Wednesday, March 22, 2017

Most important Gilgit Baltistan, but people have no value in the eyes of China, Pakistan and India

Both India and Pakistan have joint Strategy to blackout Human Rights Violation of PoGB (Pakistan Occupied Gilgit Baltistan)

I am sorry to say that the world  Media either ignorant or intentionally neglect the grave Human Rights issue of  PoGB (Pakistan Occupied Gilgit Baltistan). BNF leaders and workers who demand for freedom and opposed CPEC were arrested and tortured by JIT (Joint Investigation Team for 20 days and then imposed terrorism charges. Pakistan  media and Media in PoGB and PoK are totally under the control of ISI and have no courage to utter a single words without its permission. The only media Kargil International and Daily Baangeshar were banned and Banagesahar Chief Editor is in the Jail framing him terrorist, because he dare to write the grave human rights situation of PoGB, which is terrorism in the unwritten books of occupation regime of Pakistan. Indian media only mentions PoK and Balochistan but not PoGB (Pakistan occupied Gilgit Baltistan) in its rare news. When it mentions Gilgit Baltistan it does not say Pakistan occupied Gilgit Baltistan. The people of PoGB, PoK and even Pakistan does not consider PoK as PoGB.  PoGB is the most important area of the dispute, its 7 times bigger than PoK in size, its strategic most important (it’s the only area which provides physical link between China and Pakistan, it has borders with Afghanistan and Tajikistan) in the whole J&K issu.It has huge resources including water,  Gold and uranium. Its the area which provides lion share of water by Indus river to make green Punjab and Sindh besides KPK. The people of PoGB think, that it’s the strategy of both India and Pakistan to blackout PoGB Human Rights issue  and keep the 2 million indigenous people of this UN disputed land slave as long as possible.  

It’s the area where CPEC pollution will be inhaled and no share in the CPEC business. It’s the area where Pakistan and China are benefiting by ignoring the demands and rights of its inhabitants. This is the most deprived part of the world, where people have no right to vote to elect their representative, people have no right to access to Justice and people have no right over their own lands and resources.

Abdul Hamid Khan
Balawaristan National Front (BNF)
Head Office: Majini Mahla, Gilgit, Balawaristan (Pakistan & China Occupied Gilgit Baltistan)

Pakistan is Terrorizing Indigenous People of a neglected constitutional part of India

Date: March 15th2017

His Excellency

Mr. Narendra Modi

Prime Minister of India

New Delhi

Sub: Pakistan is Terrorizing Indigenous People of a neglected constitutional part of India

I have the honour to submit some chilling facts about the atrocities committed by Pakistani regime against 2 million indigenous people of a neglected constitutional part of India, Pakistan occupied Gilgit Baltistan. Political activists and religious persons and students of Pakistan occupied Gilgit Baltistan (PoGB) who do not comply with ISI’s dictation have been framed under anti-Terrorist act of Schedule 4. But the real terrorists who bomb and kill innocent civilians in Shrines, Mosques, Roadways and other places are free to roam. It’s no secret that Hafiz Saeed, the head of Lashkar-e-Toiba who has been banned by the UN, is a highly respected terrorist in Pakistan. This is clearly shown by the fact that he has been awarded a de-facto status like that of a king by keeping him in his house under tight security cover, so that nobody, not even USA would be able to get their hands around him. There are thousands of terrorist individuals and more than a dozen terrorist organizations active within different Madrasas, religious and political parties who are enjoying full impunity under Pakistan government institutions.

Those terrorists who killed thousands innocent people of PoGB (Pakistan occupied Gilgit Baltistan) on KKH and in Gilgit have not been brought to Justice to this day. All the government sponsored terrorist organizations are active in Pakistan, but more than 150 people of PoGB are facing this Chinese type of draconian law (subjecting them to worst conditions than a prison, whereby the persons are taken bare to the Hospital for treatment, and School to get his minor child).

The occupying regime of Pakistan wants to create fear among the indigenous people of PoGB, so that nobody could dare raise their voice or ask for their rights in contrast to the will of Pakistan. Those who violate Pakistani orders by demanding something peacefully are declared as terrorists. It’s such a disgraceful irony that on one hand Pakistan is sending its terrorists to bully and shut the people of occupied Gilgit Baltistan, and on the other hand it demands freedom for Indian Controlled J&K. To camouflage its acts of terrorism against Indian Occupied J&K, Pakistan has now falsely framed BNF (Balawaristan National Front) workers under its terrorist laws to blame India. The indigenous people of PoGB and BNF particularly have no place to file an appeal/writ against these Pakistani allegations and slanders and atrocities because there is no legal/constitutional Judicial system in this UN-declared disputed part of J&K.

BNF (Balawaristan National Front) has been banned and our books and booklets and newspapers have been banned, while religious hatred and anti-Gilgit Baltistan propaganda is fully supported by Pakistani occupation regime.
The lives, property and freedom of the people is under serious threat due to Pakistan and China’s joint conspiracy to strengthen their occupation under the garb of CPEC (China Pakistan Economic Corridor).
Mostly BNF workers and the lives of some other nationalists is under serious threat, as a result of their constant struggle against the occupation of Pakistan since 1992. Some terrorists are acting on their own when they feel cheated by ISI while many others are directed by ISI against their religious and political opponents. However, in Gilgit Baltistan (under occupation of Pakistan), where no terrorist organization

has been reported by Pakistani occupying regime, about 150 people have been charged under Schedule 4.

