Dr Shabir Choudhry, an avid contributor to the discourse on South Asia, is not only a writer but also a Kashmiri rights and peace activist, an academician, as well as a politician. Born in Pakistan-occupied Jammu & Kashmir (POJK), and now a British national, Choudhry primarily focuses on the contentious issues of oppression, religious intolerance, extremism, and terrorism in the areas of POK and Jammu and Kashmir.
Utilising his academic knowledge, as well as his personal experiences, Choudhry vociferously speaks up against the forces of injustice in the region by issuing statements, delivering speeches, and even publishing articles and books. Firm in his beliefs and ideologies, Choudhry has time and again proven to be an objective critic to the situation surrounding the region, as is proven from his resignation from the Kashmir Youth Movement in 1973, the Jammu and Kashmir Liberation Front in 1976, and even the Kashmir National Party in 2008, on account of a disagreement over the direction they were headed in. Especially notable is the fact that Choudhry had himself played an extremely crucial role in the formation of each of these groups.
Due to the forthright nature of his commentary, he has faced a substantial backlash from several Pakistani nationals and scholars, as well as citizens of Jammu and Kashmir who are more loyal to Pakistan. From being called an “Anti-Pakistani”, to facing accusations of being a traitor and an agent of the enemies, Choudhry has encountered every possible form of denunciation. However, this has not prevented him from raising his voice against issues which he feels very strongly about. This nature of his consistency in his book, Economic Growth or a Debt Trap for Pakistan: CPEC can be a Mega Disaster for Pakistan.
The book, Economic Growth or a Debt Trap for Pakistan: CPEC can be a Mega Disaster for Pakistan, inspects the socio-political and economic implications of the China-Pakistan Economic Corridor on Pakistan, while also discussing the reverberating effects on regional and international players. Replete with data and facts from other developing countries who have suffered due to China’s investment as part of the Belt and Road Initiative, the book explores how Pakistan is journeying down a path which leads to the same fate. Choudhry’s central argument is focused on how China is pursuing its self-serving agenda of challenging the world economic order, and hence, America, by employing and almost manipulating developing countries of strategic importance. The aim is to gradually create a “string of pearls” (Choudhry 52) which provides a crucial and damaging influence on China. For said pursuit, Choudhry claims that China has embraced the strategy of “debt-trap diplomacy” (9) wherein these strategically important yet economically lacking countries are incrementally made reliant on China, militarily and financially, enabling it to influence not only their economies but also their policies.
Amidst the platitudinous commentary on the discourse, Choudhry’s approach comes as a breath of fresh air, providing a unique perspective to the dialogue on CPEC. His radical take on the topic suggests that the economic relationship between Pakistan and China is not a partnership, but rather a form of neo-colonialism. Quoting John Adams, the second president of the United States of America, Choudhry explains how China’s strategy is centred around avoiding the use of “gunboat diplomacy” (8) and instead rests on employing economic muscle to extend its sphere of influence. Terming it ‘debt-trap diplomacy’, Choudhry details how China strategically grounds itself as an influential behemoth in developing countries under the guise of strengthening their infrastructure and economy. The idea is to make funds easily available to such countries so as to attract them into issuing several incremental loans from China, with certain conditions concerning the possible situation of failure of repayment. China’s aim, according to Choudhry, is to soften the ground in such countries through the extension of economic aid and a gradual, but skewed, cultural exchange in order to make them more receptive to Chinese domination and control in the future.
In addition to this are the active efforts on the part of China to render the recipient country unable to repay their debts. Apparently, the Chinese employed in construction in the recipient country deliberately slow down two-thirds of the way through completion. Given that the stipulated time for loan repayment commences approximately 3-4 years after the beginning of the project, the process for repayment sets off before the project is even finished. Therefore, debt starts accumulating before the expected revenue from the operation of the finished project is even accrued. At this juncture, further funds are offered by China to the recipient country for even more projects. Apparently, in fear of the already incomplete projects being abandoned or de-funded by China, the recipient countries accept further projects, creating a vicious circle. Pushed further and further into debt, the recipient countries are rendered systematically crippled by Chinese investments.
Choudhry brilliantly captures the essence of the aforementioned phenomenon by providing ample evidence in the form of case studies. One of these is of Sri Lanka. The account of Sri Lanka’s partnership with China leaves the priorly unaware reader baffled by their plight. Tracing a vague chronology of events which transpired in Sri Lanka, Choudhry highlights how Sri Lanka’s attempts at improving the state of its economy resulted in a devastating debt, with the loans swelling up to $8 billion at an interest rate of 6%. Sri Lanka’s sincere efforts backfired. It ended up having to lease the Hambantota Port, one of the many Chinese funded projects, to China Merchant Port Holdings Company in December 2017, for $1.2 billion for the next 99 years! Similar was the case with Djibouti, yet another developing, and economically weak country. China loaned Djibouti $1.4 billion for infrastructural development. Following this, the country’s external debt increased by 35% in just two years, leaving its debts to be the highest among low-income countries.
