CPEC and Developments

[Oracle]

Panacea to Pakistan's economic woes is to allow this trade

You somehow see Pak making money through transit fees from CAsia to India as a carrot for their official policy on terrorism to stop. Have we seen even a dip in terrorist infiltration? Pompeo the other day warned Pak again directly, has Pak changed course? I don't understand where this positivity with regards to Pakistan comes from. Your idea matches the thinking of the polity makers in the Indian administration, who for successive decades have got used to absorbing hits from Pakistan.

Panacea to Paks economic woes is the PA's further grip on Pakistan, continuing their state policy of terrorism, killing and mayhem, and when fingers are pointed scream about nuke armageddon i.e., put a gun to their own head and go begging for alms from other states.

[Double Edge]

You somehow see Pak making money through transit fees from CAsia to India as a carrot for their official policy on terrorism to stop. Have we seen even a dip in terrorist infiltration? Pompeo the other day warned Pak again directly, has Pak changed course? I don't understand where this positivity with regards to Pakistan comes from. Your idea matches the thinking of the polity makers in the Indian administration, who for successive decades have got used to absorbing hits from Pakistan.

It's up to them to decide. Once cross border trade is allowed it acts as a catalyst for more trade.

Do you see any objection from China here ? I don't. China isn't the prime instigator of their terrorism policy, it's all Rawalpindi's doing.

Absorbing hits is because we do not consider Pakistan a strategic threat but as a problem to be managed.

Panacea to Paks economic woes is the PA's further grip on Pakistan, continuing their state policy of terrorism, killing and mayhem, and when fingers are pointed scream about nuke armageddon i.e., put a gun to their own head and go begging for alms from other states.

How long can they keep on doing that : )

Just repeating what Capt. Alok Bansal said in a show, thought it merited a mention

This idea of transit fees as a catalyst isn't new it dates back to the Vajpayee administration if not further back

[Oracle]

It's up to them to decide. Once cross border trade is allowed it acts as a catalyst for more trade.

Do you see any objection from China here ? I don't. China isn't the prime instigator of their terrorism policy, it's all Rawalpindi's doing.

Absorbing hits is because we do not consider Pakistan a strategic threat but as a problem to be managed.

Then, why is China still fishing in the NE or with the Naxals? India loses much needed revenue to maintain its sovereignty, that it can channel towards spending on infrastructure, fighting social evils, providing 2 square meals to all its citizens. But no, India is bogged down on both its northern and north-eastern frontiers, because of what......goodwill from China? JeM is China's baby, they're still protecting Masood Azhar, its on record.

India has given MFN status to Pakistan in 1994, did the Paks reciprocate? China has been filling Pak markets with cheap China manufactured goods and decimating their industry, and yet Pak Generals are gung-ho about it. Don't you see the irony in your arguments?

Americans have given billions of dollars to the Paks, has terrorism stopped? Money is a means for the Pak generals, their hatred for India along-with geo-politics is what alone matters.

You say it's upto them to decide. Well, the terrorist Army have kept a Superpower bogged down in Afghanistan since 2001. Any deal India makes via Pak, they keep us bogged down too. Pak doesn't care about transit fees, their Army makes much more money through the Karachi Stock Exchange, various business, narcotics smuggling, counterfeit currency racketeering, and so on and so forth.

How long can they keep on doing that : )

Just repeating what Capt. Alok Bansal said in a show, thought it merited a mention

This idea of transit fees as a catalyst isn't new it dates back to the Vajpayee administration if not further back

They keep doing that until the day India bisects Pakistan vertically and horizontally. The idea of state sponsored terrorism isn't new either, it started in 1947, still continues.

You know what Vajpayee's biggest achievement was? Kargil.

[Oracle]

Gwadar conundrum

Gwadar seems to be an exceptionally strong magnet attracting so many different forces towards it. China seems to have the most affinity and fascination for it. It is a new contender to superpower status and does not let an opportunity go by to spread its footprint however it can. Here it has found a willing accomplice in the form of the Pakistani establishment that also aspires to become at least a regional power. They think that Gwadar has all the characteristics that will help them further their respective goals. The common trait of these two is their abhorrence of diversity and greed for profits and land. China, despite its large landmass, is busy reclaiming land in the South China Sea in disputed areas and is building runways for possible military use on the Spratly Islands; Obama recently warned the country over this reclamation. For China, Gwadar is a Godsend as it is getting it all simply by investing. Yes, investing $ 46 billion to reap profits. This is not the mind-boggling sum it is shown to be because Exxon Oil company’s profits in 2008 alone were $ 46 billion.