A few youths from PoGB,  have been purposefully misguided, trained by ISI, and recruited into different terrorist organizations, but they do not live in PoGB.

The peaceful indigenous people of PoGB and nationalists are facing serious threats, because they are not willing to bow to the dictations of Pakistani forces, who have choked their legitimate voices and grabbed their lands to build cantonments and torture cells for Pakistani and Chinese forces and their intelligence agencies. We may recall that under the Truce Terms of UNCIP resolution, Pakistan has absolutely no right to remain in this disputed land, because Pakistani forces and its civilians had to withdraw within a period of 3 months after this UNCIP resolution passed on 28th April 1949. After lapse of 68 years of non-complying, Pakistan rather has virtually changed the whole 72000 Sq KM area of this UN declared disputed region in to Military Torture Camp.

People have no Right of vote, freedom of speech and access to Justice

i.                    People have no right to choose their representative either in India or Pakistan parliament.

ii.                  Freedom of expression is 100% violated

iii.                Access to Justice is denied, because there is no Legal/Constitutional High Court and Supreme Court.


Pakistani political and religious parties are fully sponsored by its Military power to practice on their will, but indigenous nationalist political parties voices are chocked by declaring them as terrorists, anti-national and traitors etc, who dare to oppose CPEC and Pakistani occupation, which is flagrant violation of not only UNCIP resolutions but it ridicules Universal Declaration of Human Rights and even violates Pakistan’s own constitution and Court verdicts.

BNF members and others who have been sent to Jail in false case can be hanged or kept in prison for life without giving them the right to appeal in any impartial, legal/constitutional High Court and Supreme Court. One Naveed Hussain from Bargo, Gilgit was hanged in fake case without international recognized legal process.

BNF appeals your honour as last hope to take concrete step to take over the control of this disputed region as per your speech on 15thAugust 2016 from the red fort.

BNF and other Political and religious workers in Pakistan occupied Gilgit Baltistan are facing death sentence in fake cases by blaming them of Indian agent, without right of appeal in any High Court and Supreme Court.

Please read the below list of the accused in fake cases to nullify India’s blame of Pakistan’s own sponsor terrorism by using its banned terrorists in Indian side of Jammu & Kashmir.

Abdul Hamid Khan
Balawaristan National Front (BNF)
Head Office: Majini Mahla, Gilgit, Balawaristan (Pakistan & China Occupied Gilgit Baltistan)

          Ph: 0032 22311750


 The following BNF (Balawaristan National Front)  workers and leaders are currently in Jail:
 1.     Majeedullah Khan (from Yasen) arrested on 2nd  Oct 2016, seriously tortured by JIT (Joint Investigation Team, included all the Pakistani agencies and Police under the  ISI) and a staged drama was played out alleging recovery of 8 Klashinkovs from him. He was tortured untill 25th  October 2016 and then sent to Jail on the same day by declaring him an Indian agent.
 2.     Sanaullah Khan, (brother of Majeedullah Khan; my brother in-law and cousin From Yasen) a student who was living in Rawalpindi for study has been arrested on 4th  Oct 2016 from Rawalpindi by ISI and Police, and sent to Jail on 25th October 2016 on judicial remand on terrorist charges. His fault was to send Brooshaaski language books to Gahkuch, district Ghazer.
 3.     Qoowat Khan, President BNF Yasen unit
 4.     Sher Hafas- member BNF (from Yasen), released on bail
 5.     Mohammad Wali (Ex-hawaldar), member BNF, from Yasen, 
 6.     Imamdad, who is my  has been arrested on charges of involving in public gathering in Yasen on 8th  September 2016.
 7.  Inayat Karim  has been arrested on 30thSeptember 2016, charged on collecting books and pamphlets. Sent to Jail on 25th  October 2016 on judicial remand.
 8.  Sajjad Karim  a minor student sent to Jail on 25th  October 2016 on judicial remand. He was released on bail by Shabaz Anti-Terrorist Judge on 03rd  December 2016.
 9.     Qayoom Khan GS BNF Ghazer and candidate GBLA, arrested in Schedule 4 on 26th August 2016 from Yasen, because he participated in a meeting without permission.
 10. Qoowat Khan President BNF Yasen Unit, once released and re-arrested on 12th  Oct 2016 and sent to Jail on 25th  October 2016.
 11. Marooko (Haveldar retired) from Yasen on 8th September 2016
12. Safdar Ali, Central President BNF, arrested on 12th  Feb. 2017, when he was going to address the Media, along with Advocate Mahboob Ali, to refute IGP Zafar Awan’s false allegations against BNF Chairman and its members.
 13. Mahboob Ali Advocate arrested on 12th Feb. 2017, when he was going to address the Media, along with Safdar Ali, to refute IGP Zafar Awan’s false allegations against BNF Chairman and its  members. Both Safdar and Mahboob sent to Jail after 7 days of JIT torture.
14. Daulat Jan, Chief Editor Daily Bangesahar (Urdu) and weekly Baang (Eng) was arrested under schedule 4, because of his journalistic endeavors.

