Abstract

 CPEC is deeply interconnected with federal structural in Pakistan. There is a difference of opinion amongst the scholars and policy makers regarding the impact of CPEC on federalism in Pakistan. This paper is an attempt to analyse liberal framework of federation and its connection with neoliberal development project of CPEC. In neoliberal framework, the decentralization and distribution of resources amongst the federating units and sub-national identities seems complex puzzle. The dominant forces amongst federating units joined same elite class for the protection of their own interest. This elite concentration and bargain model is reciprocal to the fundamental idea of federation. This paper demonstrates that CPEC is sharpening the unevenness amongst the federating units and sub-national identities.

Key Words

Federalism, CPEC, Development, Pakistan, 

Introduction

The present chapter explains the various challenges related to CPEC as a game changer developmental project. The major challenges are disharmony among provinces, strategic impacts of CPEC on Pakistan, profit rate charged by China on loans regarding CPEC, its effects on Pakistan’s balance of payment, environmental issues, security costs, regional and international impacts, etc. 

These challenges are reaction to CPEC as developmental project in the context of developmentalism. Developmentalism's core idea (Bu?ra, A. 2017) is that a nation's productive structure may be suboptimal and can be improved through active economic policy. The concept is primarily based on the idea that some economic activities are projected more productive then others depending on their connections with dominant forces having control over means of production.  Moreover, on the other perspective is neo classical or neoliberal theory which is based on well-known economist David Ricardo theory of international trade which is conceived as notions bartering the same quality labour hours. 

The standardized theory of economic postulates that international trade brings nations closer to each other in terms of income. “On the other hand, developmentalism naturally understands that the integration of one nation with Stone Age technology and another nation with advanced high-tech technology will result in one nation specializing in being poor and the other nation specializing in being wealthy”. (Rankin, K. N. 2002). The ruling elites achieved legitimacy during the period of development of economic growth through the creation of increased wages and welfare of the masses. In present age neoliberal regime, the dominant and elite gain legitimacy by home country to join a perceived international club for maximizing their monetary benefits. 

This this 'club membership' may conflict directly with the nation's long-term economic interest (Reinert, E. S., 2010). The economic, social, political and strategic gains and outcomes of the CPEC project are too early to be assessed yet. But on the contrary, the challenges of the project have already marked the risks of potential political tensions between the federation and smaller federating units and within the provinces over unequal infrastructural development, distribution of resources and economic development. The less developed federating units of the country like Balochistan, Khyber Pakhtunkhwa and Sindh argue that the route of the corridor, its infrastructure, agricultural projects, mining and industrial parks are mostly concentrated in Punjab, which already possesses a dominant share and say in wealth and politics of the country. While in Punjab, the indigenous voices may challenge that opposition from the smaller provinces in many ways. 



Responses of Federating Units as a Challenge to CPEC

CPEC being a centralized long-term project is comprised of loans, investments and grants which can grow to around [US$ 62 billion] covers a 2,700km to 3,500km long route (Nag, R. M, nd) as shown in map.  Map showing the routes of CPEC Researchers and Officials are of the opinion that it would definitely support the struggling economy of Pakistan. Since Pakistan’s economy requires proper reform to better secure the interests and welfare of her people. However, the project has numerous challenges of political divide, widening social gapes and leading to new causes of political and economic conflicts among the federating units over the execution of CPEC in the country. Responses of the federating units over CPEC is directly linked with the federal structure of the state. In federation, federating units have the authority to run administrative affairs of the centre by mutual consensus. In federation, federating units have central role in developmental sphere. In Pakistani federal system, center have domination over federating units under the political narrative of national integration. The centralization of authority at centre drifted the federating units towards marginalization. This section comprised of responses of political representatives from federating units as they claim to represent people by drawing the legitimacy from representative democracy. Therefore, this study will primarily focus on responses of political representatives and officials from federating units. 