Apart from easy trade routes and accessible corridors for its energy needs, China needs bases to protect these vital installations and routes, and it will not trust others to shoulder that responsibility. Gwadar is one such strategic point for China and it matters not to them how much Baloch blood is shed or of what magnitude Baloch suffering is. Having found a willing ally here, it is certainly not going to relinquish any such opportunity for altruistic reasons alone. China is bent upon making the highest profits possible and it has threatened the government that it will quit the cherished China Pakistan Economic Corridor (CPEC) if the tariff rates for its solar project are cut.

Gwadar airport has long been seen as a venue for a military and air force base. If this were not the case why disregard normal procedure when the 6,600 acres for the new Gwadar airport were being purchased? It was the Military Estates Officer (MEO) in Quetta instead of the Civil Aviation Authority (CAA) that bought the land for Rs.1.05 billion. Any land acquired by the Military Lands and Cantonments (MLC) makes it the property of the Pakistan Army and this fact alone thoroughly exposes the claims that Gwadar is an exclusively commercial project. Moreover, in a January 26, 2007 Senate debate, Senator Raza Rabbani — then a dove probably — said that the airport in Gwadar was a “civil-military” airbase and that was why the MLC had acquired thousands of acres of land. Interestingly, also in this report, Senator Dr Abdul Malik (the present Balochistan chief minister) told the house that the government had purchased 150,000 acres of land through the MLC for Gwadar airport and not all people had been paid. There was uproar over the price paid as well: Pakistan Railways paid Rs 55,000 per acre while the MLC paid Rs 157,000 per acre.

Hartsfield-Jackson Airport Atlanta has been the world’s busiest airport since 1998 and attracts more travellers than any other airport in the world with 96,178,899 passengers passing through in 2014. It also manages more aircraft movements (takeoffs and landings) than any other airport in the world with 881,933 in 2014 and is built only on 4,700 acres. Gwadar airport is twice the size of London’s Heathrow (2,965 acres) where a plane lands or takes off every 46 seconds at peak time, handling 73,408,442 passengers and 472,817 aircraft movements in 2014. This oversized place is obviously required for objectives other than what is publicised. China needs a base and needs it pronto; it has to compete with US bases to make its mark as the new kid on the superpower block and the Pakistani government has allocated Rs 26 billion for the purpose.

Militarising Gwadar and imposing apartheid-like measures of residence passes for the residents of Gwadar is not something random but is part of a systematic policy to ensure that the Baloch are thoroughly disenfranchised in every way and are pushed into a corner from which they find themselves unable to resist whatever indignities and injustices are heaped upon them. This viciously inhuman policy stems not only from the desire of fulfilling their economic and strategic requirements but also from visceral vindictiveness aimed at punishing the Baloch for their resistance to the Pakistani establishment’s aim of exploiting Balochistan’s resources and utilising its 347,190 km² landmass for purposes that would deprive the Baloch but benefit their chosen ones as has been seen with natural gas, copper, gold and onyx.

The United Nations Working Group on Enforced or Involuntary Disappearances (WGEID) visited Pakistan in September 2013 but was accorded minimum of cooperation. This group visited Sri Lanka recently, inspected a former illegal prison complex in the island’s northeast during its visit, and urged Sri Lanka to speed up probes into suspected secret detention centres. Since the CPEC signing, the number of missing persons has jumped. The WGEID should also probe secret prisons, which are black holes here in which thousands of Baloch have disappeared. The impunity and the scale with which disappearances have continued in Balochistan verges on genocide and the UN body should be allowed unhindered access to these black holes to see for itself the plight of the missing Baloch.

This vindictive repression and systematic disenfranchisement of the Baloch is being helped and spurred on by disunity among the Baloch. The parable of the trees and axe is apt here. The trees complained that the axe was committing atrocities against them and something must be done to stop axe-perpetrated excesses. They were told if it were not for those of them that became the axe’s handle, the axe would be pretty much harmless. The festering and malignant disunity among the Baloch on every level is certainly not helping the Baloch in any way and is on the contrary spurring the establishment on. The latter realises how this destructive and noxious disunity weakens all Baloch, and encourages it towards more harsh and unjust measures in order to weaken them beyond recovery point. The responsibility for salvaging and protecting Baloch rights lies squarely on the shoulders of those who claim to be leaders. Without unity there is danger that the Baloch struggle for rights will become a forgotten chapter.

Old, but relevant.

[Double Edge]

Then, why is China still fishing in the NE or with the Naxals? India loses much needed revenue to maintain its sovereignty, that it can channel towards spending on infrastructure, fighting social evils, providing 2 square meals to all its citizens. But no, India is bogged down on both its northern and north-eastern frontiers, because of what......goodwill from China? JeM is China's baby, they're still protecting Masood Azhar, its on record.

