The Covid-19 is testing the world at many fronts- be it the medical front or the political and economic fronts as the world and its people adjust to new realities. International relations are also undergoing rapid changes as China tries to utlise the windows of opportunities created by the pandemic that originated initially in Wuhan. This can be seen in the form of China’s sales and donations of medical equipment to the world as well as its attempts to change the dominant narratives on the Covid-19. China’s relations with its friends is also undergoing rapid changes as the virus wreaks economic, political, and medical havocs in countries such as North Korea and Pakistan.
The Covid-19 Pandemic may actually put China and Pakistan’s “sweeter than honey” and “higher than the Himalayas” relations in dire straits. Pakistan has already been tottering on the verge of economic collapse. The possibility of it emerging as South Asia’s worst-hit by Covid-19 is likely to increase given its dependency on its all-weather friend-China. Unlike in the past, this time China’s generosity and Iron brotherhood will have to pass the test of Covid- 19 which creates a multitude of economic, social and security challenges for Pakistan. Additionally, the impact of the Covid 19 on the China-Pakistan Economic Corridor (CPEC) will also have implications for future Sino-Pakistan relations.
The impending debt trap and the threat to Pakistan post Covid-19
Pakistan has already recorded 2708 positive cases of Covid-19 as of April 4, 2020. In addition to the health hazards, as per news reports from Pakistan, the economic hazards are also daunting as the economy may have to bear a massive loss of 4.64 percent in the gross domestic product (GDP) because of disruptions in imports and exports after the outbreak of Covid-19. The Asian Development Bank estimates a loss of $5 billion in the worst-case scenario of Covid-19 outburst. About 60 per cent of Pakistan’s exports is textiles. The majority of the raw material in the form of dyes and chemicals needed to produce textiles is imported from China. The industry also contributes immensely to forex reserves of an otherwise dollar strapped economy that has lately found itself quite too often left with just enough reserves to pay for 1.5-2 months of imports. Shortage of labour because of the quarantine is likely to reduce operations at ports as well, which will lead to a build up of cargo at ports. Demand shortage of textiles from countries grappling with the virus spread will further cripple the Pakistani economy. The economic turmoil caused by the Covid-19 pandemic will therefore cause an immense dent to Pakistan’s economy.
The pandemic in all likelihood will also impact the economic viability of the China-Pakistan Economic Corridor (CPEC). Beijing and Islamabad have often touted the CPEC as a stabilizing force for the Pakistani economy as it gives unprecedented access to ports in the oil and the energy-rich West Asia and will improve an aging road and rail infrastructure. Ground level analysis often reveals the opposite. According to a report, documents of the ministry of planning and development have revealed that Pakistan will pay China $40 billion for the $26.5 billion CPEC investments in 20 years. The amount does not include the $8.2 billion Mainline-I project of Pakistan Railways — the only project that can materialise in the next few years, according to the report. In 2018, when the International Monetary Fund (IMF) met with Pakistan, $9 billion discrepancy surfaced between the figures quoted by Islamabad and Beijing on account of cost of ongoing and completed projects. A Pakistani official stated the total cost of 22 ongoing and completed power projects (under CPEC) was $28.6 billion dollars, while Chinese Ambassador Yao Jing had stated the figure to be $19 billion. In addition to this, according to the Agreement on CPEC Energy Projects Cooperation, Pakistan is legally bound to provide foreign currency in the form of dollars for debt repayment to Chinese financial institutions by investors- which are Chinese companies for the recovery of profits by them. Thus, Pakistan will end up pouring substantial economic resources into the Chinese economy! Additionally, even though the CPEC has increased infrastructure jobs for Pakistani workers, the top-level jobs have largely been taken by the Chinese officials. A pandemic in the form of the Covid-19 will only further Pakistan’s economic exploitation.