The list below consists of members of BNF who were arrested under Schedule 4.
1.     Qayoom Khan, General Secretary district Ghazer, president Yasen unit and ex candidate GBLA, is in Jail, arrested on 26th  August 2016, tortured by JIT with false cases registered against him.
2.     Safdar Ali Central President BNF  arrested on 12th  Feb. 2017, just before his Press conference in Gilgit


3.     Aafaq Ahmad (Aafaq Balawar), Gilgit
4.     Asif Ali Ashraf, Yasen
5.     Aslam Inqalabi,  from Yasen
6.     Burhan, General Secretary, Gilgit
7.     Daulat Jan, Chief Editor Bangesahar, Yasen
8.     Liaqat Ali (N.Sub. Ex ISI)  from Yasen
9.     Mohammad Rafiq, Vice Chairman, BNF from Gilgit
10.   Mohammad Wali (Ex-Soldier),  from Yasen
11. Saqib Umar, Kashorot Gilgit
12. Sher Nadir Shahi, Yasen
13. Wazir Shafi (Advocate),  from Yasen

Those who fled the country due to dire threats to their lives:
1.     Adv. Shokoor Khan was forced to flee PoGB on 14th  December 2016, due to severe threats to his life. His only crime is being my brother, and refusing to take ISI’s order to be their agent against me and BNF.
2.     Sher Nadir Shahi fled on 22nd  October 2016, because of severe threat to his life. He is Coordinator of BNSO (Balawaristan National Students Organization).
3.     Shahid Hussain, BNF leader and Chief Coordinator of BNSOB and ex candidate of GBLA from Gilgit has disappeared after threats to his life

42 civilians abducted by Security Forces in different areas of Balochistan

 by hakkpaan ,  March 21, 2017

On March 20, 2017, Pakistan Military abducted 42 persons in multiple military operations in different areas of Balochistan.

According to reports, Pakistani military launched a massive house-to-house search operation in  Darkop area of Gichk district Panjgur, Balochistan on Monday morning.

Mohammed Ayoub was abducted along with two of his sons, Saddam and Haneef. Other civilians abducted in this Military operation, include Mir Jan Bakhtiyar, Omet Honak, Abdulrehman Omar, Mohammed yar Sher Mohammed and washdil Diljan.

60 years old Bahram Usman was abducted by security forces in Pannodi area of Dasht, district Kech and
Hammal Anwar from Malant area of Tump, district Kech.

Akram Washdil

21 years old student, Akram washdil was abducted along with another student, Bilal Imam Bakhsh from Absar area of Turbat, distrcit Kech, while Shokat (mistri) Wahid Bakhsh was abducted from Hoshab area of district Kech.

Another Military Operation was conducted in Pirandar area of district Awaran on Monday morning. Noor Bakhsh, Noora Gulab, Washdil, Timor Khan, Mumtaz,Naheem, Hassan, Wasim, zahid, Hammal and Habib were reportedly abducted during the operation.

In Gazzi area of district Awaran, Yaru, Patan, Akhtar, Khuda Bakhsh, Haroon, Pindu, Dadu, Mehmood, Rahim Bakhsh, Amin, Wahid, Hasil, Nabi Bakhsh, Sahru, Sarwar, Mumtaz and Ghulam Jan were abducted during a Military operation on the same day, Monday morning.

In Dez area of Parom, district Panjgur, security forces attacked a house and severely tortured women and children. A civilian, Daud Lal, was beaten up and his hand was broken by the security forces

Competition From China Reduced Innovation In US – Analysis

China's flag. Source: Wikipedia Commons.


The discussion of the decline in US manufacturing during the 2016 presidential election campaign largely focused on job losses. This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector – innovation. Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.

By David Autor, David Dorn, Gordon Hanson, Gary P. Pisano and Pian Shu*

The decline of the US manufacturing sector played such a prominent topic in the 2016 presidential election campaign that New York Times journalist Binyamin Appelbaum wondered in a headline “Why Are Politicians So Obsessed With Manufacturing?” (Appelbaum 2016). Much of the concern about the health of the manufacturing sector derives from the observation that its employment level is near historic lows. Ever since the end of the Great Recession, the sector has employed fewer than 12.5 million workers – the lowest job count in manufacturing since the US entered WWII in 1941. Manufacturing lost almost 6 million jobs during the 2000s alone, and strikingly, most of this decline came before the onset of the Great Recession.

Despite the poor employment performance in the 2000s, however, value added in manufacturing has been growing as fast as the overall US economy. Its share of US GDP remained stable, an achievement matched by few other high-income economies over the same period (Moran and Oldenski 2014). While the extraordinary growth of value added in the computer and semiconductor industries masks a more sluggish performance in other manufacturing industries (Houseman et al. 2014), the sector’s output growth clearly exceeds its employment growth.

Another metric for the health of the US manufacturing sector, which has been less present in the recent debate, is its production of innovation as measured by patents. Manufacturing is the locus of US innovation and accounts for more than two thirds of US R&D spending (Helper et al. 2012) and for a similarly large share of US patents. Figure 1 shows that the annual number of patents awarded to US-based firms (dated by the year of patent application) doubled from less than 40,000 in 1991 to more than 80,000 in 2001, but subsequently declined through 2007.

