How China’s Flagship Belt and Road Project Stalled Out

guadar is a strategically important point on the map of pakistan it sits very close to iran actually on the very southern coast it's about a 10 hour drive west of karachi but it's only about an hour drive to iran the area is extremely poor it's very arid it doesn't have enough water electricity has been very spotty one of the most surprising things about visiting gwadar is the high degree of security that is absolutely everywhere there are armed guards that are required to escort foreign visitors everywhere you go because it is a contested region because there have been militant attacks in the past despite all this gwadar is a key part of the china-pakistan economic corridor also known as cpec the crown jewel of president xi jinping's belt and road initiative we will leave no stone unturned in ensuring that cpec and all the projects under its umbrella are materialized in time and in full so far just one third of all cpec projects have been completed in gwadar none of them have been and the promised improvements for local people like job creation and better infrastructure have not materialized so what has china got to gain from developing this seemingly obscure city on the pakistani coast we have seen this movie before an outside power comes into pakistan it spends heavily on big infrastructure projects china's not the first to do it right after pakistan became independent in the late 1940s early 50s the u.s was sending advisors into pakistan to help plants economy us was doing infrastructure projects there too those early projects helped the us gain pakistan as an ally against the soviet union during the cold war the u.s has provided about 80 billion dollars in aid to pakistan since its independence but overall the result is disappointing one of the recent attempts was in the late 2000s as part of the us effort to combat terrorism in afghanistan the number one item on that aid package was to build these high visibility infrastructure projects so there there are literally projects that the united states tried to do or pakistan proposed to the united states in the 2000s during that period that have become belt and road projects china is stepping into a gap which has been left by retreating ambition from the we could u.s farther and faster the belton road initiative is china's president xi jinping's signature foreign policy initiative launched in 2003. it comprises an overland belt stretching through china central asia into europe and a maritime road stretching around southeast asia through the india ocean and up past east africa so a benign way of characterizing china's belton road initiative would be infrastructure for influence so when xi jinping announced the belt and road initiative shortly afterwards china designated pakistan as its showcase flagship project so the china-pakistan economic corridor was going to be the biggest and most important showcase for the success of the belton road pakistan is in great need of infrastructure development they wanted to create a railway a highway roads all kinds of economic development that is intended to help pakistan and it's meant to provide jobs 2.3 million jobs for pakistanis it's meant to provide a 2.5 boost to gdp growth and china would gain economically as well cpec was intended to reduce oil and gas routes from the middle east by thousands of miles a way to cut over land into western china instead of going around southeast asia by ship projects in pakistan also provide chinese state-owned companies with an additional market chinese workers are brought to pakistan to build infrastructure and then take wages home cpec is also strategically significant for china and pakistan china wants to strengthen this relationship to counter their shared rival india cpec is both an instrument of chinese power as well as a test of chinese power if it succeeds china will be demonstrating that it's able to do what great powers have not been able to do in pakistan including the united states which is why gwadar is so important it's in pakistan's balochistan province an area with serious electricity and water shortages lujastan province is actually populated by people who are of baloch origin they're a different ethnicity they speak a different language from the majority in power in islamabad and they feel as the poorest province in pakistan they have not sufficiently benefited from some of the economic achievements that the rest of pakistan has had that area is quite contested by the belgian liberation army the people who feel that even pakistani people have encroached into their territory so quite a number of people are still staging attacks and they attacked the biggest international hotel in gwadar shot up the lobby and killed i think five people but this unsettled city is where the china-pakistan economic corridor is supposed to lead to authorities plan to develop gwadar into an international port city gwadar port has an interesting history and an interesting location too it's located in baluchistan it's about 120 kilometers from iran pakistan purchased this territory from oman i think in the 1950s and so for a long time pakistan has had on its agenda trying to develop this area since the 70s it's wanted to build a port in gwadar actually approached the united states in the 1970s and tried to convince the nixon administration to pay for a report even offered naval access if the united states was willing to pay for that the u.s rejected pakistan's offer concerned that the port would not be commercially viable and would cause geopolitical tension but in the early 2000s a chinese company was awarded the contract to build the port and they completed phase one of construction in 2006. the port was then managed by a singaporean government entity in 2013 a chinese port operator took over from the singaporeans in 2015 china announced that it will expand the port as part of the cpec initiative but five years later little has happened when you look out at the port you can see it has only three berths and all of them were empty and the only ship that was in the port at the time was a pakistan naval frigate and so it indicated to me that the port is not particularly operational for commercial purposes and a number of analysts have talked about the strategic importance in a military sense if eventually china were able to use the port of gwadar as a military base you know no one would be surprised if china did use it in that way i don't think in the short term like it is set up in djibouti where it has a permanent base i think it's more likely to use it as almost like a sort of forward-based resupply option something it can use when it wants to other projects like building pakistan's largest airport in gwadar and two special economic zones have been delayed a 19 kilometer highway linking the port with the makran coastal highway in balochistan is under construction too most of the people who live there and work there already are fishermen they rely on access to the sea the way that the highway express highway from the port was originally proposed would have cut off their sea access and so that was a real point of contention with the community there have been some proposals to allow them an underpass it's still a little bit unclear how that is finally going to be resolved even if those projects are eventually built there are serious questions about who will work there there is a problem with manpower of course in guadalajara it's a very small city and so one proposal has been well we'll just ship chinese workers in from china and build lots of fancy housing for them the first chinese-built community in pakistan a 500 million dollar development spanning over 10 million square feet with over 60 open spaces that kind of proposal is what makes a lot of the pakistani local people quite upset a guadal-based journalist expressed concerns to bloomberg over projects like this the journalist spoke anonymously for fear of persecution from the pakistan government these projects are creating jobs but they're not really creating jobs for the local people of gwadar they're not against economic prosperity but they're against the development that leaves them behind an official at cpic the private real estate investment company said it's made significant investments in the local community and that employment for gwadar residents remains a priority pakistan doesn't have the money to build these projects it's gone to the imf for its 13th bailout since the 1980s by engaging in cpec projects the government of pakistan has incurred more debts from china not only posing challenges for pakistan but possibly the international community if pakistan eventually defaults on its debts but cpec is still set to go on even if most current projects haven't been completed the two countries have recently signed new projects worth 11 billion dollars pakistan's prime minister said the country's economic future is linked with china [Music] it's hard to imagine how the china-pakistan economic corridor is going to be the game changer that the pakistan government would like it to be we're not seeing the economic growth or benefit from the projects that were set out we're supposed to have seen by now we're not seeing the job creation project delays accumulating debts commercial viability these problems of cpec are also typical of belt and road projects around the world for china though it's never the narrow accounting perspective that matters it's the bigger strategic benefits as china's dollars continue to flow as china's concrete continues to pour china's influence continues to increase you

Channel: Bloomberg Quicktake

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Keywords: News, bloomberg, quicktake, business, china+, pakistan, diplomacy, Xi Jinping

Id: AU1OvrbawE8

Length: 11min 49sec (709 seconds)

Published: Thu Jan 14 2021