Pakistan caught between financial crisis and Balochi hitback to CPEC

The suicide attack by Balochi insurgents on the Chinese consulate in Karachi touches a raw nerve in Beijing because it comes at a time when it is betting heavily on its all-weather friend to rescue some credibility for its Belt and Road Initiative. With many frontier countries, where China had invested heavily on infrastructure and strategic corridors, now rejecting this economic overlordship given the insidious debt traps they are subjected to, Pakistan seems to be the only saving grace in its grandiose “string of pearls” diplomacy. Not that Pakistan is entirely happy about bad debts. Besides, the inordinate delay of the China-Pakistan Economic Corridor (CPEC), which allows China to circumvent India and get access to the port of Gwadar through Balochistan, has more than once challenged the geo-political fibre of the Pakistan-China understanding. But fact is both are negotiating their importance in a strategic backyard. With India categorically rejecting China’s BRI and Pakistan being the perfect counterweight, both have pushed their giant economic project as an adhesive that is mutually self-serving. Besides, Pakistan is grappling with a serious economic crisis, and with the US and UK not too friendly in cultivating it at the moment, it needs Chinese finance to bail it out. In fact, new Prime Minister Imran Khan signed fresher trade agreements with China during his recent visit to increase mutual sustenance and strategic depth in the region and claimed that the terrorist attack was an attempt to derail the CPEC and scare Chinese investors.

However, Khan has no handle on local resistance to the project. The Balochis resent that the corridor passes through their land, which is rich in natural minerals and gas and can be mined profitably in a resource-scarce world on their terms. But forced out of stakeholdership, jobs that were outsourced and a heavy military presence, they have hit back at the Chinese more than once, this being the worst attack though. Three Chinese executives were kidnapped and killed in Quetta and Karachi earlier. The estimated cost of CPEC is $56 billion of which an estimated $7.1 billion is to be invested in Balochistan, with initial investments  in energy, transport and development of Gwadar city and port, according to Pakistan government files. But Balochis see this as an attempt to transform the region demographically, socially and economically and reduce their bulwark status against ISIS and other terrorist networks that the Pakistan Army has been using for its own imperatives. They see the land acquisition exercise in the name of the corridor project as a blatant way of further defanging their efforts of retaining an autonomous identity. Strategically, India has been quick to condemn a “terrorist attack”, considering Pakistan always blames a restive Balochistan as being encouraged by India. Fact remains though that passions against CPEC are high and Pakistan is now reduced to the status of a Chinese client state ever since it has accepted the terms of allowing the Yuan as an exchange currency at Gwadar, much to the chagrin of those who saw it nothing less than an affront to Pakistani sovereignty. By directing its financial institutions to trade in Yuan against prevailing international norms may further alienate Pakistan regionally and globally.