Pakistan official’s criticism of China’s ‘Silk Road’ projects raises worries

A Pakistani soldier stands guard beside a ship carrying containers during the opening of a trade project in Gwadar port, some 700 kms west of Karachi on November 13, 2016. (AFP file photo)
Updated 10 September 2018
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Pakistan official’s criticism of China’s ‘Silk Road’ projects raises worries

  • Commerce Minister Abdul Razak Dawood suggested that all projects in the $57-billion China Pakistan Economic Corridor program were eligible for suspension and review
  • He said that China may have been granted too-favorable terms in many projects by the former government of Nawaz Sharif

KARACHI/ISLAMABAD: A Pakistani official's critical comments about projects funded by China to the tune of billions of dollars rattled investors and sparked worries on Monday of a souring in ties, a day after Beijing's top government diplomat concluded a visit.

Abdul Razak Dawood, the Pakistani cabinet member for commerce, industry and investment, suggested that all projects in the $57-billion China Pakistan Economic Corridor program could be eligible for suspension in a review to be conducted this week under the orders of new Prime Minister Imran Khan.

"I think we should put everything on hold for a year, so we can get our act together," Dawood told the Financial Times in an interview. "Perhaps we can stretch CPEC out over another five years or so."

He added that he thought China had been granted too-favorable terms in many projects by the former government of Nawaz Sharif.

"Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we're looking at because it's not fair that Pakistan companies should be disadvantaged," Dawood said.

Pakistani markets fell in early trading on Monday, with the benchmark KSE 100 index down 477.38 just after midday at 40,374 points, before recovering to close at 40,684, still down 0.4 percent.

Dawood's comments were "mind-boggling" and rare public criticism of China, said Mohammad Zubair, privatization minister in the previous government.

"This is probably the harshest statement about the Chinese in the last 50 years or so," Zubair told Reuters. "Even if there are issues with the Chinese, those issues could be dealt with in private rather than being made public."

Later on Monday, Dawood told domestic broadcaster Geo TV that his statements had been misconstrued and he would clarify them later.

The critical comments were published just after the Chinese government's top diplomat, State Councilor and Foreign Minister Wang Yi, visited Pakistan and the two sides reaffirmed the mutual benefits of the Beijing-funded projects.

While Khan, a former cricket star, has made no secret he plans to review all government projects and expenditure, the finance ministry last month said Pakistan was "fully committed to undertake and complete CPEC projects in their totality."


Gaza Strip economy is in ‘free fall’ warns World Bank

Updated 1 min 31 sec ago
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Gaza Strip economy is in ‘free fall’ warns World Bank

  • Gaza’s economic situation is likely to worsen because of failed attempts to negotiate an easing of the blockade
  • Repeated attempts to broker a reconciliation deal between rival Palestinian factions — Hamas and President Mahmoud Abbas’s Fatah party — have also failed

JERUSALEM: The Gaza Strip’s economy is in “free fall,” a report from the World Bank warned on Tuesday, calling for urgent action by Israel and the international community to avoid “immediate collapse.”
According to the report, Gaza’s economy contracted by 6 percent in the first quarter of 2018. It said unemployment is now more than 50 percent — and more than 70 percent among Gaza’s youth.
The World Bank cited various factors, starting with Israel’s decade-long blockade against the territory’s militant Hamas rulers, for the precarious downturn. It also cited budget cuts by the rival Palestinian Authority and a reduction in international aid to the Palestinians, particularly from the US.
“A combination of war, isolation and internal rivalries has left Gaza in a crippling economic state and exacerbated the human distress,” said Marina Wes, the World Bank’s director for the region.
The report was released ahead of a high-level meeting of the bank’s Ad Hoc Liaison Committee, responsible for coordinating development assistance to the Palestinians, on Sept. 27.

 

Wes said that the increasingly dire economic situation in Gaza “has reached a critical point.”
“Increased frustration is feeding into the increased tensions which have already started spilling over into unrest and set back the human development of the region’s large youth population,” she added.
Gazans have staged near weekly demonstrations along the border with Israel since late March, in part to protest the blockade enforced by Israel and Egypt since 2007, when the militant group Hamas seized the territory. Hamas has led and organized the protests, but turnout has also been driven by growing despair over blockade-linked hardship, including lengthy power cuts and soaring unemployment.
Israeli soldiers have killed at least 136 Palestinians during the weekly protests since March, including 27 minors, according to Gaza’s Health Ministry. A Palestinian sniper also fatally shot an Israeli soldier. Israel contends it is defending its border and accuses Hamas of using the protests as a screen for attempts to breach the border fence to attack civilians and soldiers. Human rights groups have accused Israel of excessive and unlawful use of force against unarmed protesters.
Gaza’s economic situation is likely to worsen because of failed attempts to negotiate an easing of the blockade. Hamas leaders said this week that Egypt-mediated efforts to broker a long-term cease-fire with Israel have stalled.
Repeated attempts to broker a reconciliation deal between rival Palestinian factions — Hamas and President Mahmoud Abbas’s Fatah party — have also failed. Abbas now governs just parts of the West Bank.
In the report, the
World Bank calls on Israel to lift restrictions on trade and movement of goods and people to help improve Gaza’s economy, and urges development of “legitimate institutions to govern Gaza in a transparent and efficient manner.”

FACTOID

Unemployment in Gaza is now more than 50 percent — and more than 70 percent among the youth.