Fishing or supporting ?

Azhar's protection comes with an expiry date. I see this as just helping to keep the Paks on side at low cost.

India has given MFN status to Pakistan in 1994, did the Paks reciprocate? China has been filling Pak markets with cheap China manufactured goods and decimating their industry, and yet Pak Generals are gung-ho about it. Don't you see the irony in your arguments?

Implication being if the generals make more money they will want to keep on attacking India so at all costs then we should above all not be the ones helping them make more money ?

Americans have given billions of dollars to the Paks, has terrorism stopped? Money is a means for the Pak generals, their hatred for India along-with geo-politics is what alone matters.

You say it's upto them to decide. Well, the terrorist Army have kept a Superpower bogged down in Afghanistan since 2001. Any deal India makes via Pak, they keep us bogged down too. Pak doesn't care about transit fees, their Army makes much more money through the Karachi Stock Exchange, various business, narcotics smuggling, counterfeit currency racketeering, and so on and so forth.

They keep doing that until the day India bisects Pakistan vertically and horizontally. The idea of state sponsored terrorism isn't new either, it started in 1947, still continues.

Depends how hard up they are.

Imran Khan’s moment of truth | DNA (op-ed) | Oct 24 2018

The conclusion: Within a decade or less, Pakistan’s window of opportunity to negotiate a settlement on Kashmir will shut. The power differential would by then be unbreachable. Yusuf says Pakistan must therefore shift its focus from geo-politics to geo-economics. Translated, this means abandoning the jihadi factories aimed at India and focusing on the economy.

moeed's said this over six months back btw. The clock is ticking. Do you see any daylight for the Paks as far as their economy is concerned ?

You know what Vajpayee's biggest achievement was? Kargil.

What about nuke testing, then sanctions and getting Clinton to come over a mere two years later ?

[Oracle]

Fishing or supporting ?

Azhar's protection comes with an expiry date. I see this as just helping to keep the Paks on side at low cost.

You're seeing it the wrong way. It keeps Indian military engaged, precious money wasted. It might be low cost for the Pak-China nexus, but it is costing us, our taxpayer money.

Fishing, supporting, arming, funding - all's same in my book. One who fishes in troubled waters or supports my enemy, one who arms my enemy, he's an enemy. You're trying to find meaning in semantics, while missing out the Jihadi logic and how low cost asymmetrical warfare is keeping India from progressing. Time, money, public infrastructure, local businesses, civilian and military lives - all wasted.

India can absorb hits for another 50 years, but has our policy makers figured out and then jotted down those strategies on how to win this war of attrition in maybe another 5,10,15 years? India can't let this go on forever right? It has to stop.

Implication being if the generals make more money they will want to keep on attacking India so at all costs then we should above all not be the ones helping them make more money ?

YES. Pak is bankrupt, do you see any respite in cross border terrorism? Any change in Pak behaviour? Paks do not need any money to keep the Jihadi tap from flowing. I told you before - PA controls the Karachi Stock exchange, they have multiple businesses, they control land, they control everything. If India signs up for TAPI, knowingly India will be funding attacks on its own civilians and security forces.

Depends how hard up they are.

PA doesn't care.

Imran Khan’s moment of truth | DNA (op-ed) | Oct 24 2018

moeed's said this over six months back btw. The clock is ticking. Do you see any daylight for the Paks as far as their economy is concerned ?

Mooed's para is correct in the sense that economically and militarily India will be huge in 10 years. I agree. What he fails to mention is - daylight is the PAs' control over Pak. Till PA rules Pakistan overtly or covertly, terrorism will not stop. PA is the means to get rich, acquire land and live a lavish lifestyle even after retirement, no need to win wars or international accolades. So you see illiterates being churned out by Pakistan every day as Jihadi abduls. These people don't have money to eat, so they sign up for a one way ticket to Jannat, brainwashed that 72 virgins will be waiting for them. Their families are also promised money for their sons shahadat, but those money is gobbled up by the Islamic clerics to fund more Jihadi abduls.

Fools logic - An Islamic Jihadi country with nukes should not be allowed to fail. It's not in out interests. This is what keeps the country going on and on. Someone or the other will always pay alms to Pak, because mercenaries will always be needed in some theater in another part of the world. Has anyone ever thought about how diving Pakistan into smaller independent countries will solve the Islamic Jihadi menace and islamic nuke problem once and for all?

What about nuke testing, then sanctions and getting Clinton to come over a mere two years later ?

I am talking about achievements, something like 1971.