Punjab’s Response on CPEC

The province of Punjab has a conviction that she is not an exploiter of the multi – billion mega projects rather a victim of accusations by actually neglecting her due share from the socio-economic harvests of the project. country. 

Punjab has a key role in her contribution to the total GDP (Gross Domestic Product) of the country which is more than 57%. The province of Punjab spreads over an area of around 205,344 square km which covers almost 26% of the total topography of the. It has the highest population exceeding 96 million and there is a gradual increase per year. The ratio of literacy as compared to other federating units in many of her districts is also higher, which is almost 60 to 70% in comparison to 56% of the rest of the country (The Nation, December 29, 2018). Punjab is well connected through comparatively better infrastructure with all the three provinces in addition to Gilgit – Baltistan and Azad Kashmir. Punjab believe that the due share according to the size, infrastructure, communication links and population has been neglected and it’s a myth that all the mega projects have been concentrated in Punjab. The Planning and Development Department of Punjab, who is responsible of initiating developmental strategies has the opinion that Punjab is projected as major shareholder of CPEC but it is not true. Chief Economist Dr. Amanullah from Punjab’s Planning and development department said that Punjab has secured only tow projects under CPEC; one is Orange Line and other one is Allama Iqbal Industrial city. Major CPEC projects including motorways and energy are under the control of centre. Technically Punjab received funds directly from Chinese financial institutions not from federal government. Punjab’s planning and development department hoped that projects will spread over 3.217 acre and will attract investment of Rs. 357 billion or 2.3 USD billions to create 242000 jobs. (Tribune, 27 October 2019)



Table 1. Details of Energy Projects in Punjab Controlled by Federal Government are as:

Project	Sahiwal 2x660MW Coal-fired Power Plant, Punjab
Primary Energy Input	Coal (Imported)
Technology	Super Critical
Installed Capacity (MW)	1320
Location	Sahiwal
Province	Punjab
Estimated Cost (US $ Million)	1912.2
Executing Company / Sponsors	Huaneng Shandong Rui Group, China
Financing	Independent Power Producer (IPP)
Coordinating Ministry	Ministry of Energy (Power Division)
Supervising Agency	Private Power and Infrastructure Board (PPIB) / Punjab Power Development Board (PPDB)

Source: http://cpec.gov.pk/project-details/2

 

Table 2. Showing details of Solar Park

Project	Quaid-e-Azam 1000MW Solar Park (Bahawalpur) Quaid-e-Azam
Primary Energy Input	Solar
T echnology	PV Solar
Installed Capacity (MW)	400 600
Tariff	Co6t plus
Location	Bahawalpur
Province	Punjab
Estimated Cost (US $ Million)	520 781
Executing Company / Sponsors	Zonergy
Financing	Independent Power Producer (IPP)
Coordinating Ministry	Ministry of Energy (Power Division)
Supervising Agency	Punjab Power Development Board (PPDB) / Alternative Energy Development Board (AEDB)

Source: http://cpec.gov.pk/project -detail s/2

 

Table 3. Details of Infrastructure Projects in Punjab are in Table 5.3. 



Table Showing Details of Special Economic Zones Punjab

Project	Allama Iqbal Industrial City, Faisalabad
Project Description	Allama Iqbal Industrial City (AIIC) is the largest among pSEZs in terms of area with 3217 acres The Allama Iqbal SEZ has advantage for being adjacent to M3-lndustrial city which comprises of large number of projects including textile, pharmaceuticals, information technology, chemicals automotive, service complex, etc. Land has been acquired for AIIC, and construction work is in progress since November, 2019. Utilities provision in the Allama Iqbal SEZ will be completed in phases to be covered in year 2020, 2021, and 2022. Standard size of plot is minimum 1 acre available for investors in all prioritized SEZs. Faisalabad Industrial Estate & Management Company (FIEDMC) is the developing body of Allama Iqbal SEZ. A number of national and international companies have expressed their interest to start business units within AIIC. Based on businesses interest, the SEZ has great potential for attracting foreign direct investment (FDI), employment generation and contribution towards exports.
Location	Faisalabad
Province	Punjab
Location	Faisalabad
Province	Punjab
Area (Acres) 3217
Remarks		• Adjacent to existing SEZ of M-3 Industrial City, Faisalabad. • Sahianwala Interchange Motorway M-3

