CPEC funds halted: More than what meets the eye

China's decision to temporarily halt the supply of funds with respect to the construction of three roads, part of the China-Pakistan Economic Corridor (CPEC) project, is more than what meets the eye, says a report by the Amsterdam-based think-tank and policy research institution, European Foundation for South Asian Studies (EFSAS).

The Chinese Government has cited its concern over corruption in the CPEC projects as the reason for the move, however, according to EFSAS "this argumentation is very weak, to say the least, as corruption is not a new phenomenon in Pakistani politics; No Pakistani Prime Minister has ever completed the five-year long Government term as all democratically elected Heads of Government in Pakistan have been dismissed due to charges of corruption in the country's 70-years existence."

"China's decision to stop its funding is a 'temporary' measure to reassert Chinese control over CPEC projects until it decides to release new guidelines," Isabela Favero, a research analyst at EFSAS wrote.

"In addition, Beijing is keen to give the Pakistani Army the lead role in the CPEC projects as Pakistani Ministries charged with carrying out the projects have incurred delays because of infighting," she added.

The involvement of the Pakistani Army would satiate some of the security concerns of China as the nearly $50-billion flagship project passes through the region of Gilgit Baltistan, which links China's restive Xinjiang region with Pakistan's insurgency-torn Balochistan province, where in October, a Chinese workers' shelter at the Pakistani port of Gwadar was attacked, the report further said.

On December 8, the Chinese Embassy in Pakistan warned CPEC's Chinese workers that they might be targetted, in a statement issued on its website

The funding of the three projects was expected to be finalised during the Joint Working Group (JWG) meeting held on November 20, but Pakistan was informed that the existing procedure for release of funds had been abolished and 'new guidelines' would be issued from Beijing under which new modus operandi for release of the funds would be described.

Nepal's cabinet scrapped a $2.5-billion deal with China's Gezhouba Group to build the Budhi Gangaki hydro-electric plant citing lapses in the award process.

The CPEC is intended to rapidly modernise Pakistan's infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and special economic zones.

CPEC, a part of 'One Belt One Road' (OBOR) initiative, was launched in 2013 is an imperative project as it would embolden China's strategic position by providing access to important regions — such as the Middle East, Africa and the Arabian Sea — through the Indian Ocean, along with the traditional road of the Strait of Malacca, the report concluded.