Having said that, it would be very unsavoury to not give credit to the Vajpayee government for economic policies etc, of what I can remember. But, THE BIG STICK, only Indira raised, and beat Pak black and blue with it. Ask the Pakistanis, they still shriek in pain remembering 1971.

[Double Edge]

You somehow see Pak making money through transit fees from CAsia to India as a carrot for their official policy on terrorism to stop. Have we seen even a dip in terrorist infiltration?

Pak is bankrupt, do you see any respite in cross border terrorism? Any change in Pak behaviour?

Leverage ? how much do we have over them presently. This is a way to get some leverage and influence their actions.

Paks do not need any money to keep the Jihadi tap from flowing. I told you before - PA controls the Karachi Stock exchange, they have multiple businesses, they control land, they control everything.

All that money they control isn't enough to stop them seeking bailouts repeatedly from others. The question is what is the cost to them to continue down the present path. If a transit option sprang up they would lose that.

If India signs up for TAPI, knowingly India will be funding attacks on its own civilians and security forces.

Before India can sign up for TAPi there has to be a change in their policy. Any attacks and it is us that walks. This means everyone up the line loses.

You say it's upto them to decide. Well, the terrorist Army have kept a Superpower bogged down in Afghanistan since 2001. Any deal India makes via Pak, they keep us bogged down too. Pak doesn't care about transit fees, their Army makes much more money through the Karachi Stock Exchange, various business, narcotics smuggling, counterfeit currency racketeering, and so on and so forth.

The reason they don't care or want transit fees is their space to manouver shrinks. They know it will give us more undue influence over their actions because non compliance comes with costs. At this point they are more afraid of the deal than we are. They would see it as some sort of trap. Funny you think the same too : )

Explain how they will bog us down ? another way of phrasing it they will hold us to ransom.

I am talking about achievements, something like 1971.

Having said that, it would be very unsavoury to not give credit to the Vajpayee government for economic policies etc, of what I can remember. But, THE BIG STICK, only Indira raised, and beat Pak black and blue with it. Ask the Pakistanis, they still shriek in pain remembering 1971.

A little aside, ever wonder why the Bangla campaign only started in December ?

People say the Russians were keeping a check on the Chinese but the simple fact is in Dec all the mountain passes are frozen till at least March. Therefore there was no way for China to intervene into the NE to protect East Pakistan. I guess this is also why they wound up their little war with us by Nov end too.

[Oracle]

Mattis says Asian countries concerned about 'massive piling' of Chinese debt

[Double Edge]

Mattis says Asian countries concerned about 'massive piling' of Chinese debt

Beijing is different than Russia.

Russia wants security around its periphery by having insecurity with other nations. They want to veto authority over the economic, the diplomatic and the security decisions of the nations around them.

"China on the other hand seems to want some sort of tribute states around them. We are looking for how do we work with China," Mattis added.

That's the distinction.

[Double Edge]

Damage control from Beijing

Beijing engages with Pakistan's Uighurs in 'charm offensive' | Nikkei Asian | Oct 31 2018

China wants Pakistanis on its side to protect its massive Belt and Road investment

ADNAN AAMIR, Contributing writer
October 31, 2018 12:09 JST

QUETTA, Pakistan -- China is quietly launching a "charm offensive" to win over the Muslim Uighurs in Pakistan, where Beijing has invested billions of dollars through its Belt and Road Initiative.

In an unprecedented development, the Chinese embassy in Islamabad recently invited a group of Uighurs in the South Asian country to meet with officials. About a dozen Uighurs attended the meeting with Chinese diplomats, based on an image in a news release issued by the embassy.

Beijing has been accused by Western media of alleged human rights violations against Uighurs in China's Xinjiang autonomous region. The reports alleged that over a million Uighurs were detained in "re-education camps," which Chinese state media claimed were vocational training facilities.

At the meeting, the diplomats explained that the activities undertaken by Chinese authorities in Xinjiang were part of an "anti-terrorism stability" effort and "vocational skills education and training."

The press statement quoted Shen Zicheng, a counsellor at the Chinese embassy, as saying: "Xinjiang's anti-terrorism struggle has achieved significant results, and the current Xinjiang region is stable."

Uighur leaders from the Rawalpindi and Gilgit-Baltistan regions who attended the meeting appreciated the economic and social development in Xinjiang and the fruit of the anti-terrorism policies, the statement said.

The meeting is seen as Beijing's latest effort to quell the rise of anti-China sentiments abroad. Experts say Beijing targeted the Uighurs in Pakistan because of the country's importance to its BRI project.