Source: hUp://cpec.gov.pk/proiect-details/2

Table Showing Details of Special Economic Zones Punjab

Project	Allama Iqbal Industrial City, Faisalabad
Project Description	Allama Iqbal Industrial City (AIIC) is the largest among pSEZs in terms of area with 3217 acres The Allama Iqbal SEZ has advantage for being adjacent to M3-lndustrial city which comprises of large number of projects including textile, pharmaceuticals, information technology, chemicals automotive, service complex, etc. Land has been acquired for AIIC, and construction work is in progress since November, 2019. Utilities provision in the Allama Iqbal SEZ will be completed in phases to be covered in year 2020, 2021, and 2022. Standard size of plot is minimum 1 acre available for investors in all prioritized SEZs. Faisalabad Industrial Estate & Management Company (FIEDMC) is the developing body of Allama Iqbal SEZ. A number of national and international companies have expressed their interest to start business units within AIIC. Based on businesses interest, the SEZ has great potential for attracting foreign direct investment (FDI), employment generation and contribution towards exports.
Location	Faisalabad
Province	Punjab
Location	Faisalabad
Province	Punjab
Area (Acres) 3217
Remarks		• Adjacent to existing SEZ of M-3 Industrial City, Faisalabad. • Sahianwala Interchange Motorway M-3

Source: hUp://cpec.gov.pk/proiect-details/2

Balochistan’s Response on CPEC

Balochistan, being the largest province of the country, which is almost 43% (Pakistan Bureau of statistics, 2020) of the total land of Pakistan, expected a huge share in the socio-economic benefits of CPEC. As negotiations on the project started with Chinese government in 2013 during PPP (Pakistan Peoples’ Party) era in Pakistan but the project was officially finalized in 2015 during PML-N (Pakistan Muslim League - Nawaz) government. So, majority of the CPEC projects were to be concentrated in Punjab province as PML-N had secured her victory mainly through the voters of the very same province—instead of Balochistan. Corruption was yet another complain by the masses and Chinese government which mounted pressure on federal government of Pakistan. It further aggravated the situation and widened the gap on trust level between the centre and smaller provinces, particularly Balochistan. Daud Khan Achakzai, the then Senator from Balochistan, declared CPEC as, the China-Punjab Economic Corridor, in 2015 since in his view it will largely serve the interests of Punjab and not the smaller provinces. (Muhammad Shafique, 2018)



Moreover, a couple of highways (N–50 and N–70) were inaugurated by the then Prime Minister Nawaz Sharif in 2015 which were to be funded by ADB (Asian Development Bank). Despite of the fact that these projects were to be funded by ADB, they were claimed as part of the western route of CPEC. It put a question mark on the role of federation regarding the distribution of development projects of CPEC. The CPEC Cell of Balochistan government has recently reported that the work progress on the Western Route of Balochistan is very slow and it stated that outside of Gwadar the progress on the development is far behind as compared to other provinces and even a number of projects have not been accepted as part of the CPEC.



Balochistan’s Response on CPEC

As per the statement of Chairman National Highway Authority, Cap® Muhammad Khuram Agha, 22.7 KM long dualization of Quetta Western Bypass will be completed with the cost of RS 3938.78 million. It will be completed in 24 months and will created 1715 jobs. Further 11 Km long Dera Murad Jamali bypass will be completed with the cost of Rs 1456.3 million. Federal Minister for Communication and Postal Services, Murad Saeed said that 1100km long highways were planned during previous fifteen years and in the last two years 3300km long national highways are under construction on western route. (The News, 29 April 2021). Western route is a primary route of CPEC known as M8. It is a shortest route to connect Kashghar. It starts from Gwadar and pass through Turbat, Panjgur, Basima, Qalat, Quetta, Zohb to DI-Khan and connected with Hassan Abdal. 

