CPEC. And a number of times he did blunders in explaining the nitty gritty of financial layout of the CPEC projects and quoting wrong figures carried many times in the top english dailies and International media creating a total confusion on behalf of Pakistani government while annoying the Chinese counterparts as a result time and again Chinese Ministry had to clarify rescuing him. 

The story did not end here, the ministry of Planning had  advertised a post of MP1 as Project Director for  CPEC/Coordinator, with the TORs tailored made for its blued eye official with the connivance of the top leadership of MoPDR whereas the PHD employees are already working in the MoPDR or in attached departments. The responsibilities could have been assigned to them to perform in a much better way and also this could have saved the emoluments which are wasted uselessly while the government has been clamouring for austerity measures.

Moreover, the first and only official think tank of the CPEC which works under the Ministry and Pakistan Institute of Development Economics (PIDE) is in shambles because the MoPDR is running the portfolio through bureaucratic mindset/means and thus no potential research has been carried out as yet. The think tank is rather serving as a refuge for MoPDR’s employees’ incompetence, and inefficiencies. Such practices put together are the epitome of the bad governance negativity affecting CPEC which is hailed as the lifeline of Pakistan’s economy.

One would have high hopes that this government would chuck out incompetence from the concerned ministry but tapping at the back of such incompetent lot and promoting and rewarding them with praise and prestige are no less than adieu to the slogans of good governance and eliminating corrupt practices. But there are other reasons for that hackneyed bureaucrats and the likes who hold and drag their power positions, a) they are appointed by their backers and supported in order to sustain their dominance in the organisations, b) incompetent ministers oblivious to the ground realities and who are miles away from serving the nation, appoint favourites to strengthen their own constituencies etc.

The situation in the planning ministry in the previous government was bad but under the current   government, the ministry has beset with the following challenges: failure to understand the portfolio of the CPEC, failure to identify bottlenecks, failure to appoint professional employees to the right positions, failure to learn from the Chinese best practices and failure to get rid from the worst practices; these cardinal reason have been the cause of delay of many CPEC projects. For instance, in the JCC meetings held at Beijing in or Islamabad, many MoUs were not signed because the MoPDR delegation went blank without even preparing the relevant documents etc. Those  concerned lot who use classical clichés, busy in press conferences, employ plagiarised write-ups boast and claim to be the sole proprietor of the CPEC, are the very people to play with the fate of CPEC.

In addition to loans for short term budgetary support, we are laying emphasis on investment in social development and poverty alleviation programmes—critical for Pakistan—but they are not the projects attractive to Chinese investors. We can do little with both: social sector investment and loans. The right option is to create an environment whereby we could attract the Chinese entrepreneurs through savvy policies aimed at competing with India, Vietnam, Myanmar and Bangladesh on lower tariffs, management, logistics, labour costs and ease of doing business. 

The worst part: 

1. After the 18th amendment, provinces have been empowered to device their own investment policies; provincial governments do not  want any interference from the Centre—partly It is  because of the undue longing of authority and fishy factors attached to international investments. It is the provincial government which is to allot land for the roads, Industrial zones and grant many other NOCs at whims etc, for the smooth execution of CPEC projects. This very provincialism has proved to be the major bottleneck and the reason of delay in some CPEC projects initiation and conflicts. One example was the dispute over construction of eastern/western routes despite running all the routes within Pakistan’s territorial jurisdiction. This led to the issue of blaming the CPEC being non inclusive and rather termed as “Punjab Centric”.

2. There has been no independent evaluation of the Board of Investment (BOI)’s mandate, the employees’ capacity, skills and their experience in attracting both domestic and foreign investment. In the context of CPEC, BOI remains a toothless organization because of provincial autonomy gained under 18th amendment only sending letters pleading compliance with its decision. While meeting the Chinese entrepreneurs and listening to their views, one observers, they are eager to invest in Pakistan but because of BOI’s lack of capacity and capability, they do not get inspired and eventually prefer to invest in India and elsewhere and not in Pakistan. The inefficiencies of BOI coupled with confused 18th amendment is a dilemma happening to be a major irritant in execution of CPEC projects— unfortunately still not being realised by the authorities at the policy level. Interesting BOIs manned mostly by blue eyes.

Bottom-line: 

When the CPEC idea was conceived, Pakistan was termed as an investment dry country. The CPEC changed this perception to a large extent but we have missed and are still losing millions of dollars as we are not providing the basic need of ease of doing business to the Chinese and other foreign investors.  

Even if we just manage to tailor and twist the Chinese model according to our needs, still a lot can be achieved, the role of the various regulatory bodies of Pakistan can play a pivotal part in creating a baseline for enabling a business friendly environment. For this to happen, archaic bureaucracy, supra body like BOI and 18th Amendment are not the right answers. In other words, the system is broken. We need to fix the system to create an investment friendly environment. This is a once in a  generation opportunity Pakistan has got in terms of CPEC, it is for our leadership and policy makers to make it realise for the next generation.