Pakistan forms the heart of Chinese President Xi Jinping's signature BRI, with Beijing investing $62 billion in the China-Pakistan Economic Corridor. Started in April 2015, the CPEC project involves the construction of an estimated 3,000 km network of new roads, railways and gas pipelines, as well as multiple power plants in Pakistan. The plan includes connecting the Gwadar port in the south of Pakistan to Xinjiang autonomous territory in the northwest of China.

Michael Kugelman, deputy director South Asia at Wilson Center, a U.S.-based think tank, termed the embassy's move as China's "charm offensive." The meeting was intended to ease tensions with Uighurs in Pakistan and reduce the possibility of them launching attacks on Chinese targets.

In Pakistan where the dominant religion is Islam, the news reports of the incarceration of Uighurs in internment camps also puts China in a bad light.

Beijing has always regarded the Uighurs in Pakistan as a security threat, demanding Islamabad control them. In the past, China blamed the Uighurs in Pakistan for terrorist attacks in Xinjiang. In April this year, Pakistani authorities arrested dozens of Uighurs in the Gilgit-Baltistan region at Beijing's behest.

"Some four dozen Uighur fighters were operating in sensitive areas close to CPEC projects," said a Pakistani security official.

There are 400 to 500 armed Uighurs in the border area between Afghanistan and Pakistan, according to Abdul Basit, associate research fellow at RSIS Singapore, a think tank. China considers them a huge security threat, he said.

"Meeting with Uighurs was an attempt by China to ensure that they don't pick weapons against the People's Republic in Xinjiang," Basit said. "China can't afford anti-China sentiment among Uighurs in Pakistan and therefore it wants to engage them."

For Beijing, the meeting with Uighurs also marks a change to a softer stance of engagement. The policy shift, experts said, is to win over Pakistanis sympathetic to the Uighurs.

But the problem for Beijing is merely one of image for now because the official Pakistan line is still to shrug off the alleged human rights violation in Xinjiang. "Islamabad does not want to antagonize Beijing and risk aggravating a relationship with China that has grown increasingly important for Pakistan, particularly amid a deteriorating relationship with Washington," Kugelman said.

[Oracle]

Leverage ? how much do we have over them presently. This is a way to get some leverage and influence their actions.

All that money they control isn't enough to stop them seeking bailouts repeatedly from others. The question is what is the cost to them to continue down the present path. If a transit option sprang up they would lose that.

Before India can sign up for TAPi there has to be a change in their policy. Any attacks and it is us that walks. This means everyone up the line loses.

The reason they don't care or want transit fees is their space to manouver shrinks. They know it will give us more undue influence over their actions because non compliance comes with costs. At this point they are more afraid of the deal than we are. They would see it as some sort of trap. Funny you think the same too : )

Explain how they will bog us down ? another way of phrasing it they will hold us to ransom.

A little aside, ever wonder why the Bangla campaign only started in December ?

People say the Russians were keeping a check on the Chinese but the simple fact is in Dec all the mountain passes are frozen till at least March. Therefore there was no way for China to intervene into the NE to protect East Pakistan. I guess this is also why they wound up their little war with us by Nov end too.

You've answered everything. Deep down, you know what lies in store if this project goes ahead. You're suspicious like I am, knowing fully well the duplicit nature of the Pakistan Army. That small ray of hope, that sometimes creep in into your posts vis-a-vis Pak, is what my hope is regarding the ordinary/hard-working citizens of Pak, but that is not enough. Pak is run by zealots in Army fatigues, hidden behind it is their hate for a Hindu India, huge monetary gains, and a luxurious life for them and their wards.

In a different context, there is a chance of the rise of proxies till, say, 2030, to target specific countries, so that geo-strategic goals are achieved. Cutting some countries to size, hitting the bank accounts of others.

[Oracle]

Maldives set to pull out of China free trade deal, says senior lawmaker

Bangladesh avoids Chinese debt trap, building biggest bridge with own funds

[Double Edge]

An earlier article abut the maldives

How an island nation’s new leaders are trying to unravel a web of secret deals with China | LA Times | Nov 06 2018

By SHASHANK BENGALI NOV 06, 2018

Fresh off his surprise election victory in the Maldives, President-elect Ibrahim Mohamed Solih had a warning for his economic team. The island nation had racked up huge debts to China during an unchecked, five-year building spree by the autocrat he had just defeated.

“Be prepared for it to be worse than we think,” one advisor recalled Solih saying.

He was right. Soon after the Sept. 23 election, Solih met the Chinese ambassador and learned that the Maldives owed the Chinese government not $1.5 billion, as had been widely estimated, but nearly $3 billion.

That’s more revenue than the Maldivian government raises in two years — a staggering figure that makes the diffuse island chain a prime example of how Chinese loans have swamped smaller economies.