Choudhry’s aim in bringing under the microscope the case studies of Sri Lanka and Djibouti is to utilise them as a president for, as well as somewhat of a reflection of what is currently transpiring in, Pakistan. Detailing the accounts of both countries, he cautions Pakistan of the dangers of the path it is walking, for it is setting itself up for meeting the same fate. The fate of, as he calls it, compromising its sovereignty. It is of excruciating importance to note that both Sri Lanka and Djibouti are essential to China’s strategic, defence, and commercial designs given their locations. Interestingly, same is in the case of Pakistan, hinting at the fact that perhaps China’s interest in CPEC is more than just an economic one.
While the motives behind CPEC are widely stated to be aimed at aiding in the economic upliftment and development of Pakistan, many analysts, including Choudhry, have pointed out that there is more than what meets the eye. One of the major advantages of CPEC for China is that it will allow it to gain control over the Gwadar port. This will enable China to create an opening from the Arabian Sea, allowing a free-flow of goods between China and the Middle East and Europe, without having to pass through Indian waters. This would be a crucial asset for China, for any future political or military strife with India will not be able to hinder its trade movement since the Gwadar port will serve as an alternative route. Furthermore, China will also, then, be able to gradually extend its sphere of influence, political or otherwise, to not only the Arabian Sea but also the Indian Ocean. Access to the Gwadar port also provides China with the golden opportunity of eventually setting up military and naval bases in the area. It is quite evident that China’s interest in Pakistan and the CPEC runs deeper than just to boost Pakistan’s economy.
Choudhry’s commentary time and again calls upon the need for Pakistan to “live in the real world” and embrace self-reliance (19). Complementing his claims with a comprehensive economic analysis of Pakistan’s contemporary financial situation, Choudhry elucidates the complex web of reliance Pakistan has woven itself into. Even a novice in the discourse on Pakistan and/or CPEC is able to comprehend the complexities and interconnectedness of the various factors which shape the socio-political and economic condition of Pakistan as it stands today. Many analysts have claimed that Pakistan has often resorted to becoming a client state of other countries such as the USA, Saudi Arabia, and the UAE. Choudhry quotes Monika Chansoria’s definition which says that a client state is “economically, politically and militarily subordinate to and dependent on another more powerful and influential state in international affairs” (97). Choudhry claims that by the very notion of this definition, Pakistan has not only rendered itself a client state in the past but is also doing so with China.
The CPEC project has introduced extremely ambitious plans in Pakistan. Not only is the funding itself a huge factor in ensuring that China is able to maintain its influence in Pakistan, but such ambitious projects are pushing Pakistan further and further into debt. Pakistan is increasingly taking loans from China which is further ensuring its reliance on the economic giant. China is swiftly gaining ground in Pakistan in every aspect of the country, be it political, military, or economic. Pakistan is now facing tremendous debts, both pre-existing and those brought upon by the CPEC. Due to its perpetual client state nature, Pakistan does not inherently possess the resources or wherewithal to pay them back, and the high-interest rates are only putting more pressure on Pakistan’s economy. Pakistan’s sole option, then, is to seek out financial aid from allies. However, the prospects of that too now seem to be fading.
The United States of America has, in the past, provided financial and military aid to Pakistan on several accounts. Post 9/11, America paid Pakistan billions of dollars in the name of Coalition Support Funds (CSF), in cash. This was done to compensate for the services provided by Pakistan concerning Afghanistan such as access to Pakistani airfields, ports, and roads to enable the deployment of American forces, as well as a promise of securing opportunities for negotiations with the Taliban. By 2015, Pakistan had acquired $13 billion from CSF, which the army more or less utilised to serve its agenda, leaving something to be desired for Washington. Due to the unsatisfactory performance on the part of Pakistan, the USA soon decreased military aid by 73% and even went so far as to freeze the CSF. Before the US-Taliban peace treaty, signed on February 29, 2020, Pakistan, at the very least, had the leverage of providing access to Afghanistan and the Taliban, something of extreme importance to the USA, given their war against terror. However, Pakistan’s bargaining chip has since lost some influence, leaving America without enough interest to invest heavily in Pakistan. The USA, hence, isn’t much of an option for Pakistan to seek financial aid from, anymore.