Figure 1 US innovation and imports from China

Source: Maas (2017) based on authors’ calculations using the U.S. Patent and Inventor Database and the UN Comtrade Database.

During the 1990s, and especially the 2000s, the US manufacturing sector was exposed to a rapid surge in import competition from China. Figure 1 shows that imports from China increased more than tenfold between 1991 and 2007. Most of that growth occurred after China’s accession to the WTO in 2001, which coincides with the trend reversal in US patent production. The Chinese export boom was triggered by a series of economic reforms that included the establishment of Special Economic Zones for the production of export goods, and an easing of restrictions that had hindered firms’ access to labour, capital, and technology. The emergence of China as the world’s leading exporter of manufactured goods has been a major competitive shock for manufacturing firms in the US and elsewhere (Autor et al. 2016).

Although a now substantial literature evaluates the impact of China’s rise on labour market outcomes such as industry employment (Pierce and Schott 2015, Acemoglu et al. 2016) and workers’ earnings (Autor et al. 2014), far less is known about the impact of trade on innovative activities in US firms and industries. The effect of more intensive product-market competition on innovation is theoretically ambiguous. In standard oligopoly models, greater product market competition lowers profits and reduces incentives to invest in innovation. However, greater competition may also induce more innovation, either if pre-innovation rents fall relative to expected post-innovation rents (Agion et al. 2005), or if firms redeploy slack factors from goods production to innovation activities as competition depresses the demand for the firms’ products (Bloom et al. 2014). Indeed, a European study finds that firms in several European countries innovate more when Chinese imports increase in their industries, even as their employment level falls (Bloom et al. 2016).

In a recent paper, we analyse the impact of Chinese import competition on innovation in the US (Autor et al. 2016). Our analysis draws on all US corporate patents with application dates from 1975 to 2007 that are granted by March 2013. To obtain more information about the firms that applied for these patents, we use the firm names indicated on the patents to match them to firm data from Standard & Poor’s Compustat database. One challenge in this matching process is that patent records often contain different versions, abbreviations, and (mis-)spellings of a firm’s name, so that the names on patents do not correspond exactly to those in the firm database. We overcome this problem by constructing a novel matching algorithm that leverages the capabilities of an internet search engine. In a first step, we enter every firm name string that appears in the patent or Compustat data into the search engine, and we collect the URLs of the top five search results. We assign a patent to a Compustat firm if the corresponding firm name strings lead to at least two common URLs. This fully automated procedure builds on the web search engines’ capability to detect a company homepage or other webpages relating it even if the firm name’s is abbreviated or misspelled. Overall, we match almost three quarters of all corporate patents to Compustat, which covers companies listed on US stock markets.

The overall growth in corporate patents shown in Figure 1 masks important heterogeneity in patenting trends for the two sectors that contribute the most to overall US patent output. The computer and electronics sector increased its share in overall US patents from 10% in 1975 to 35% in 2007, and accounted for almost all the growth during the 1990s seen in Figure 1. By contrast, the chemical and petroleum sector’s contribution to US patent output fell from 27% in 1975 to 10% in 2007, as the number of annual patents from this sector declined over time. Both the growth in computer patents and the decline in chemicals patents began well prior to the surge of Chinese exports in the 1990s. This observation is important because import competition from China hit the computer sector much more than the chemical industry, yet it would be erroneous to attribute the superior innovation performance of the computer sector to its greater import exposure, given that the acceleration in patenting in that sector predates the exposure to China trade.

The central finding of our regression analysis is that firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output. A one standard deviation larger increase in import penetration decreased a firm’s patent output by 15 percentage points. Using data from the 1975 to 1991 period and a regression setup that accounts for the diverging secular innovation trends in computers and chemical, we confirm that firms in China-exposed industries did not already have a weaker patent growth prior to the arrival of the competing imports.

The firm data allow us to embed the patent analysis in a wider context of other indicators for the activities of firms. Importantly, we find that import competition not only reduced patenting but also firms’ R&D expenditures. Import-competing firms further experienced declines in global sales, employment, capital stock, and stock market value. They were more likely to suffer a decline in operating profits.

The innovation activity of US firms did not merely shift from the US to other countries. We estimate similar negative effects of import competition on patents by US firms’ domestic employees and by their foreign employees. Instead, our results are most consistent with the notion that the rapid and large increase in competition squeezed firms’ profitability and forced them to downsize along many margins, including innovation. Consistent with that interpretation, we find that the adverse impact of import competition on patent output was concentrated in firms that were already initially more indebted and less profitable.

The decline of innovation in the face of Chinese import competition suggest that R&D and manufacturing tend to be complements rather than substitutes. That is, when faced with rapidly intensifying rivalry in the manufacturing stage of industry production, firms tend not to substitute effort from production to R&D. While politicians’ ‘obsession’ with manufacturing is primarily due to the sizable employment losses in the sector during recent decades, an accompanying reduction in innovation may well affect economic growth in the longer term.