As Beijing has pursued a mammoth infrastructure-building program spanning dozens of countries, it found perhaps its most pliant partner in the president of the Maldives, Abdulla Yameen Abdul Gayoom, who silenced opposition and shrugged off corruption allegations while steering his country firmly into China’s orbit.

With minimal oversight, Yameen leased an island near the capital to Beijing at a cut-rate price and invited Chinese state-owned developers to build a mile-long bridge, thousands of apartments and a new runway, fuel farm and passenger terminal at the main international airport.

It was more construction, more quickly, than had ever been seen in this Indian Ocean archipelago of fewer than half a million people. And nearly all of it was done under secret terms, without other bids and at inflated prices that raised questions of graft, according to people with knowledge of the contracts.

Details of the debt — and how much might have been stolen — will only begin to emerge after Solih takes office Nov. 17 and his aides gain complete access to documents that Yameen’s government hid from lawmakers and the public.

But information already collected by Solih’s transition team indicates that the liabilities are greater than initially believed and will soon outpace the islands’ ability to pay.

“We have to find out exactly what happened, because nobody really knows,” said Ahmed Naseem, a former Maldivian foreign minister. “It’s a huge amount of money, and we need China’s help to get to the bottom of it.”

The Maldives offers one of the starkest examples of the scope of the Belt and Road Initiative, Chinese President Xi Jinping’s multi-trillion-dollar effort to build transport, energy and communications links across nearly 70 countries.

China bills it as friendly development assistance. But critics say that the bridges, highways, power plants and ports are mainly designed to further China’s diplomatic and security objectives, and that poorer countries could be forced to surrender land or other resources as collateral.

In several Asian countries, concern over Chinese debt has become a political issue as newly elected governments search for ways out of deals struck by predecessors.

This year, Malaysia’s new prime minister canceled two projects worth $22 billion. Pakistan — where $60 billion in Chinese-funded infrastructure is planned, the most of any country — is trying to delay or revisit some projects.

The scenario that most worries leaders in the Maldives is what happened in nearby Sri Lanka, which tried to renegotiate loan payment schedules but failed — and last year ceded a port on its southern coast to China under a 99-year lease.

The Maldives consists of 1,192 palm-fringed coral islands, most of which are uninhabited, with about 120 developed for high-end hotels. Yameen’s government changed a law to allow islands to be leased to tourism companies in closed bidding, paving the way for dozens more unpopulated islands to be turned into resorts.

At least seven islands went to Chinese companies, according to a foreign official in the region who was briefed on the plans. One island a short speedboat ride from Male, the capital, was leased to a Chinese developer for $4 million for 50 years — far below market value.

“I don’t think anyone should view what Chinese companies have done in the Maldives or anywhere else as development assistance or commercial arrangements,” said former Maldivian President Mohamed Nasheed. “This is a land grab.”

Nasheed, the father of Maldives’ multi-party democracy and a close friend of Solih, returned this month after 2½ years in exile during which he became a vocal critic of China. Stung by the backlash against Xi’s signature initiative, Beijing recently lashed out at Nasheed for “irresponsible remarks” and said its relationship with the Maldives would continue “on the basis of equality and mutual benefit.”

But the Maldives is now dependent on China in a way few could have imagined.

Eight years ago, Beijing didn’t even have an embassy here. Now China accounts for one-quarter of the Maldives’ foreign tourists and some two-thirds of its external debt. It has become one of the islands’ main sources of imports, on par with longtime trading partner India.

“China has opened the tap, and if they decide to close it, that would be horrifying for the Maldives,” said the foreign official, who requested anonymity under diplomatic protocol.

The growing relationship has most alarmed South Asia’s biggest power, India, which worries that China is attempting to establish a permanent presence on its doorstep.

Last year, Yameen pushed through parliament a free trade agreement with China that makes explicit reference to “provisioning a military establishment” and nuclear materials. Indian officials speculated that Beijing could deploy a nuclear submarine.

A few months later, China denied a report in the Indian news media that a marine observatory it was developing in the northern atoll of Makunudhoo — 250 miles from Indian shores, along a key shipping lane between Asia and the Middle East — would be used for military purposes.

Eager to ratchet down the tensions, Solih’s incoming administration has told the Indian government it plans to examine that lease and those involving other islands.

“I don’t know the purpose for it but I believe this arrangement has to be carefully looked into,” said Naseem, the ex-foreign minister. “Maldives cannot be the center of a cold war in the Indian Ocean.”

Solih has also pledged to investigate whether Yameen and cronies profited from foreign deals.