Moreover, Gwadar, a main hub of CPEC is located in Baluchistan. A contrasting response are there on Gwadar development. Muhammad Ishaq, a local councilor stated that Gwadar Development Authority is not executing the development projects effectively. Amanullah Askani, senior engineer of Gwadar Development authority said that manual work causes the delay of developmental activities. Akhtar Mangal, a former Chief Minister of Balochistan also shows his reservation of power shortage in Makran region where Gwadar town is located. Baluchistan need 1600megawatts electricity, but it is getting 300 megawatts. (Baluchistan Affairs, March 10, 2017).  The details of power projects in Baluchistan is as: 

Table 5

Showing Energy Projects



Table 6

Showing Infrastructure Projects 






In addition to that the potential threat of violence against CPEC is yet another challenge posed by the Baloch nationalists, may also undermine the investment coming through CPEC. The Baloch nationalists and even the moderates have already expressed their reservations over the CPEC projects. Both nationalists and moderates believe that CPEC would change the demography of the region and the indigenous population would turn into an ethnic minority in their own province. On account of such concerns and other economic-political grievances, the separatists Baloch like Balochistan Liberation Army (BLA) have repeatedly attacked the security and law enforcement agencies in Balochistan. They extended the circle of their attacks on Chinese nationals in a hope to discourage Chinese authorities from investing in CPEC. The attack on Karachi Stock Exchange was also an attempt to disrupt Chinese investment in Pakistan and BLA accepted its responsibility. (AlJazeera, 29 June 2020). On the other side pro center political leaders including, “Malik Sikandar Khan, leader of opposition in Balochistan Assembly, MPA Sanaullah Khan Ba¬loch, Abdul Khaliq Haz¬ara, Chairman of Haz¬ara Democratic Party, Dr. Ishaque Baloch from Na¬tional Party, Prince Agha Umer from Balochistan Awami Party, Jaffar Khan Mandokhel President – PML-Q Balochistan, and Dr. Hayatullah Khan Khil¬ji - Member of Provincial Council and CEC ANP reiterated their commitment towards making CPEC a success”. (The Nation, July 12, 2020).

Khyber Pakhtunkhwa’s Response on CPEC

The initial response of KPK (Khyber Pakhtunkhwa) regarding CPEC was also critical since the then CM (Chief Minister) Parvez Khattak expressed his dissatisfaction and concerns over the share of KPK. The CM was not satisfied with the role of Federal government when he came to learn after having a meeting with the Chinese ambassador that the West route was not part of CPEC. 

Under such circumstances, the CM was so annoyed that he issued a statement in the PA (Provincial Assembly), “In such a situation, the CPEC won’t pass through KP”. (The Nation, October 8, 2016). Mr. Khattak emphasized on the importance of CPEC for the development of KP, which is part of the country like the other provinces. The Provincial Assembly adopted a resolution calling for the center to fulfill its multibillion-dollar project commitments. It was the fifth resolution passed unanimously by the assembly which demanded the due share of the province in the CPEC project. The then KP government had a wide consensus that the investors would not even bother to invest in KP if the Western route was not developed in such a way like the central route in Punjab, which would enjoy connectivity through motorways and railways, security checks, electricity, and fiber optic. (The Nation, October 8, 2016)

Moreover, Nationalist politician Asfandyar Wali Khan, the leader of ANP (Awami National Party) also showed his reservations over the original plan for the Western route of CPEC. He also termed it as “China Punjab Economic Corridor” (The Dawn, February 17, 2016) while addressing a public gathering at Charsada/KP, as in his view, the federal government changed the original plan for CPEC. He stressed upon the federal government not to deny the due share and rights of Pakhtuns and Balochs and to execute the final plan for western route which include the southern districts of KP and northern districts of Balochistan. (The Dawn, February 17, 2016)



Additionally, the security threats posed by TTP (Tehrik e Taliban Pakistan) in the former tribal areas are also adding to the challenges of the multibillion projects of CPEC. Though the military operations like “Zarb e Azb” and “Rad al Fasad” against TTP and other terrorists groups have changed the security situation to a great extent but the normalization of the situation can only be achieved through a political dialogue and by bringing development infrastructure to the region to harvest the fruits of CPEC in its true letter and spirit.     

