Propping up Pakistan: China Pakistan Economic Corridor (CPEC), development finance and International Financial Institutions
Juvaria Jafri (City University of London)
Farwa Sial (University of Manchester)
Paper short abstract:
We study the nature of Chinese investment in Pakistan by drawing upon critical scholarship on (1) aid and investment packages, and (2) the role of money capital through new modalities of investment such as the use of Asian Infrastructure Bank (AIIB).
Paper long abstract:
Pakistan has a turbulent history of socio-economic growth. The inability to structure a domestic economy without recourse to foreign loans, bailouts and aid packages, specific to its historical and geopolitical context has been a cyclical theme especially in relation to traditional investors and donors including the US. In the last few years, Chinese investment in Pakistan under the China Pakistan Economic Corridor (CPEC) has realigned Pakistan's relations with traditional investors and donors. Pakistan's geostrategic position in the Belt Road Initiative (BRI) initiative means Chinese investment in Pakistan may serve as an exemplar of investment patterns in other OBOR countries.As investment and projects under CPEC materialise, the shifting hierarchies and struggle for control by traditional investors (US, Germany, Japan), traditional IFIs (World Bank, the IMF, Asian Development Bank) and aid organisations (USAID, DFID and GIZ) accelerates and creates new dynamics of competition with Chinese capital. The unfolding of CPEC is accompanied by trade wars and uncertainty in the global monetary system. We explore the nature of Chinese investment in Pakistan by enquiring if the Chinese investment model challenges the contemporary geographies of power by comparing Chinese investment with traditional investment. We focus on two avenues: (1) Aid and investment packages, their terms and conditions, and the progress made so far, and (2) the role of money capital through new modalities of investment such as the use of Asian Infrastructure Bank (AIIB). As such, we aim to enquire if Chinese investment transcends or complements the operations of traditional investors.
The political economy of development under the Chinese Belt Road Initiative (BRI)