In 2014, a government audit found that tens of millions of dollars in tourism revenue had been diverted to private accounts belonging to Yameen’s vice president and others. Yameen denied wrongdoing and jailed the vice president. The auditor lost his job and went into exile.

The soaring costs of Chinese-backed projects have made them a focus of corruption allegations.

Five years ago, plans for a mile-long, six-lane bridge connecting Male with the airport put the cost at about $100 million. Under Yameen, the bridge was narrowed to four lanes but the cost jumped to nearly $200 million, more than two-thirds of which was covered by a loan from China’s Export-Import Bank.

In the airport renovation, Yameen’s predecessor in 2012 abruptly canceled a $500-million contract with an Indian company, GMR. After an arbitrator ordered the Maldives to pay GMR $271 million in damages, Yameen raised cash by issuing a $200-million sovereign bond last year through BoCom, a Chinese investment bank.

By then, the cost of the airport expansion had doubled to $1 billion. Yameen’s government brought in a new developer to start work: China’s Beijing Urban Construction Group.

Solih said in an interview that he would consider asking the FBI and other U.S. agencies to help trace missing funds and unravel contract details. A senior State Department official said the U.S. government was “prepared to help them in any way.”

Solih’s aides are still trying to determine whether debt to China could rise beyond $3 billion. The Maldives’ government backed some loans with sovereign guarantees, meaning the recipient assumes liability if projects flop.

One guarantee, worth $370 million, was issued last year for the construction of 7,000 public housing units on reclaimed land north of Male, where more than 140,000 people are squeezed into two square miles.

But the state-owned Maldivian developer is close to bankruptcy. Last month the government had to inject $24 million to prop up the company, raising questions about the project’s viability and the Maldives’ ability to repay the loan.

“We will have to talk to China — not necessarily about canceling deals, because we need development, but about renegotiation,” Naseem said. “We can’t pay something that is ridiculous. We can’t give them our blood, can we?”

[Double Edge]

An earlier article abut the maldives

How an island nation’s new leaders are trying to unravel a web of secret deals with China | LA Times | Nov 06 2018

By SHASHANK BENGALI NOV 06, 2018

Fresh off his surprise election victory in the Maldives, President-elect Ibrahim Mohamed Solih had a warning for his economic team. The island nation had racked up huge debts to China during an unchecked, five-year building spree by the autocrat he had just defeated.

“Be prepared for it to be worse than we think,” one advisor recalled Solih saying.

He was right. Soon after the Sept. 23 election, Solih met the Chinese ambassador and learned that the Maldives owed the Chinese government not $1.5 billion, as had been widely estimated, but nearly $3 billion.

That’s more revenue than the Maldivian government raises in two years — a staggering figure that makes the diffuse island chain a prime example of how Chinese loans have swamped smaller economies.

As Beijing has pursued a mammoth infrastructure-building program spanning dozens of countries, it found perhaps its most pliant partner in the president of the Maldives, Abdulla Yameen Abdul Gayoom, who silenced opposition and shrugged off corruption allegations while steering his country firmly into China’s orbit.

With minimal oversight, Yameen leased an island near the capital to Beijing at a cut-rate price and invited Chinese state-owned developers to build a mile-long bridge, thousands of apartments and a new runway, fuel farm and passenger terminal at the main international airport.

It was more construction, more quickly, than had ever been seen in this Indian Ocean archipelago of fewer than half a million people. And nearly all of it was done under secret terms, without other bids and at inflated prices that raised questions of graft, according to people with knowledge of the contracts.

Details of the debt — and how much might have been stolen — will only begin to emerge after Solih takes office Nov. 17 and his aides gain complete access to documents that Yameen’s government hid from lawmakers and the public.

But information already collected by Solih’s transition team indicates that the liabilities are greater than initially believed and will soon outpace the islands’ ability to pay.

“We have to find out exactly what happened, because nobody really knows,” said Ahmed Naseem, a former Maldivian foreign minister. “It’s a huge amount of money, and we need China’s help to get to the bottom of it.”

The Maldives offers one of the starkest examples of the scope of the Belt and Road Initiative, Chinese President Xi Jinping’s multi-trillion-dollar effort to build transport, energy and communications links across nearly 70 countries.

China bills it as friendly development assistance. But critics say that the bridges, highways, power plants and ports are mainly designed to further China’s diplomatic and security objectives, and that poorer countries could be forced to surrender land or other resources as collateral.

In several Asian countries, concern over Chinese debt has become a political issue as newly elected governments search for ways out of deals struck by predecessors.

This year, Malaysia’s new prime minister canceled two projects worth $22 billion. Pakistan — where $60 billion in Chinese-funded infrastructure is planned, the most of any country — is trying to delay or revisit some projects.

