CEPEC opponent is not a friend of Pakistan

The recent closeness between Pakistan and the United States has been
witnessing a surge in proximity, a signal that was met during a meeting
between US President Trump and Prime Minister Imran Khan on the occasion
of the World Economic Forum yesterday when the US president did not meet
Imran Khan. Not just his best friend, but also claiming that "Pakistan-US
relations are as close today as never before."
Trump's admirable words proudly widened the hearts of the delegates who
accompanied Imran Khan, and the Prime Minister requested the US president
to play a role in mediating Kashmir, knowing that Pakistan would never Has
also requested the United States to mediate on the Kashmir issue, the
results have not been good.
In the minds of the Pakistani people, the memories of a meeting between the
US President and Imran Khan in the United States a few months ago are still
fresh, in which the US President offered mediation on the Kashmir issue,
leading to the impression that the Kashmir issue was in Pakistan. The
solution is going to be resolved, but later on, India abolished the special
status of Kashmir and broke the mountain of oppression on the oppressed
Kashmiri’s and it is not possible that India did not trust the US while doing so.
Today the Kashmir issue remains unaffected, while the US President is giving
Pakistan the issue of mediation and red tape over Kashmir once again to
assure US friendship with Pakistan and to accept the American terms on the
CEPEC.
Indications of this American ambition were found when US Deputy Foreign
Minister Alice Wells, on a recent visit to Pakistan, once again criticized the
Pak-China friendship manifesto CEPEC, alleging that there was no
transparency in the CEPEC project and Pakistan. In the name of CEPEC,
China's debt-trapped debt trap is getting worse, while Chinese companies
that are blacklisted by the World Bank.
Worked on the CEPEC project in Pakistan. This is not the first time, but a few

months ago, Alice Wells criticized CEPEC and China, but China's ambassador

to Pakistan rejected Alice Wells' statement in her stern response, saying that

all those involved in CEPEC Chinese companies are internationally

recognized.

He said that the United States calls Pakistan its friend and ally, but he would

tell us what role the US played in Pakistan's present difficult situation.

The United States and its allies have been opposed to the CEPEC since its
inception, which has been trying to prevent the CEPEC from reaching its final
stages, but now they have openly opposed the plan and Ellis Wells. A recent
statement from Washington shows how upset the CEPEC is in Washington
The United States has also been claiming that China is trapping Pakistan in
debt, but the fact is that according to State Bank of Pakistan data, the
country's total external debt is US $ 110 billion and the IMF and the Paris
club, among others. World financial institutions are the top lenders to
Pakistan.
According to the State Bank, China's total debt to CEPEC is US $ 5.8 billion,
which is 5.3 % of Pakistan's total debt and Pakistan's GDP is expected to rise
2 % after the completion of the CEPEC . Instead of blaming others, we should
look at our own poor. After the present government came to power, there
were some indications that the government wanted to slow the pack. This
government's intention was strengthened when Adviser Commerce Abdul
Razzaq Dawood's statement came out in which he expressly expressed his
concerns about the CEPEC, saying that "the CEPEC project will be reviewed
and it will be reviewed. Slowdown will be done ".
Following this government statement, Pakistan-China relations have
witnessed a cold wave, but seeing the plight of the situation, Army Chief
General Qamar Javed Bajwa visited China and assured the Chinese
leadership to complete the CEPEC project. The rent was definitely a positive
step.
Not only does the CEPEC project matter to the majority of Pakistanis, but
they are hopeful that the "Special Economic Zones" attached to the CEPEC
will provide employment opportunities to millions of Pakistanis in the Chinese
investment industry. That is why it is unacceptable for Pakistanis to condemn
the United States in strict words.
The reason the US president has shown his proximity to Pakistan in recent
times is that he does not want Pakistan to be cold-blooded in its relations
with China and refrain from the CEPEC.
If the US President shows the same kind of proximity to Pakistan and Imran
Khan, then they should give real proof of that. The government should ask
the US to lift the curfew from Kashmir-occupied Kashmir, support the FATF,
end travel advisory sanctions and stop interrupting the pack.
The friendship between Pakistan and China is decades old and Pakistan can
never betray its tried friend for the sake of American happiness. Good
relations with the United States are also an important requirement of the
time, but we must not forget that the opposition to the CEPEC can never be a
friend of Pakistan.

Chinese embassy clarifies false report on CPEC

debt
The Embassy of China in Pakistan has taken note of a recent report by a Pakistani journalist, in which he claimed
that Pakistan will repay $40 billion debt to China under China-Pakistan Economic Corridor (CPEC).

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This number of $ 40 billion is wrong and misleading. The Ministry of Planning has issued a statement for clarification.
The embassy would like to further clarify as below:

The CPEC is a major and important economic cooperation project between China and Pakistan. All CPEC projects
are based on consensus of the two countries, and fully comply with relevant laws and regulations. Currently, 22 early
harvest projects under the CPEC have been completed or are under construction, with a total investment of $ 18.9
billion.
These projects aim at resolving two major bottlenecks hindering economic development of Pakistan, namely lack of
transportation infrastructure and energy shortage.