*About the authors:
David Autor, Ford Professor and Associate Head, MIT Department of Economics

David Dorn, Chair of International Trade and Labor Markets, University of Zurich

Gordon Hanson, Pacific Economic Cooperation Chair in International Economic Relations and Director of the Center on Emerging and Pacific Economies, UC San Diego

Gary P. Pisano, Harry E. Figgie Professor of Business Administration, Harvard Business School

Pian Shu, Visiting scholar, MIT Sloan School of Management; Assistant Professor, Harvard Business School

Acemoglu, D, D Autor, D Dorn, G H Hanson and B Price (2014), “Import Competition and the Great US Employment Sag of the 2000s.” Journal of Labor Economics, 34: S141-S198.

Appelbaum, B (2016), “Why Are Politicians So Obsessed With Manufacturing?” New York Times Magazine, October 4.

Aghion, P, N Bloom, R Blundell, R Griffith and P Howitt (2005), “Competition and Innovation: An Inverted-U Relationship.” Quarterly Journal of Economics, 120: 701-728.

Autor, D, D Dorn and G H Hanson (2016), “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.” Annual Reviews of Economics, 8: 2015-240.

Autor, D, D Dorn, G H Hanson, G Pisano and P Shu (2016), “Foreign Competition and Domestic Innovation: Evidence from U.S. Patents.” CEPR Discussion Paper No. 11664.

Autor, D, D Dorn, G H Hanson and J Song (2014), “Trade Adjustment: Worker-Level Evidence.” Quarterly Journal of Economics, 129: 1799-1860.

Bloom, N, M Draca and J Van Reenen (2016), “Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity.” Review of Economic Studies, 83: 87-117.

Bloom, N, P M Romer, S J Terry and J Van Reenen (2014), “Trapped Factors and China’s Impact on Global Growth.” NBER Working Paper no. 19951.

Helper, S, T Krueger and H Wial (2012), “Why Does Manufacturing Matter? Which Manufacturing Matters? A Policy Framework.” Brookings Institution Policy Report.

Houseman, S, T J Bartik and T J Sturgeon (2014), “Measuring Manufacturing: How the Computer and Semiconductor Industries Affect the Numbers and Perceptions.” Upjohn Institute Working Paper no. 14-209.

Maas, S (2017), “Competition from China Reduced Domestic Innovation.” NBER Digest, February.

Moran, T H and L Oldenski (2014), “The US Manufacturing Base: Four Signs of Strength.” Petersen Institute for International Economics Policy Brief PB14-18.

Pierce, J R and P K Schott (2016), “The Surprisingly Swift Decline of U.S. Manufacturing Employment.” American Economic Review, 106: 1632-1662

Pakistan: CPEC - A “game-changer” or another “East India Company”?

21 March by Abdul Khaliq


Gwadar, Pakistan - The heart of CPEC (China-Pakistan Economic Corridor) - (CC - Flickr - mairadeeb)

China-Pakistan Economic Corridor (CPEC) is a big business proposition with huge Chinese investments spreading over 15 years having a total outlay of up to $46 billion: $35 billion on the energy sector in the mode of IPPs (independent Power Producers) and $ 11 billion for infrastructure development; like industrial zones roads and railways etc. A good part of these investment projects comprises loans from Chinese banks, whose details are still not public, generating fears of further indebtness of already loan-riddled Pakistan. Construction of 3,218 km long route from Chinese province of Kashgar to Pakistani port of Gawadar, is seen as hallmark of this CPEC project. Through this shorter route, Chinese goods will have easier access to the Middle East, Africa and beyond. Currently these goods have to travel a long distance of around 10,000 km from the South China Sea through the Strait of Malacca |1| to reach the Gulf. A special force of 15000 Pakistani troops would protect CPEC route.

The proponents of CPEC call it a game-changer for Pakistan and this region, but people and several economists here remain skeptical about the opaqueness of projects under CPEC and particularly of the terms and conditions of loans Pakistan is acquiring from China under this grand project. |2| For govt. CPEC is Viagra to Pakistan economy, for experts it is another form of “ East India Company”. It needs a broader analysis to have a clear picture.

An objective overview suggests CPEC is not a gift from Beijing to Pakistan, rather a complicated set of infrastructure investments that will be paid for mostly by Pakistani investors, consumers, and taxpayers in the form of commercial loans from Chinese banks paid back by Pakistani power generation companies and the government, and electricity tariffs paid by ordinary Pakistani consumers.

The total CPEC cost is around $46 billion: $35bn is allocated for energy projects while $11bn is for infrastructure development; such as Gwadar port development, industrial zones and mass transit schemes etc. On top that an additional amount of $8.5 billion of investment from Beijing as part of the countries’ joint energy, transport and infrastructure plan has also been finalized, making the total cost close to $55 billion. |3| Major portion of this money is supposed to come from Chinese private banks.

The energy sector worth an investment of $ 35 billion is important area to look into and independent power producers (IPPs) the real layers are bringing coal from China despite Pakistan having huge resources of its own coal. Which means China using these projects to dump its coal in Pakistan. |4| These IPPs have also bound the government of Pakistan to buy electricity from their power houses for at least 30 years whether it needs it or not, at lot more expensive rates than the international rates or than the electricity already being produced in the country.

Some economists are of the view that availability of the energy does not mean a sudden booster to local economy and compulsory buying of electricity from IPPS would generate another vicious circle of circular Debt. |5| Infrastructure development with low level of economic activity and at the cost of accumulation of loans is a not a good deal. Pakistan is already repaying loans at an average of $5 billion per anum and further loans means a disaster for its economy. Pakistan lacks capacity to repay CPEC loans and the next global economic crisis may knock Pakistan back into a recession.