Table 7

Showing details of CPEC Projects in Khyber Pakhtunkhwa:



Table 8

Showing Infrastructure Projects Infrastructure Projects



Table 9

Showing Details of Hevellian Dry Port 



Table 10

Showing Special Economic Zones 



Sindh’s Response on CPEC

The early response of Sindh was also not very different from other smaller provinces of the country as the civil society of Sindh raised her objections over the projects of CPEC.

For instance, a discussion which was organized by the Strengthening Participatory Organisation and the Sindh Economic Forum, the former Federal Secretary and Analyst Mr. Fazlullah Qureshi stated that CPEC was a political gimmick being tailored by ruling elite in the centre to strengthen her position in the process of political representation of Punjab in particular. 



In his views, “The benefits for Sindh from the CPEC lies with construction of Keti Bandar port in Thatta district but unfortunately the province and the federal government have not even begun the feasibility study of the port.” (The News, January 25, 2016).

He further added that facts were being distorted regarding the CPEC projects in Sindh, since the ongoing projects of Thar coal were made part of CPEC which makes no sense as the Sindh government and its partners were already working on it. Like the concerns of KP, Sindh also expressed her reservations regarding the investment in industrial zones, as it would be up to the investors where to invest. Besides that, out of initial 46 billion US$ of CPEC, 35 billion US$ were allocated alone for energy sector, mostly on coal that can have serious climatic challenges. (Ahmad Rafey Alam, China Dialogue, January 03, 2020)

Apart from that, the province of Sindh produces more than 70% of the wealth in Pakistan. It has 72% of the gas and 55% of the oil reserves of the country and the 6th largest coal deposits in the world which is over 95% of the total coal reserves in the country. (Pakistan Economic Survey, 2018-19). Keamari Sea port and Muhammad Bin Qasim Sea port are the only operational seaports of the country for import and export. Besides that, the urban and rural population, provide both skilled and unskilled workforce to the Industrial and other employment sectors. But on account of systematic exclusion of Sindhis from the CPEC and ruthless exploitation of their resources have increased their concerns.  Henceforth, they believe that CPEC would bring further misery and destruction rather any real social uplift. 

In addition to that, the security of all CPEC routes would be under the tight control of army with the support of Satellite surveillance which means permanent monitoring of private life of the people that may result in human rights issues. Also, as discussed earlier that 75% of electricity will be generated from Sindh coal. It would definitely have devastating effects on the ecosystem, habits, marine life and on the natural environment as well which can further deteriorate the soil, air and underground water resources. 

Table 11

Showing Details of CPEC Projects in Sindh



Table 12

Showing Details of Wind Power Plants 



Jobs created through CPEC, would go to the people from other areas since hundreds of Chinese have already started working in Sindh. According to Sindhis view, they have not been consulted in the CPEC process at all. They have a conviction that the project is to further strengthen the domination of the dominants because they believe that the project cannot empower them without their participation according to their size and strength of socio-political fabric (www.humanrights.asia ).  

Response of Gilgit-Baltistan

The people of GB (Gilgit Baltistan) strongly opposed the CPEC plan on account of numerous grounds. Initially, the plan didn’t come under discussion with the people living in Gilgit Baltistan who share the border with China and the route is to pass through Khunjrab pass. The natives have the same feelings like people in other smaller provinces of Pakistan that CPEC may benefit the national narrative of Pakistan and that most of the projects would be initiated in Punjab. They are concerned that Gilgit Baltistan's estimated 10,000 workforce will become unemployed once the existing dry port is moved from Sost in Gilgit Baltistan to Havelian in Pakistan (Akins, H. 2017). 



