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Pakistan’s financial crisis puts Belt and Road on the spot

Dr. James M. Dorsey

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Increased Pakistani dependence on China to help it avert resorting to the International Monetary Fund (IMF) to avoid a financial and economic crisis spotlights fears that the terms of Chinese investment in massive Belt and Road-related projects would not pass international muster.

Concerns that China’s US$ 50 billion plus investment in Pakistani infrastructure and energy, the Belt and Road’s crown jewel dubbed the China Pakistan Economic Corridor (CPEC), potentially amounts to a debt trap, compound suggestions that Pakistan increasingly will have no choice but to toe Beijing’s line.

The concerns are reinforced by the vision spelled out in a draft plan for CPEC. The plan envisioned a dominant Chinese role In Pakistan’s economy as well as the creation of a Chinese style surveillance state and significant Chinese influence in Pakistani influence.

Pakistani officials, concerned that Chinese loans offer a band-aid rather than a structural solution, have cautioned China, in a bid to keep the People’s Republic committed to bailing them out, that CPEC projects would be at risk if their country was forced to seek help from the IMF.

The officials said that they would have to disclose the terms of CPEC projects if they are forced to revert to the IMF and that this could lead to projects being cancelled.

“Once the IMF looks at CPEC, they are certain to ask if Pakistan can afford such a large expenditure given our present economic outlook,” the Financial Times quoted a Pakistani official as saying.

China has so far been willing to bail Pakistan out with Chinese state-owned bank giving the South Asian country some $5 billion in loans in the last 12 months in addition to a US$1.5 billion trade facility.

Pakistan’s foreign currency reserves plunged to US$9.66 billion last month from US$16.4 billion in May 2017.

Pakistani efforts to avert a crisis could not come at a more sensitive moment with elections scheduled for July 25. Political tension in the country were heightened this week by the sentencing to prison on corruption charges of ousted prime minister Nawaz Sharif and his daughter, Maryam, as well as the likely participation of a large number of Islamic militants in the polls.

To make things worse, China last month did not try to shield Pakistan from being grey-listed by the Financial Action Task Force (FATF), an international anti-money laundering and terrorism watchdog. that threatens to impair the country’s access to international financial markets.

Pakistan is struggling to avoid being blacklisted by the group.

Pakistani concern about disclosing terms of CPEC projects, even if it may involve a degree of opportunistic hyperbole, reinforces widespread worries in the country itself as well as in the international community that Chinese-funded Belt and Road projects put recipients at risk of walking into a debt trap and losing control of some of their key assets.

Malaysia this week suspended China-backed projects worth more than US$20 billion on the grounds that many made no financial sense. The projects included a railway and two pipelines.

China has written off an undisclosed amount of Tajik debt in exchange for ceding control of some 1,158 square kilometres of disputed territory close to the Central Asian nation’s border with the troubled north-western Chinese province of Xinjiang. Sri Lanka, despite public protests, was forced to give China a major stake in its port of Hambantota.

Pakistan and Nepal withdrew last November from two dam-building deals. The withdrawal coincided with mounting questions in Pakistan about what some saw as a neo-colonial effort to extract the country’s resources.

A report published in March by the Washington-based Center for Global Development warned that 23 of the 68 countries benefitting from Belt and Road investments were “significantly or highly vulnerable to debt distress.”

The centre said eight of the 23 countries – Pakistan, Tajikistan, Djibouti, Kyrgyzstan, Laos. the Maldives, Mongolia, and Montenegro, Pakistan, and Tajikistan – were particularly at risk.

Djibouti already owes 82 percent of its foreign debt to China while China is expected to account for 71% of Kyrgyz debt as Belt and Road-related projects are implemented.

“There is…concern that debt problems will create an unfavourable degree of dependency on China as a creditor. Increasing debt, and China’s role in managing bilateral debt problems, has already exacerbated internal and bilateral tensions in some BRI (Belt and Road initiative) countries,” the report said.

With analysts predicting that China will ultimately be unable to stabilize Pakistan financially, Pakistan is ultimately likely to have to revert to the IMF in a move that could seriously impact the Belt and Road initiative, widely perceived as an infrastructure driven effort to cement Chinese economic and geopolitical influence across a swath of land that stretches from South-eastern Europe and the Atlantic coast of Africa to the People’s Republic.