Thanks to low oil prices coupled with borrowed foreign exchange, Pakistan economy shows comparatively better indicators although momentarily. The real crisis, will hit when all of the loans Pakistani energy companies have borrowed from China, come due. The power plant payments, tariff payments, capacity payments and loan repayments would exert a lot of pressure and Pakistan economy or exports are not in a good health to bear it.

But the government of Pakistan is in no mood to consider this side of the argument and trying to convince the people not to worry about repayment obligations because it is not public debt, rather private loan being acquired by the private companies from Chinese banks.

On the other hand for China CPEC provides an alternate secure route to import energy and find new markets for its goods and services. Almost 80% of the China’s oil is currently transported from Strait of Malacca to Shanghai, (distance is almost 16,000 km and takes 2-3 months), with Gwadar port becoming operational, the distance would reduce to less than 5,000 km. This would be a great strategic benefit for China. However, for Pakistan it would definitely help counter Indian influence in the region, position itself as a major transit point connecting Eurasian region with South Asia and South East Asia.

The objective analysis suggests that the only growing demand in Pakistan at present is for language translators, while Chinese language course centers have also emerging in the big cities. Meanwhile the government has also announced to make Chinese language as part of the curriculum in government schools. However, mere Chinese language is not enough to integrate and secure the dividends, unless technological capacity of the local universities, related to quality researches, is not built.

New East India Company?

Although Chinese companies are investing a lot more as compared to the British East India Company, their character is entirely different. They are bringing in entire equipment and technology, supervisory, and skilled labor manpower from China. That means that the multiplier effect of infrastructure spending will go to Chinese companies instead of local Pakistani people.

As Exim Bank of China and China Development Bank are already lending huge sums for CPEC projects to Pakistan, a Shanghai based consortium has just bought a 40% share in the Pakistan Stock Exchange (PSX) for $85 million and will soon take charge of its management. |6| The size of market capitalization of the PSX currently is around $100 billion. |7| With this growing Chinese financial influence on Pakistani rulers, the authority of the IMF and World Bank is likely to be reduced in coming years and the Chinese ruling class has good chances to emerge as a kind of new imperialist power in this region.

So far CPEC seems a big illusion; instead of reducing poverty it would probably increase the exploitation and unemployment. If huge infrastructural projects could have reduced poverty and misery there should be no poor in China and India. Chinese trucks would roll on the road from Kashgar to Gawader, while Pakistan has to take care of maintenance and security of the road from its own pocket. This is not a good proposition.

The plan of new industries to be built along the CPEC route seems a dream as people are still waiting for the industrial zones promised to be built along the Motorway many years ago. It is claimed that CPEC project will create some 700,000 direct jobs by 2030. However, instead of creating new jobs, it is feared that CPEC may lead to the closure of local industry in Pakistan, which will not be able to compete with their Chinese rivals.

CPEC and Pakistan Debt

As part of CPEC, the govt. of Pakistan is securing loans worth approximately $11 billion from Exim Bank of China and the China Development Bank for infrastructure projects. Moreover, on top of that the government has secured an additional $8.5 billion of investment from Beijing as part of the countries’ joint energy, transport and infrastructure plan. Thus increasing the current foreign debt from about $ 73 billion to around $ 92.5 billion.

The IMF has also warned that CPEC could add to Pakistan’s medium- and long-term risks, predicting that the country’s gross external financing needs would rise to $15.1 billion in 2018-2019 from $11.4 billion in the current financial year. |8|

However, the current govt. position is that “as the economy grows, our capacity to undertake the responsibilities of repayments also improves”. Its policy is to go for higher spending through reckless borrowing. By avoiding bitter decision of reforms it is busy making the electorate happy. During last three and a half years current government has accumulated an unprecedented amount of both external as well as domestic debt, contracting $34.6 billion of new foreign loans since 2013, according to State Bank data.

The cumulative public debt stock has increased from around Rs.14, 600 billion on June 30, 2013, to Rs20.272 billion as of end-December 2016, an increase of 40 per cent or nearly Rs.5, 700 billion. According to renowned economic expert, Dr. Ashfaq Ahmad, Pakistan’s financial requirements are getting higher by every year.

In the current budget 2016-17, Pakistan’s financial requirements amount to $15 billion; including $7billion current account deficit and $ 9 billion for debt serving, next year 2017-18, this amount would be $ 18 billion and by 2019-20, Pakistan would be requiring $22.5 billion; $10 billion for debt serving and 12.5 billion for current account deficit. The total external debt is expected to rise from current $ 73 billion to $110 billion by 2019-20.

This is a horrific picture by all means. Pakistan may be facing a Greece like situation. CPEC may not help Pakistan to meet its financial requirements in near future. The current economic infrastructure of Pakistan has not that much capacity to take maximum benefits from CPEC. It will take time. Therefore, strong chances are there Pakistan will have to go back to IMF next year.