Source: Survey of Pakistan




Moreover, the people of GB are not represented in the National Assembly of Pakistan so they may not voice their say at a higher legislative forum to safeguard their socio-economic and political interests. The exploration of mineral resources in the region would deprive the locals of their lands and resources. Reports have revealed that the indigenous owners of these lands are gradually barred from going to those lands. Thus, the people's voice over resources, minerals, forests, gold mines and tourism are under the direct control of the Gilgit Baltistan Council, headed by Pakistan's Prime Minister. So, people from GB have even protested in Islamabad and demanded a due share in the projects of CPEC. Table showing details of CPEC projects in Gilgit Baltistan. 

Table 12



Table 13

Showing details of Special Economic Zones 



People are also concerned about the environment degradation as GB is already facing the problem of environmental loss, climatic change and both air and water pollution. Deforestation and melting of glaciers would also adversely affect the natural environment (www.efsas.org). 

Consensus over CPEC

The census over CPEC is important for its successful implementation. The consensus models depend on social and economic articulation of society having core indicators as reflected in following diagram.



Consensus over CPEC

Kevin L. Sager and John Gastil. (2006). The Origin and Consequences of Consensus Decision Making: A Test of the Social Consensus Model. 

The representatives of both Federal and Provincial Governments developed a consensus over the successful completion of CPEC considering the framework of above consensus model. In a meeting held on December 2017, the representatives agreed to reduce the friction and put an end to the divide over project implementation in order to maximize the outcome so that the government could serve its people in a better way. The meeting was chaired by Mr. Ahsan Iqbal, The then Federal Minister for Planning, Development and Reforms (PD&R) the then Federal Minister for Planning, Development and Reform (PD&R). In this meeting the representatives of provinces which include Chief Minister and Governor from Khyber Pakhtunkhwa Mr. Pervez Khattak and Mr. Zafar Jhagra, Chief Minister Gilgit Baltistan Mr. Hafiz-ur-Rehman, Minister of Transport Government of Sindh Mr Nasir Hussain, Minister Industries Punjab Allaudin, Mr Saifullah Chatta, Chief secretary and Dr. Najib Naqi Khan, Minister for Planning and Development Azad Jammu and Kashmir. Besides that, the meeting was also attended by the federal and provincial secretaries along with other senior officials. “Federal Government wishes to ensure inclusion of all provinces and territories to benefit from the gigantic project of CPEC (www.cpec.gov.pk)”, statement issued by Mr. Ahsan Iqbal to the media after the meeting. The Chief Minister KP, Mr. Pervaiz Khattak and other participants also vowed to fully support the success of the project. The participants agreed that the projects in CPEC will open doors for an era of development and that “we all should think beyond our personal affiliations and partisan politics and instead work jointly to ensure successful completion of this fate changer project”. (http://cpec.gov.pk/news/15). Chief Minister Gilgit Baltistan, Mr. Hafeez Ur Rehman focused on the importance and internal political unity to complete this project. Minister for Transport Sindh, Nasir Hussain Shah said, “Pakistan People’s Party takes full ownership of CPEC as it aims on development across the country”. Allau Uddin, Minister for Industries Punjab said, “We are working to ensure creation of maximum jobs through CPEC projects” (www.cpec.gov.pk). Minister Planning and Development Azad Kashmir Dr. Najeeb Naqi Khan appreciated federal government for considering several road projects for Azad Kashmir under CPEC. He elaborated ongoing developmental projects on CPEC and persuaded provincial administrative and political machinery to propose economically feasible sites on the principle of marketing and investors’ interests not the wishes. However, he does not explain the wishes whether it is local interests or other.  “He urged all the stakeholders to work jointly against those lobbies who are waging campaigns to mislead the masses and make this project controversial” (cpec.gov.pk/news/15). But there is a need to do more research on political narratives on CPEC and idea of “leading” and “misleading” regarding infrastructural development. 

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