Saudi Arabia and UAE have been some of the other allies which offer Pakistan financial and military aid. However, the sheer amount required by Pakistan to repay its debts is so gargantuan, that Saudi Arabia and UAE are in no position to furnish a significant enough loan. Moreover, even if the idea of borrowing part (approx. $3-4 billion) of the total required amount from Saudi Arabia is explored, the prospect does not come without a price. Saudi Arabia is currently at war with Yemen. Upon granting the said amount, Pakistan would be expected to side with the aggressor, Saudi Arabia , targeting a largely Shia population. Doing so can have serious repercussions given the strong Shia population of 20% in Pakistan itself, as well as considering that Iran, an ally, is a Shia country which is in support of Yemen. In addition to the aforementioned aspects is the fact that both Saudi Arabia and the UAE are starting to lean more towards the USA, which is not in much favour of Pakistan receiving funds since they could potentially be utilised in strengthening China’s agenda of dominating the world order. The prospects of borrowing from these allies too seem to be hanging in the balance.
One of the most accessible sources of financial aid for Pakistan is an International Monetary Fund bailout package. Pakistan has already received 14 bailout packages since 1980, despite which it has not been able to pay back all its debts, let alone stabilise the economy. An IMF bailout package anyways comes with very harsh and stringent conditions, strictly defining the uses of the rolled out loan, and even devising an economic plan. It calls for enhanced transparency, while also imposing several restrictions. Such conditions may prove to be counterproductive for CPEC, for the restrictions may bring a halt to numerous projects, while the others may not hold up to the transparency requirements as stipulated by the bailout package. China, hence, is not in much favour of the IMF bailout package, considering especially the fact that Pakistan is gradually emerging as China’s only assured medium of advancing on its agenda. The USA, too, is highly sceptical of the bailout package for it fears that the funds may be directed to settling the debts for the CPEC projects, and the USA wants to ensure that the bailout package can, in no way, strengthen the Chinese agenda of challenging the existing world order.
There is additionally the fact that Pakistan has recently been added to the grey list by the Financial Action Task Force, an international body aimed at combating terrorist financing and money laundering. Such extremely low ranking, just above the dreadful blacklist, has worsened Pakistan’s chances of acquiring loans and attracting funds from other countries and foreign investors. Pakistan is essentially left with one choice, to rely all the more on China.
It is becoming increasingly evident that as the situation stands now, Pakistan’s only source of financial aid is China. Choudhry points outs that the precarious situation that Pakistan is hence left in, plays a major role in hurtling it into the Chinese debt-trap. On the one hand, Pakistan needs to stabilise and then further optimise its economy, the funds for which are only being provided by China. On the other hand, almost all of China’s eggs are in the Pakistan basket since other developing countries are starting to question their involvement in the BRI, making CPEC all the more important, both economically and strategically. These factors combined are further ensuring Pakistan’s entanglement in a quagmire of debt, and perhaps even a subsequent downfall of its economy.
Choudhry’s book offers an in-depth exploration of the deep recesses of everything that is fundamentally wrong about CPEC. Subjecting the project to strict scrutiny, Choudhry delivers the reader a meticulous analysis, covering every possible aspect under the sun. His claims, while mighty, do not ring hollow for he provides for enough evidence to convince any reader diving into the book with an unbiased and objective perspective. While heavily saturated with information and facts, Choudhry does not let his reader lose interest by employing the tool of personal commentary and remarks, some so witty and brutally honest, that the reader cannot help but either chuckle in agreement or gasp in absolute disagreement.
The book is largely a compilation of Choudhry’s speeches and articles on the topic which provides for a well-rounded and holistic insight into his understanding of the discourse. However, this, unfortunately, ends up creating a lot of negative space wherein not only is information frequently repeated but so are direct quotes from earlier in the book. Despite the engaging writing style of the author, the book falls short in gripping the reader in the most absolute manner, owing to the unnecessary repetition, which could have easily been edited out.
Overall, the book reveals itself to be a very thorough analysis of the implications and motives of CPEC. Choudhry manages to discuss the controversial topic of CPEC and its socio-political and economic ramifications, unabashedly unafraid of criticism. Although his political leanings come forth through the text, Choudhry does not let them taint his analysis of the subject. Despite the few shortcomings in the structure and presentation, this book remains a comprehensive and airtight study of CPEC. Given its scope, the book will surely appeal to scholars of international relations and security studies, as well as those interested in the regions of South Asia and East Asia. It is a wonderful research source which can not only prove to be a boon for academicians, scholars and researchers but also policymakers and practitioners.