Analysts estimate that Pakistan this year needs US$ 25-28 billion to service its debt and ensure investor confidence in its ability to put its financial house in order. An IMF technical assistance team this week concluded a week-long visit to Pakistan.

Said one analyst: “Ultimately, the IMF is Pakistan’s only option. If an IMF-imposed regime has consequences for BRI (Belt and Road Initiative) projects, it could impact perceptions of the terms China imposes.”

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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South Asia

A double-edged sword: China and Pakistan link up with fibreoptic cable

Dr. James M. Dorsey

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This month’s inauguration of a fibreoptic cable linking Pakistan with China could prove to be a double-edged sword. Constructed by Chinese conglomerate Huawei Technologies Co., Ltd, the cable is likely to enhance both Pakistan’s information communication technology infrastructure as well as the influence of Chinese authoritarianism at a moment that basic freedoms in Pakistan are on the defensive.

The $44 million, 820-kilometre underground Pak-China Fibre Optic Cable links Rawalpindi with the Chinese border at Khunjerab Pass and is backed up by a 172-kilometre aerial cable. A second phase of the project is likely to connect to the port of Gwadar in Balochistan, a key node in China’s US$ 50 billion plus infrastructure-driven investment in the South Asian state, dubbed the China Pakistan Economic Corridor (CPEC).

The cable is expected to provide terrestrial links to Iran and Pakistan and serve as a conduit to the Middle East, Europe and Africa through hook ups with submarine cables.

The inauguration of the cable came days after China launched two satellites for Pakistan from the Jiuquan Space Center in Inner Mongolia, to provide remote sensing data for CPEC.

The satellites are expected to monitor natural resources, environmental protection, disaster management and emergency response, crop yield estimation, urban planning and provide CPEC-related remote sensing information.

The prominence of Pakistani military officers, including General Qamar Bajwa, Pakistan’s top military commander and Major General Amir Azeem Bajwa, the head of the Special Communications Organisation (SCO), at the inauguration underlined the cable’s strategic and potentially political importance.

Pakistan’s military sees the cable as a way of ensuring that the country’s in and outbound traffic does not traverse India. Major General Bajwa told lawmakers last year that the current “network which brings internet traffic into Pakistan through submarine cables has been developed by a consortium that has Indian companies either as partners or shareholders, which is a serious security concern.”

The key to the cable’s potential political significance lies buried in the Chinese-Pakistani vision that underlines CPEC against the backdrop of Chinese concern about the messiness of Pakistani politics and the People’s Republic’s support of what it sees as the behind-the-scenes stabilizing role of the country’s powerful military.

A leaked draft outline of the vision identified as risks to CPEC “Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” as well as security. “The security situation is the worst in recent years,” the outline said.

The vision appears to suggest addressing security primarily through stepped up surveillance  based on the model of a 21st century Orwellian surveillance state in parts, if not all of China, rather than policies targeting root causes and appears to question the vibrancy of a system in which competition between parties and interest groups is the name of the game.

The draft linked the fibreoptic cable to the terrestrial distribution of broadcast media that would cooperate with their Chinese counterparts in the “dissemination of Chinese culture.” The plan described the backbone as a “cultural transmission carrier” that would serve to “further enhance mutual understanding between the two peoples and the traditional friendship between the two countries.”

Pakistan’s Ministry for Planning, Development, and Reform said at the time that the draft “delineates the aspirations of both parties”

The cable’s facilitation of aspects of the Chinese surveillance state and soft power strategy occurs in a country in which feudal and patronage politics dominate the countryside and the military has sought to severely curb media coverage in the run-up to elections scheduled for July 25.

Democracy has become a terrifying business in the villages of Pakistan. Elections might change the federal and state governments, but the feudal and punitive power structures in the countryside don’t change. The feudal lords offer allegiance to the new ruler and continue to oppress the poor villagers,” said Ali Akbar Natiq, a scholar, poet and novelist who returns every two weeks to his home district of Okara in Punjab, in an article in The New York Times.

The media crackdown involves censorship of TV channels, newspapers and social media, including preventing the distribution of Dawn. An English-language newspaper, Dawn was established by Pakistan’s founder Mohammed Ali Jinnah before the 1947 partition of British India, as a way for Muslims to communicate with the colonial power.