But the govt. obsession with CPEC is so strong; that it is like ‘national anthem’ for them and all the politics ruling elite revolves around it. The real issues of unemployment, poverty, inequality, education and healthcare have been put on the back burner. Speaking against CPEC is almost taboo now.


|1| The Strait of Malacca or Straits of Malacca is a narrow, 850 km stretch of water between the Malay Peninsula and the Indonesian island of Sumatra




|5| The circular debt or “unpaid bills” of the country`s power sector, is already back with a vengeance to haunt the government less than four years after it had paid off previously accumulated bills of Rs.480bn of private and public power producers. The current unpaid power sector bills had piled up to Rs.414bn in spite of a substantial decline of around 50pc in global oil prices over the last three years





CPEC— game-changer for world trade

March 23, 2017



M. Ziauddin

When completed the China Pakistan EconomicCorridor (CPEC) is anticipated not only to be a game changer for Pakistan and China but also for world trade. However, the US is still looking at the CPEC as an early sign of the beginning of the end of its global hegemony on the economic front. Japan is worried that with the completion of CPEC any competitive edge that it currently has in world markets over China would simply disappear as while the physical distance between China and its markets would shorten by as much as 9,000km, its cost of producing exportable surpluses would as a consequence come down steeply.
India, on the other hand, is worried about the safety and security of its oil supplies that pass through the Strait of Hormuz at the mouth of which is located Gwadar, the entre-port of CPEC and where New Delhi fears in due course of time China will set up a Naval Base. India seems also concerned about the future of Chahbhar sea port that it is helping build in Iran along the Strait of Hormuz about 72 km from Gwadar for which it is contributing as much as $20 billion. It had perhaps wanted to deny Pakistan the Afghan and Central Asian markets through Chahbhar.
While the US and Japan still seem to be engaged in getting China to bog down in the South China imbroglio, India appears to have already finalized a stratagem to counter the self-perceived threats to its sovereignty and integrity emanating from CPEC. Indian Prime Minister Narendra Modi set the ball rolling from Lal Qila on August 15, 2016 by openly declaring his country’s intentions to foment trouble in Balochistan believing perhaps that once an insurgency in the province heats up uncertainty that would engulf the region as a result would make it impossible for the CPEC project to take off. It is also objecting to the Corridor passing through Gilgit Baltistan which in its opinion is a disputed territory and claims that the region cannot be used for any purpose without prior permission from New Delhi. India fears that China would set up its military base in GB in collaboration with Pakistan making it doubly dangerous for India’s occupation of Held Kashmir.
India also fears that once CPEC takes a final shape it would render the Chahbhar sea port redundant, its supplies of oil from Iraq, Iran and Saudi Arabia would become totally dependent on the good will of Pakistan and China and its plans to capture the Central Asian market would be nipped in the bud as China would be able to access in the shortest possible time the CA states through CPEC while India would be left with its round-about route going through Afghanistan which is still in the grip of a wasteful civil war.
However, some politically influential quarters in India believe that with the completion of CPEC Pakistan would be focusing its attention more on the economy which they think would create conditions conducive for those currently indulging in militancy to adjust in gainful employment which in turn would vastly lessen the threat of cross-border terrorism. These quarters also believe that India too could take advantage of CPEC by linking itself with the project which in turn would neutralize the threat it believes it would face with the Chinese Navy stationed in Gwadar and its Army massing troops in GB. Perhaps Pakistan could take the initiative in this regard by offering Afghanistan and India transit trade route through Pakistan which the two countries have been longing for decades. This move would perhaps neutralize India’s plans to foment trouble in Balochistan and its objections to GB becoming a part of the CPEC.
Meanwhile, it would be advisable to keep our respective domestic objections and complaints that we have all succeeded in discovering in the fine print of the project documents from turning into unnecessary and wasteful controversies. There are immense benefits for the entire country in the CPEC. Some regions would benefit immediately and some would benefit with a lag of couple of years but in the final analysis the entire country would be the gainer.
Gwadar port, the South most point of CPEC has total traffic of 0.5 million tonnes of Cargo today. But by 2017 it is expected to handle 1.0 million tonnes of Cargo. When completed and fully functional, it will handle 300-400 million tonnes of cargo per annum as against India’s total port capacity to handle 500 million tonnes of cargo. The Long Beach Port of the United States is the largest port of the US. It handles 80 million tonnes of cargo each year which is just 20% of Gwadar’s future capacity.
CPEC consists of “one belt, three passages, two axes and five functional zones” in terms of its spatial layout. “One Belt” refers to the belt which consists of zone area of the CPEC and the economic cluster area of industries, population and cities. It runs from Kashgar to Karachi and Gwadar on the Arabian Sea. “Three Passages” refers to the eastern, central and western routes. Eastern Route consists of railway-highway network from Islamabad to Karachi via Lahore, Faisalabad, Multan, Sukkur and Hyderabad and is considered as the main traffic artery of the corridor. Central Route starts from Islamabad to Karachi via Daria Khan, Jacobabad and Khuzdar through N25 or to Gwadar through M8. Western Route starts from Islamabad to Gwadar via D.I.Khan, Quetta, Basima and Hoshab. “Two Axes” refers to two east-west development axes in the corridor: Lahore – Islamabad – Peshawar” and “Karachi-Gwadar” development axes.
Once implemented CPEC has the potential of transforming Pakistan’s economy from a low growth mode (3-4%) to a higher and sustainable growth economy with low inflation, removing key infrastructural bottlenecks (energy, roads, highways, railways etc.), promoting balanced regional growth and development, shaping new industry clusters, improving living standards and social stability, and promoting regional connectivity.
The Corridor is expected to fuel economic growth of Pakistan by adding 2.0 percentage point to its growth between 2016 and 2020; another 1.5 percentage point between 2020 and 2030. It is likely to create 800,000 to 1.0 million new jobs. The length of newly built or upgraded roads and railways should reach 3871 km and 1529km, respectively. Power generated by newly built sources will reach 19.785 million KW, and length of optical fiber Cable will reach 2084km.
Under CPEC, various Pakistani industries will benefit.The garment and textile industry will be developed in Kashgar Economic Development Zone through importing raw materials from Pakistan. Textile and Garment Centers or EPZ will be built in Lahore and Karachi. To enrich cotton textile varieties, investment should focus in producing top grade cotton yarn, printing and dyeing fabrics, Jean fabric and Knitted fabric. Household Appliances Industry appears to have a bright future. Living conditions of Pakistani people will be improving gradually.
Some Chinese enterprises have already established plants in Pakistan. A household appliance industrial park will be established near Lahore through joint ventures. They will move from assembling imported parts to producing them locally. The demand for cement will continue to rise because of the rising construction activity. More investment can be made in cement industry to meet the growing demand for the CPEC – related construction projects. Mineral Exploration is another area where Chinese enterprises will have interest. Industrial Park Construction along the corridor should be considered by Pakistani-Chinese investors.
For food security, agricultural modernization should be promoted along the corridor. Key target is to increase per acre yield of rice, wheat, cotton and sugarcane and the output of livestock and dairy sectors including fish and shrimp. Organic and chemical fertilizer production should be developed around Lahore and Karachi. A modern agricultural demonstration zone should be built in the Quetta and Gwadar regions to lead local agricultural development. To increase farm employment along the corridor, efforts will be made to focus on developing agricultural product processing. By introducing modern agricultural product processing equipment and facilities, an agricultural industry cluster could be built around Islamabad, Lahore and Karachi. To reduce losses of fresh agricultural produce and increase local farm income, agricultural produce warehousing and logistics facilities be built in Peshawar, Islamabad, Lahore and Gwadar.
Gwadar Port infrastructure will be improved for fishery production. Epidemic disease prevention and control related to agricultural produce should be developed in Faisalabad and Lahore. Coastal tourism development has enormous potential under CPEC. Coastal tour line is Keti Bundar-Karachi-Somiani-Ormara-Gwadar-Jiwani. Landmark hotels, golf courses, high-end nursing homes, race courses and a hot air balloon facility along coastal city tourism zone are mostly likely to be built.
Financial cooperation will play an important role in economic corridor construction and operation. Multi-level cooperation includes Central bank cooperation for establishing bilateral payment and settlement to ease pressure on foreign exchange reserves. Business Organization Cooperation will take place where Chinese financial institutions can lead the syndicated loans of international financial institutions. And Cooperation in Financial Markets are likely where the two countries can open their bond market

