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Mission Creep: Pakistani military’s crackdown on Karachi

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By NewsGram Staff Writer

International news agency, Reuters, has come out with a revealing report disclosing the advancement of Pakistan military towards the largest city, Karachi as a ‘creeping coup’.

The latest and, some say, the boldest attempt, made by the military towards capturing control from the Muttahida Quami Movement (MQM) in the port city of Karachi, is being seen as renewed foray into the civilian life of the country.

The campaign is being spearheaded by the head of Pakistan’s spy agency Inter-Services Intelligence (ISI), Rizwan Akhtar.

Remarking on the ongoing takeover and the perpetrated attack on the MQM party, an official close to the ISI chief said, “There is a quiet, creeping takeover of Karachi by the military. Karachi is just too big … too much land, too much business, resources. No one party will be allowed to rule Karachi from now on.”

The military clampdown on the largest and wealthiest city of Pakistan began in 2013 when a spate of murders took place with the disfigured bodies being dumped in the alleys.

While officially the operation was aimed at eliminating criminals and militants, most people see it as a planned attack on MQM.

Straddling and stamping over MQM and weakening the grip of exiled leader, Altaf Hussain, over the party would ensure an easy playfield for parties close to the military, such as Imran Khan-led Tehreek-e-Insaf party.

Moreover, with the introduction of military courts to tighten stranglehold over the judiciary, foreign policy and national security, the military is trying to leverage Pakistan’s economic hub.

Karachi hosts the stock exchange, a giant port, central bank and accounts for more than half of the national revenues of Pakistan.

However, Pakistan army’s hawkish movements can prove to be counterproductive, particularly by making tougher and harder proposed rapprochement with India.

The army accuses the MQM of heinous crimes such as targeted killings, kidnappings and racketeering in Karachi.

According to the police estimates, more than 2,500 hundred murders took place in the city in 2013.

Even as the army levels allegations against the party, the MQM vehemently denies the charges saying that it has cooperated with the rangers in the past but will not allow the army to dismantle the party.

Meanwhile, senior government officials say that the civilian administration has been sidelined in Karachi and decisions are being taken by the Rangers and the chief military commander of the Sindh province.

As per the officials, the government was not consulted while lodging the complaint against Hussain and initiating the raid.

MQM’s leaders, on their part, blame the military for unfairly targeting them by launching a campaign of mass arrests and political “disappearances.”

At least 36 MQM workers have been killed so far and more than 2600 arrested.

The military, however, wants to completely annihilate the “militant” party.

All would be well if only the exiled leader, Altaf Hussain, steps down. An official close to the army said, “If Altaf Hussain steps down, the MQM will live on; if he doesn’t, the party will go down with him.”

A senior MQM leader, who did not want to criticize Hussain openly said, “We have built this party with our sweat and blood. Now a man living in exile is intent on destroying it.”

Irrespective of the critical opinions and the army onslaught, the by-elections in Karachi on Thursday handed down a comfortable victory for the MQM party.

In the wake of such conflicting developments, Hussain remains defiant saying, “The people and Altaf Hussain have a special relationship which cannot be shaken.”

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Pakistan Fears Economic Turmoil, Re-thinks ‘Silk Road’ Project With China

In 2017, Pakistan turned down Chinese funding for a $14 billion mega-dam project in the Himalayas because of cost concerns.

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A man passes through a railing while others board a train as they make their way home at the Cantonment railway station in Karachi, Pakistan. VOA

After lengthy delays, an $8.2 billion revamp of a colonial-era rail line snaking from the Arabian Sea to the foothills of the Hindu Kush has become a test of Pakistan ’s ability to rethink signature Chinese “Silk Road” projects because of debt concerns.

The rail megaproject linking the coastal metropolis of Karachi to the northwestern city of Peshawar is China’s biggest Belt and Road Initiative (BRI) project in Pakistan, but Islamabad has balked at the cost and financing terms.

Resistance has stiffened under the new government of populist Prime Minister Imran Khan, who has voiced alarm about rising debt levels and says the country must wean itself off foreign loans.

“We are seeing how to develop a model so the government of Pakistan wouldn’t have all the risk,” Khusro Bakhtyar, minister in Pakistan’s planning ministry, told reporters recently.

Pakistan
Visitors read instruction material about land that was reclaimed from the Indian Ocean for the Colombo Port City project, on the Galle Face sea promenade in Colombo, Sri Lanka, Jan. 2, 2018. The Port City project was initiated as part of China’s Belt and Road Initiative. VOA

Unease elsewhere

The cooling of enthusiasm for China’s investments mirrors the unease of incoming governments in Sri Lanka, Malaysia and Maldives, where new administrations have come to power wary of Chinese deals struck by their predecessors.

Pakistan’s new government had wanted to review all BRI contracts. Officials say there are concerns the deals were badly negotiated, too expensive or overly favored China.

But to Islamabad’s frustration, Beijing is only willing to review projects that have not yet begun, three senior government officials have told Reuters.

China’s Foreign Ministry said, in a statement in response to questions faxed by Reuters, that both sides were committed to pressing forward with BRI projects, “to ensure those projects that are already built operate as normal, and those which are being built proceed smoothly.”