Cable operators were advised to take Dawn’s TV channel off air, advertisers were warned to shy away from the paper while its journalists were harassed. Other journalists and media personalities have been kidnapped or detained by masked men believed to be linked to military intelligence.

Columnist and scholar S. Akbar Zaid said last month that he was advised by Dawn that the paper could no longer publish his column “because of censorship problems that they are facing with regard to the military and its agencies. They say that the threats are very serious,” Mr. Zaid said.

Daily Times journalist Marvi Sirmed reported that her home was burgled and ransacked last month. The intruders took her computers, smartphone, and her passport as well as those of members of her family but left valuables such as jewellery untouched.

Pakistan’s military has denied cracking down on the media although it conceded that it was monitoring social media.

Bloggers, including well-known journalist Gul Bukhari, are among those who have been detained and released in some cases only weeks later.

A guard in a detention centre where five bloggers were held last year for three weeks, alongside ultra-conservative militants, told his captives:, according to one of the detainees: “You are more dangerous than these terrorists. They kill 50 or 100 people in a single blast, you kill 600,000 people a day,” a reference to the 600,000 clicks on the bloggers’ Facebook page on peak days.

In an editorial published after months of harassment Dawn charged that “It appears that elements within or sections of the state do not believe they have a duty to uphold the Constitution and the freedoms it guarantees. Article 19 of the Constitution is explicit: ‘Every citizen shall have the right to freedom of speech and expression, and there shall be freedom of the press.’ The ‘reasonable restrictions’ that Article 19 permits are well understood by a free and responsible media and have been consistently interpreted by the superior judiciary.”

The paper went on to say that Dawn “considers itself accountable to its readers and fully submits itself to the law and Constitution. It welcomes dialogue with all state institutions. But it cannot be expected to abandon its commitment to practising free and fair journalism. Nor can Dawn accept its staff being exposed to threats of physical harm.”

At the bottom line, Pakistan’s new fibreoptic cable promises to significantly enhance the country’s connectivity. The risk is that visions of Chinese-Pakistani cooperation in the absence of proper democratic checks and balances threaten in Pakistan’s current political environment to undermine the conditions that would allow it to properly capitalize on what constitutes a strategic opportunity.

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India Ranked at Top as the Most Dangerous Country for Women

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Thomson Reuters Foundation in its recent survey released on June 26, 2018 ranked India as the most dangerous country in the world for women.

More than 500 global experts on women’s issues took part in a survey covering areas such as healthcare, discrimination, cultural traditions, sexual and non-sexual violence and human trafficking. Not enough was being done to tackle the dangers women faced, they said. India was ranked fourth in a similar study conducted in 2011.

Afghanistan and Syria were ranked second and third in the study, followed by Somalia and Saudi Arabia. The only western nation in the top ten was the USA. The foundation said that this was directly related to the #MeToo movement

According to government data gathered in the study, crimes against women in India rose by more than 80 per cent between 2007 and 2016. Nearly 40,000 rapes were reported in 2016, despite a greater focus on women’s safety after the fatal gang rape of a student in Delhi in 2012 that prompted nationwide protests and led to tougher laws against sexual abuse being introduced.

India recorded 539 cases of sexual harassment in the workplace in 2016, 170 per cent from 2006, a report from last year suggested. However, campaigners have said that those figures are only the tip of the iceberg; a 2017 survey by India’s National Bar Association found that nearly 70 per cent of victims did not report sexual harassment.

Manjunath Gangadhara, an official at the Karnataka state government, said: “India has shown utter disregard and disrespect for women. Rape, marital rapes, sexual assault and harassment, female infanticide has gone unabated. The fastest-growing ecnomy and leader in space and technology, is shamed for violence committed  against women.”

Some observers pointed out that the study, while it took in wider streams of figures, was primarily based on opinion.

Upasana  Mahanta, of Jindal Global University in Delhi, told The Times: “I’m not sure that India is any more dangerous now than it was six years ago. In terms of progress, having only legal provisions  will not make the difference. Most studies show that women in India are mostly victims of violence from their partners or family members. Which shows they are hurt because they are women, regardless of cultural, economic or social factors. Women are basically being put in their place through violence.”

In the past year several prominent rape and murder cases involving children have led to the introduction of the death penalty for those convicted and speedier trial process for violence against females.