Immediately post the outbreak of Covid-19, work ceased along the CPEC. A freeze in the flow of Chinese labour to the CPEC became the immediate reason for the disruption in work along the CPEC as thousands of Chinese workers are unable to return to their place of work in Pakistan. The Chinese government has lobbied with certain Belt and Road (BRI) countries like Soloman Islands and Pakistan to ease travel restrictions. The longer that Chinese workers are unable to return to BRI projects, the longer the projects will languish incomplete. While the loan will have to be repaid for the project, work will simply not be complete because of the turmoil brought forth by the Covid-19, as a result of which labour movement has been halted in almost all countries of the world. Had the CPEC been based on locally sourced Pakistani labourers, suppliers and manufacturers, this shock could have been mitigated differently! Even though the first batch of Chinese workers arrived in Pakistan on March 20 this year, they have been quarantined for 14 days. Public response to the presence of Chinese labourers is yet to be seen. What is to be remembered is that there have been several attacks on Chinese labourers in Pakistan in the past. Given the negative public perception China has in most countries owing to the outbreak of the virus first in Wuhan, it remains to be seen what unfolds with the return of Chinese labourers to CPEC projects.
Security Challenges in Xinjang and Balochistan
The CPEC connects Kashgar in the troubled western Chinese province of Xinjiang through the Khunjerab pass to Gwadar in the troubled western Pakistan province of Balochistan. The development of Gwadar which is the backbone of CPEC is largely threatened by the groups operating in Balochistan, as they repeatedly accuse Pakistani and Chinese authorities of exploiting the natural resources of Balochistan.
Violent extremist groups like Lakshar-e-Jhangvi and the Afghan Taliban have a long history of launching attacks against outsiders. The Covid-19’s impact on China’s public image could be wrongly utilized by terrorist groups to attack Chinese workers and companies which are already labeled as exploiters and infiltrators by these groups. In the post-Covid-19 world, Pakistani extremists may also target China to avenge China’s treatment of the Uighur Muslims in Xinjiang. Till now the Pakistani insurgent groups have not actively supported the Uyghur cause against China. However, after the Covid-19 outbreak, the Islamic State (IS) has spoken of God’s divine retribution to China while at the same time expressed antipathetic sentiments for China. Hence, security challenges to CPEC may get worse after the Covid-19 blow.
Additional Threats emanating from the ‘Friendship’
Covid-19 Pandemic has exposed the weakest aspect of Sino-Pakistan relations by exposing the people to the pandemic. The health crisis created by the Covid-19 Pandemic in Wuhan affected citizens from both Pakistan and China. The Foreign Office (FO) even announced that 500 students from Pakistan were stuck in Wuhan. In a health emergency, most countries including the U.S. and India evacuated their students. However, the Pakistani government staked the lives of helpless Pakistani citizens stuck in Wuhan by refusing to evacuate them to show solidarity with China!
This move of the Pakistan government has been heavily criticised as Pakistani students took to social media to voice their plight. This has led to several questions on the groundless decision of the Pakistani government, and whether lives of citizens are of any concern to the government. This response is bound to eventually create some impact in China’s domestic polity.
In addition to the economic costs that Pakistan will have to pay due to the impacts of the Covid-19, Pakistan has been proved time and again to be the inferior in the friendship with China. The latest instance pertains to China’s promises of medical supplies to Pakistan to deal with the Covid-19. China stated that it will donate 3,00,000 face masks, 10,000 protective suits and $4 million to Islamabad to fight the virus. However, when the consignment from China landed on April 3, it was found that China had sent masks made out of underwear. To make matters worse, the Sindh provincial government had sent the masks to hospitals without verification. This is only going to adversely impact public perception of China further, not just within Pakistan but also internationally.
For a China which is actively trying to shape narratives around the Covid-19 and is even utlising the opportunities created by the Covid-19, in attempting to assuage the world through its medical equipment sales and donations, a poor treatment of a country that it calls its all weather friend only leads to a questioning of the kind of world order that will emerge if China were to be the hegemon. Pakistan is only an example of the kind of relationships China wants with countries of the world- economically and politically subjugated to China! The Covid-19 is only furthering such imperatives!
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of The Geopolitics.
Dr. Pathak is an Assistant Professor and Assistant Academic Dean at the Jindal School of International Affairs, O.P. Jindal Global University, Sonipat, Haryana, India. She can be reached at [email protected].
Ms. Saraswat is pursuing her Bachelors in Global Affairs (Hons.) at the Jindal School of International Affairs, O.P. Jindal Global University, Sonipat, Haryana, India. She can be reached at [email protected].