Pakistani officials say they remain committed to Chinese investment but want to push harder on price and affordability, while re-orientating the China-Pakistan Economic Corridor (CPEC), for which Beijing has pledged about $60 billion in infrastructure funds, to focus on projects that deliver social development in line with Khan’s election platform.

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China’s ambassador to Pakistan, Yao Jing, Islamabad. VOA

‘Mutual consultation’

China’s Ambassador to Pakistan, Yao Jing, told Reuters that Beijing was open to changes proposed by the new government and “we will definitely follow their agenda” to work out a roadmap for BRI projects based on “mutual consultation.”

“It constitutes a process of discussion with each other about this kind of model, about this kind of roadmap for the future,” Yao said.

Beijing would only proceed with projects that Pakistan wanted, he added.

“This is Pakistan’s economy, this is their society,” Yao said.

IMF bailout likely

Islamabad’s efforts to recalibrate CPEC are made trickier by its dependence on Chinese loans to prop up its vulnerable economy.

Growing fissures in relations with the United States, Pakistan’s historic ally, have also weakened the country’s negotiating hand, as has a current account crisis likely to lead to a bailout by the International Monetary Fund, which may demand spending cuts.

“We have reservations, but no other country is investing in Pakistan. What can we do?” one Pakistani minister told Reuters.

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Laborers dig the ground before replacing concrete sleepers along railway tracks in Karachi, Pakistan. VOA

Crumbling railways

The ML-1 rail line is the spine of country’s dilapidated rail network, which has in recent years been edging toward collapse as passenger numbers plunge, train lines close and the vital freight business nosedives.

Khan’s government has vowed to make the 1,872 km (1,163 mile) line a priority CPEC project, saying it will help the poor travel across the vast South Asian nation.

But Islamabad is exploring funding options for CPEC projects that depart from the traditional BRI lending model, whereby host nations take on Chinese debt to finance construction of infrastructure, and has invited Saudi Arabia and other countries to invest.

One option for ML-1, according to Pakistani officials, is the build-operate-transfer (BOT) model, which would see investors or companies finance and build the project and recoup their investment from cash flows generated mainly by the rail freight business, before returning it to Pakistan in a few decades time.

Yao, the Chinese envoy, said Beijing was open to BOT and would “encourage” its companies to invest.

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A man waits to cross a portion of track once shared with the Karachi Circular Railway line in Karachi, Pakistan. VOA

Large rail projects, problems

Rail mega-projects under China’s BRI umbrella have run into problems elsewhere in Asia. A line linking Thailand and Laos has been beset by delays over financing, while Malaysia’s new Prime Minister Mahathir Mohamad outright canceled the Chinese-funded $20 billion East Coast Rail Link (ECRL).

Beijing is happy to offer loans, but reticent to invest in the Pakistan venture as such projects are seldom profitable, according to Andrew Small, author of a book on China-Pakistan relations.

“The problem is that the Chinese don’t think they can make money on this project and are not keen on BOT,” Small said.

Off-books debt

During President Xi Jinping’s visit to Pakistan in 2015, the ML-1 line was placed among a list of “early harvest” CPEC projects that would be prioritized, along with power plants urgently needed to end crippling electricity shortages.

But while many other projects from that list have now been completed, the rail scheme has been stuck.

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. The difference between the two validate the investments made on the road, and give a hopeful image for the future.

Pakistani officials say they became wary of how early BRI contracts were awarded to Chinese firms, and are pushing for a public tender for ML-1.

Partly to help with price discovery, Pakistan asked the Asian Development Bank (ADB) to finance a chunk of the rail project through tendering. The ADB began discussions on a $1.5-$2 billion loan, but China insisted the project was “too strategic,” and Islamabad kicked out the ADB under pressure from Beijing in early 2017, according to Pakistani and ADB officials.

“If it’s such a strategic project then it should be a viable project for them to finance on very concessional terms or invest in?” said one senior Pakistani official familiar with the project, referring to the BOT model.

China’s foreign ministry said Beijing was engaged in “friendly consultations” with Pakistan on the rail project.

Chinese companies participated in BRI projects in an open and transparent way, “pooling benefits and sharing risks,” it said.

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In this file photo taken Oct. 10, 2015, a bus moves past by solar power and wind power farms in northwestern China’s Ningxia Hui region.

Chinese debt or no project

Analysts say Pakistan will struggle to attract non-Chinese investors into the project, which may force it to choose between piling on Chinese debt or walking away from the project.

In 2017, Pakistan turned down Chinese funding for a $14 billion mega-dam project in the Himalayas because of cost concerns and worries Beijing could end up owning a vital national asset if Pakistan could not repay loans, as occurred with a Sri Lankan port.

Khan’s government chafes at several Chinese intercity mass transport projects in Punjab, the voter heartland of the previous government, which now need hundreds of millions of dollars in subsidies every year.

Also Read: Creating a New Silk Road: China’s Billion Dollar Investments to Expand Its Transportation Network

They also fume about the risk of accumulating off-books sovereign debt through power contracts, where annual profits of above 20 percent, in dollar terms, were guaranteed by the previous administration.

With the ML-1 line, there are also those who harbor doubts closer to home, including the previous government’s finance minister, Miftah Ismail, who said his ministry had always had concerns about its viability.

“When people say it’s a project of national importance, that usually means it makes no sense financially,” he said. (VOA)