The scenario that most worries leaders in the Maldives is what happened in nearby Sri Lanka, which tried to renegotiate loan payment schedules but failed — and last year ceded a port on its southern coast to China under a 99-year lease.

The Maldives consists of 1,192 palm-fringed coral islands, most of which are uninhabited, with about 120 developed for high-end hotels. Yameen’s government changed a law to allow islands to be leased to tourism companies in closed bidding, paving the way for dozens more unpopulated islands to be turned into resorts.

At least seven islands went to Chinese companies, according to a foreign official in the region who was briefed on the plans. One island a short speedboat ride from Male, the capital, was leased to a Chinese developer for $4 million for 50 years — far below market value.

“I don’t think anyone should view what Chinese companies have done in the Maldives or anywhere else as development assistance or commercial arrangements,” said former Maldivian President Mohamed Nasheed. “This is a land grab.”

Nasheed, the father of Maldives’ multi-party democracy and a close friend of Solih, returned this month after 2½ years in exile during which he became a vocal critic of China. Stung by the backlash against Xi’s signature initiative, Beijing recently lashed out at Nasheed for “irresponsible remarks” and said its relationship with the Maldives would continue “on the basis of equality and mutual benefit.”

But the Maldives is now dependent on China in a way few could have imagined.

Eight years ago, Beijing didn’t even have an embassy here. Now China accounts for one-quarter of the Maldives’ foreign tourists and some two-thirds of its external debt. It has become one of the islands’ main sources of imports, on par with longtime trading partner India.

“China has opened the tap, and if they decide to close it, that would be horrifying for the Maldives,” said the foreign official, who requested anonymity under diplomatic protocol.

The growing relationship has most alarmed South Asia’s biggest power, India, which worries that China is attempting to establish a permanent presence on its doorstep.

Last year, Yameen pushed through parliament a free trade agreement with China that makes explicit reference to “provisioning a military establishment” and nuclear materials. Indian officials speculated that Beijing could deploy a nuclear submarine.

A few months later, China denied a report in the Indian news media that a marine observatory it was developing in the northern atoll of Makunudhoo — 250 miles from Indian shores, along a key shipping lane between Asia and the Middle East — would be used for military purposes.

Eager to ratchet down the tensions, Solih’s incoming administration has told the Indian government it plans to examine that lease and those involving other islands.

“I don’t know the purpose for it but I believe this arrangement has to be carefully looked into,” said Naseem, the ex-foreign minister. “Maldives cannot be the center of a cold war in the Indian Ocean.”

Solih has also pledged to investigate whether Yameen and cronies profited from foreign deals.

In 2014, a government audit found that tens of millions of dollars in tourism revenue had been diverted to private accounts belonging to Yameen’s vice president and others. Yameen denied wrongdoing and jailed the vice president. The auditor lost his job and went into exile.

The soaring costs of Chinese-backed projects have made them a focus of corruption allegations.

Five years ago, plans for a mile-long, six-lane bridge connecting Male with the airport put the cost at about $100 million. Under Yameen, the bridge was narrowed to four lanes but the cost jumped to nearly $200 million, more than two-thirds of which was covered by a loan from China’s Export-Import Bank.

In the airport renovation, Yameen’s predecessor in 2012 abruptly canceled a $500-million contract with an Indian company, GMR. After an arbitrator ordered the Maldives to pay GMR $271 million in damages, Yameen raised cash by issuing a $200-million sovereign bond last year through BoCom, a Chinese investment bank.

By then, the cost of the airport expansion had doubled to $1 billion. Yameen’s government brought in a new developer to start work: China’s Beijing Urban Construction Group.

Solih said in an interview that he would consider asking the FBI and other U.S. agencies to help trace missing funds and unravel contract details. A senior State Department official said the U.S. government was “prepared to help them in any way.”

Solih’s aides are still trying to determine whether debt to China could rise beyond $3 billion. The Maldives’ government backed some loans with sovereign guarantees, meaning the recipient assumes liability if projects flop.

One guarantee, worth $370 million, was issued last year for the construction of 7,000 public housing units on reclaimed land north of Male, where more than 140,000 people are squeezed into two square miles.

But the state-owned Maldivian developer is close to bankruptcy. Last month the government had to inject $24 million to prop up the company, raising questions about the project’s viability and the Maldives’ ability to repay the loan.

“We will have to talk to China — not necessarily about canceling deals, because we need development, but about renegotiation,” Naseem said. “We can’t pay something that is ridiculous. We can’t give them our blood, can we?”

[Oracle]

Maldives says China is building projects at inflated prices