NEW DELHI: Beijing's "new guidelines" overseeing the release of funds to Pakistan as part of its ambitious China-Pakistan Economic Corridor may stipulate greater involvement of the Pakistan army in the multi-billion dollar project, a report by global think-tank European Foundation for South Asian Studies (EFSAS) suggests.
The funding of three major road projects in Pakistan was expected to be finalised during the Joint Working Group (JWG) meeting held on November 20, but Islamabad was informed that the existing procedure for release of funds had been abolished and "new guidelines" would be issued from Beijing under which new modus operandi for release of the funds would be described.
While the Chinese government had cited rampant graft as the reason behind halting funds to the three road projects, the EFSAS report argues that Beijing is "keen to give the Pakistani Army the lead role" in CPEC projects as it sees the armed forces as "the epicentre of power in Pakistan", whose involvement would guarantee the success of the flagship venture.
Further bolstering China's intent for a greater role for Pakistani military is the volatility of the country's civilian government, which witnessed the dismissal of Prime Minister Nawaz Sharif on graft charges in recent months. But corruption is not the Chinese government's only concern.
"Had corruption been the reason behind the Chinese step (to block funds), it would, or perhaps should, have happened in July, when in the context of the Panama Papers, the former Pakistani Prime Minister Nawaz Sharif and his relatives were charged with financial irregularities and corruption, which prompted the Pakistani Supreme Court to declare Nawaz Sharif 'unfit' for political office, resulting in his dismissal from the Office of the Prime Minister of the country," the report postulated.
The EFSAS analysis puts forth that Beijing has been alarmed by the opposition of Pakistani legislators, who have questioned the benefits of several projects under CPEC. Evidently, this has resulted in setbacks and delays which has not made Chinese investors happy.
"The Chinese are not used to such harsh disagreements which evidently would have made people in Beijing nervous over the future of its vital projects. Pakistan is a political volatile country where power is unevenly divided between the Government and the Military and a closer involvement of the Military on political issues would have desirable impacts for China...," the report said.
The involvement of the Pakistani Army would also mitigate some of China's security concerns, given that the nearly $50-billion flagship project passes through the region of Gilgit Baltistan, which links China's restive Xinjiang region with Pakistan's insurgency-torn Balochistan province, where in October, a Chinese workers' shelter at the Pakistani port of Gwadar was attacked.
So on one hand, the decision to halt funding may seem like a punitive measure by China to reassert control over the situation. At the same time, its favourable view of Pakistani military could play a significant role in deciding who will take ownership of the CPEC projects and by extension, the security situation - the civilian government or the army.
"The current deferral to release funds is temporary and China's way of conveying a diplomatic, yet strong, message to the Pakistanis; 'We will pay, but only on our terms'," the EFSAS report concludes.