WASHINGTON, Apr 23 (INP): Instead of exhausting itself in competing with an Indian neighbor six times its size, Pakistan needs to confront religious extremism, eliminate terrorism and pursue economic reforms that they talk about but do not implement. Pakistan’s elite needs to start paying taxes to overcome one of the worst tax-to-GDP ratios in the world, former Ambassador to US said in an opinion published in Wall Street Journal on Thursday.
China’s President Xi Jinping arrived in Islamabad this week with promises of $46 billion in investment for Pakistani infrastructure. If all envisaged projects materialize, Pakistan would get a network of roads, railways and energy pipelines linking Pakistan’s port of Gwadar to China’s westernmost Xinjiang region. China would also build Pakistan’s half of a long-delayed natural-gas pipeline from Iran. This would be a shot in the arm for Pakistan’s faltering economy and consolidate a decades-old strategic partnership.
The U.S. has shown little apprehension over China taking the lead in helping Pakistan build critical infrastructure. The U.S. cannot inject billions of dollars into Pakistan, a difficult ally at the best of times. From Washington’s perspective, it makes sense to let China help stabilize Pakistan’s economy. The country’s productivity has been marred by power outages and, according to the World Bank, Pakistan loses up to 6% of gross domestic product every year due to energy shortages and poor transport facilities.
The Obama administration would also like China to induce Pakistan to abandon its role as a terrorist safe haven. China has been concerned by Pakistan-based jihadists operating in Xinjiang and U.S. officials hope Beijing can be successful in persuading Pakistan to clamp down on the various Islamist groups operating from its soil. But China’s economic reassurances could also reinforce Islamabad’s miscalculations about its regional clout and dangerous ambitions of keeping India strategically off-balance through subconventional means, including terrorism.
Just as Pakistan turned to the U.S. soon after independence in 1947 to seek weapons and economic assistance against India, Pakistan’s leaders today see China as a supporter in their bid to be India’s regional rival. The U.S. disappointed Islamabad by refusing to back its military confrontations with India even while selling Pakistan U.S. weapons (intended for other purposes). Now it might be China’s turn to be the object of unrealistic Pakistani expectations.
Unlike the U.S., China has refrained from lecturing Pakistan’s civilian and military leaders, creating an impression of consistency lacking in U.S.-Pakistan ties. China has been a major supplier of military equipment to Pakistan and was particularly helpful in Pakistan’s development of nuclear weapons.
By supporting Pakistan militarily, China has ensured that a large part of India’s military remains tied down in South Asia and is unable to challenge China in the rest of Asia. But India remains the larger market and China’s willingness to use Pakistan as a secondary deterrent against India hasn’t meant abandoning ties with New Delhi. Chinese trade with India in 2013 was $65 billion, six times its trade with Pakistan.
Pakistan would benefit if all the billions in Chinese investment come through, but not all previous announcements of Chinese largesse have materialized in Pakistan or elsewhere. Despite announcing plans for more than $24 billion in investment into Indonesia since 2005, a decade later China has invested only $1.8 billion there.
China’s investment in Pakistan, and indeed investment from other sources, would materialize more easily if Pakistan put its house in order. Instead of exhausting itself in competing with an Indian neighbor six times its size, Pakistan needs to confront religious extremism, eliminate terrorism and pursue economic reforms that they talk about but do not implement. Pakistan’s elite needs to start paying taxes to overcome one of the worst tax-to-GDP ratios in the world. Defense spending needs to be rationalized and critical investments made in education to overcome a paucity of skilled manpower.
More likely, the promise of Chinese money will lead Pakistan’s leaders to think China will become their economic and military patron. Mr. Xi would do well not to let that happen, and instead to emphasize reform. He shouldn’t forget that money does not always buy Pakistan’s favor or encourage change in Pakistan’s policies. China may actually lose popularity in Pakistan once its companies arrive and demand primacy of economic considerations. Then China might find itself where Pakistan’s previous benefactor, the U.S., is today. After having provided $40 billion in aid to Pakistan since 1950, the U.S. is now viewed favorably by only 14% of Pakistanis.