CPEC super critical power plant highlights China’s green development goals

By Xiao Xin Source:Global Times Published: 2017/3/23 0:18:39

Pakistan's power woes are set to be considerably eased, thanks to China's efforts in building a large coal-fired plant in the country that is stricken with chronic power shortfalls. 

More worth noting is that the power complex - the first energy project under the China-Pakistan Economic Corridor (CPEC), an essential component of the grand One Belt and One Road initiative - is based on state-of-the-art super critical technology, the latest example of China's increased attention on green development both domestically and in overseas markets. 

It will be a huge wakeup call for those who tend to find fault with China's overseas projects and harbor suspicions as to whether China actually intends to relocate its polluting sunset industries to countries and regions along the Belt and Road route. Those making such remarks should reassess before rushing to any groundless conclusions. 

On Tuesday, officials from both countries broke ground on the 1,320 megawatt power plant - a joint venture between China Power International Holding Ltd and Hub Power Company - in Hub in southwest Balochistan province. The $2 billion project will provide coal-fired electricity to 4 million local families following its completion in August 2019, China Radio International (CRI) reported.

The venture will enable affordable and reliable electricity, an extremely welcomed prospect for Pakistan where expensive power generation has the country mired in an energy crisis. 

And in order to not beset the local population with pollution emissions often associated with coal-fired power plants, the venture in Hub will be equipped with boiler units running on super critical technology which improves coal efficiency, reduces emissions and lowers fuel costs. In addition, it will be outfitted with "an electrostatic precipitator to meet the highest requirements for emission controls in Pakistan," according to the CRI report. "Low-nitrogen combustion technology will also be adopted to lower emissions of nitrogen oxides," the report revealed. Emission controls will account for 10 percent of the project's total spending.

The super critical coal-fired power plant highlights China's commitment to prosperity through green development that is economically beneficial and environmentally justifiable not just along the economic corridor connecting China and Pakistan but also along the Belt and Road route. 

Actions speak louder than words and this energy project will help clear suspicions over the real intentions behind China's strategic push. Especially India, which tends to believe CPEC would undermine its influence in the Indian Ocean, should stop being nervous and think of how it might be a beneficiary of China's green technology.

The author is a reporter with the Global Times.