Pakistan's foreign investment bill fits well with Chinese salami-slicing playbook: Report

Islamabad [Pakistan], December 21 (ANI): Pakistan's Foreign Investment (Promotion and Protection) Bill, 2022 has landed in controversies. The aim of the bill is to promote and protect certain "qualified foreign investments" which are expedient and in the national interest to gather large-scale foreign investments of USD 500 million or more, Financial Post reported.
As per the news report, the new bill "fits very well with the Chinese playbook of salami slicing and gobbling up the territories" to advance its own geostrategic ambitions. Addressing the Assembly, Pakistan's Prime Minister Shehbaz Sharif said that with the approval of the bill, Balochistan will reap the maximum benefit in the RekoDiq project by receiving around USD 35 to 40 billion in three decades.
On Friday, Pakistan's Senate gave a green signal to the bill for amendments to a recently approved foreign investment law, seeking to limit the legislation's scope in Balochistan, Dawn reported. The passage of the bill faced controversy due to the RekoDiq dispute. The RekoDiq open-pit mine is located in the Chagai district of Balochistan and is one of the largest copper and gold reserves in the world with estimated reserves of over 5.9 billion tonnes of ore.
The mining agreement was signed in 2006 between Canada's Barrick Gold, Chile's Antofagasta and the Balochistan government in a revenue-sharing model, according to Financial Post. However, the project was stopped after the provincial government did not agree to renew Tethyan Copper's lease in 2011. World Bank's arbitration tribunal ICSID took up the case and imposed a penalty on Pakistan for unlawful denial of mining.
In order to attract foreign investments, Pakistan has come up with this bill. However, the bill gives powers to the federal government to notify any foreign investment project as "Qualified Foreign Investment" and provide incentives it deems fit even if the investment is less than USD 500 million. Clause 3(7) in the bill makes the Federal government incompetent to remove any "Qualified Investment" that has been placed in the first schedule.
The legislation is "going to enable China to effectively colonize Pakistan through its debt-trap diplomacy.": The International Monetary Fund in its report in 2022 has raised concerns regarding China-Pakistan Economic Corridor (CPEC), according to Financial Post. As Pakistan has to pay more than 30 percent of its total foreign debt to China, the new bill is going to work well for China's plan of "Salami Slicing Pakistani territory," the Financial Post report said.
As per the news report, China is Pakistan's largest bilateral creditor with loans of over USD 14.5 billion. Lending has been made under various other categories, including China's State Administration and Foreign Exchange (SAFE) which has lent over USD 7 billion to Pakistan. Furthermore, a significant part of Chinese lending is for CPEC which underlines the strategic intent behind lending.
Chinese firms have completed some of the CPEC projects and undertaking several other investments. China has purchased a 40 percent stake in the Pakistan Stock Exchange (PSX) company. Beijing is also intending to purchase a power utility in Karachi, which is one of the largest energy companies in Pakistan, as per the news report.
Khurram Ali, Secretary General of Awami Workers Party in Karachi, said that various oil exploration blocks in the Sindh region are being given to Chinese companies. In addition to Gwadar port, an airport and several other major projects are being developed by Chinese firms in Balochistan.
With this new legislation, China will get a "free run to make loot in this country with the connivance of the Pakistani political and military elites" and deprive the people of Pakistan of growth, livelihood, and prosperity. Several lawmakers and Pakistani leaders have raised concerns regarding the new legislation.
BNP-M's President Sardar Akhtar Mengal expressed concern about bill being passed overnight in National Assembly. Mengal claimed that Balochistan's resources have been taken as "maal-e-ghanimat" by foreigners and Pakistani elites. Minister of Housing and Works, Maulana Abdul Wasay, opposed the bill and emphasized that it would take away the resources of the province without the say of the local government. (ANI)