The Ministry of Women and Child Development declined to comment on the survey results, said the Thomson Reuters Foundation, the news network’s philanthropic arm.

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Pakistan: A New Space Era

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Pakistan’s fragile economy and resource restraints are the main hurdles in the way of technological development, especially in space affairs. Therefore, it is so obvious that Pakistan governments’ priorities were off the beam in term of emphasis on space technology. Notwithstanding, Pakistan has taken a small step by launching two indigenously manufactured satellites, Remote Sensing Satellite-1 (PRSS-1) and Pakistan Technology Evaluation Satellite-1A (PakTES-1A) into orbit using a Chinese launch vehicle.

PRSS-1 is an earth observational and optical satellite, which will allow SUPARCO to analyze its imagery requirements in terms of land mapping, agriculture classification and assessment, urban and rural planning, environmental monitoring, natural disaster management and water resource management for the socio-economic development of the country. After the launch, Pakistan has joined the elite club to have its own remote sensing satellite in orbit.

Pakistan is an active participant of international cooperation of Asia Pacific Space Cooperation Organization (APSCO). The APSCO is an inter-governmental institute functioned as a non-profit independent body with full international legal status. Its Members include space agencies from Bangladesh, China, Iran, Mongolia, Pakistan, Peru, Thailand, Indonesia and Turkey. The recent launch of satellites by Pakistan is an extension of support given by APSCO. Therefore, it is the conceding fact that after the successful launches of PRSS-1 and PakTES-1A projects, the space collaboration between Pakistan and China with respect to APSCO will be further strengthened.

The launch of two new satellites will facilitate SUPARCO in developing indigenous capabilities in space technology and promote space applications for socio-economic uplift of the country. Recently, an international conference on the Use of Space Technology for Water Management was hosted by the SUPARCO in March 2018. The United Nations Office for Outer Space Affairs (UNOOSA), the Government of the Islamic Republic of Pakistan and the Prince Sultan Bin Abdulaziz International Prize for Water (PSIPW) – were jointly organizing the Conference. The conclusion of the conference was that there mote sensing satellite technology i.e. PRSS-1, have validated established competences in terms of water resource management.

Pakistan is rapidly becoming a water-stressed country and according to some estimates, it could face mass droughts by 2025. In this scenario, a remote sensing satellite will be very beneficial in accumulating the data for future plans to fight against this evolving threat. PRSS-1 will use remote sensing techniques to outline the surface water bodies, assess meteorological variables like temperature and precipitation, estimate hydrological state variables like soil moisture and land surface characteristics, and fluxes such as evapotranspiration will be compiled by scientific methods.

Pakistan along with other South Asian states is the most vulnerable countries to climate change. Satellite remote sensing is a useful scientific tool in understanding the climate system and its changes. The technologies and information related to space contribute a fundamental role in climate knowledge, science, monitoring and early warning. Space-based information can subsidize to calculations of the vulnerability of societies to climate change and can help monitor the efficiency of adaptation strategies.

Agriculture holds a great significance for Pakistan and being an agrarian economy, all institutions should be playing a positive role for consolidation in the agriculture sector. The professions related to agriculture i.e. farmers, agronomists, food manufacturers and agricultural policymakers can concurrently augment production and profitability by using space-based technology. The best apparatus to monitor and enhance agriculture development is a remote sensing satellite, which provides key data for monitoring soil, snow cover, drought and crop development. Remote sensing satellite can assess and record precipitation for farmers to assist them in scheduling the timing and amount of irrigation they will need for their crops. Precise data and examination can also benefit in forecasting a region’s agricultural output well in advance and can be critical in anticipating and mitigating the effects of food shortages and famines.

In this era of technological advancement, the Global community today faces a series of non-tradition threats such as climate change and the management of depleting natural resources. In the backdrop of emerging requirements of societal and economic development, geospatial technology is evolving as a top technological domain in the 21st century. The technologies related to earth observation and remote sensing techniques are getting growing interest from the academia, scientists, governments and industries. Pakistan is increasing its efforts in managing natural resources, enhance sustainable urban and territorial development initiatives, facilitate the conservation of forests and valuable biodiversity habitats. Space technologies must benefit all countries; therefore, the international community must support Pakistan to ensure the peaceful application of its space programme.

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