The Chinese government provided concessional loans of $5.874 billion for Pakistan government’s major
transportation infrastructure projects, with a composite interest rate of around 2% in repayment period of 20-25 years.
The Pakistani government provides sovereign guarantee for the above loans and will start the repayment from 2021.

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The Chinese companies and their partners invested$12.8 billion in energy projects in Pakistan. Among them,
Chinese companies provide $3 billion from their own equity. The rest $9.8 billion is raised from commercial banks
with interest rate of about 5 percent.

The repayment period is 12-18 years. All the CPEC energy projects are investment in nature, which is purely
independent business behavior of these companies.

The companies are responsible for their own profits and losses and repayment of loans. The Pakistani government
does not repay these loans under CPEC. The business cooperation between the two sides is in full compliance with
internationally accepted business practice.

The Chinese government provides interest-free loans for Expressway East Bay in Gwadar. The Chinese government
provides grant for some livelihood projects.

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Remarks
Pakistan government provided funding for the feasibility study of ML-1 upgradation.

Pakistan will repay only $ 6.017 billion (Category I $ 5.874 billion and Category III $ 0.143 billion) and their interests
to China. China and Pakistan are discussing how to use Chinese grant to implement new projects such as new
Gwadar international airport, Gwadar vocational training center and friendship hospital, etc. Once the financial details
are available, they will be shared.

During Prime Minister Imran Khan’s visit to China in November 2018, the two sides reaffirmed their commitment to
CPEC and agreed to ensure the normal operation of the completed projects and the smooth completion of the on-
going projects.

The two sides also agreed to consult with each other on the future path and direction of CPEC, taking consideration
of Pakistan’s priority of economic and social development and the demand of Pakistani people.

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On December 20th2018, China and Pakistan successfully held the 8thJCC meeting of CPEC in Beijing and decided
to set up a social economic joint working group under CPEC.

The Chinese side will provide more support to the people's livelihood projects such as education, agriculture, poverty
alleviation, health care and vocational training. Both sides signed MoU on industrial cooperation, and agreed to jointly
promote the construction of Special Economic Zones. The CPEC has entered a new phase of broadening and
expansion in the next 5 years.

The Chinese embassy appreciates the Pakistani people for their support on CPEC and welcomes the supervision
from all works of life.
Chinese Embassy Slams US’s
Statement Against CPEC
Chinese Embassy Slams
US’s Statement Against
CPEC
Posted 6 days ago by Jehangir Nasir
 



The Chinese Embassy in Pakistan has categorically rejected the senior US diplomat Alice Wells’ negative
rhetoric against China Pakistan Economic Corridor (CPEC), call it a pack of lies.

Ambassador Wells, who was on a four-day visit to Pakistan, told a select gathering that CPEC projects lacked
transparency and suffered from corruption.

She claimed that there is no transparency in CPEC projects and Pakistan’s debt burden is growing due to the
Chinese financing.

“Despite repeated rejections, the US side still ignores the facts and is obsessed with the story is made for the
CPEC,” according to a press release issued by the Chinese embassy.

Although you can never wake up a person who is pretending to be asleep, we have to make our position clear
and reject the negative propaganda by the US. We must not let the truth be distorted and the lies run wild.
The US ambassador also touched on the cost escalation in the railways ML-1 upgrade project and said the
Chinese companies joining CPEC were in World Bank’s blacklist. ”We would be more than glad to see the US
develop its relationship with Pakistan, but we strongly oppose the US interferes into China-Pakistan relations
and the CPEC,” the press release added.

It said that the US held the stick of sanctions all over the world, blacklisting this and that country but not for
the global economy, these are just ways to serve its own political purpose.

We also want to advise the US that when you accuse China-Pakistan relations, you should first look back on
what have you done to Pakistan, and think about how much contribution have you make for Pakistan. Did Ms.
Wales bring any aid, investment or trade for Pakistan during her visit? If the US truly cares about the
development and prosperity of Pakistan and this region, it should bring cash and funds, promote win-win
cooperation on the basis of mutual respect, fairness, and justice, rather than act as a world policeman,
spreading rumors and provoking China-Pakistan relations.
The press release further stated that China-Pakistan ties are rock-solid and unbreakable and China will
continue to work with the Pakistani government and the people to steadily advance BRI and CPEC to promote
regional peace and development.

It said that the 32 early-harvest CPEC projects completed over the past five years have significantly improved
local transportation infrastructure and power supply, created over 75,000 jobs directly and contributed one to
two percent of the GDP growth in Pakistan. It shows that the CPEC is playing an important role in boosting
Pakistan’s socio-economic development and improving people’s livelihood, the embassy added.

Whether the CPEC works, the answer should be given by the Pakistani people rather than the US. Under the
CPEC, during its planning or implementation, every project is equally discussed, carefully studied and jointly
implemented by both China and Pakistan. The Chinese government always requests the Chinese companies to
operate according to local laws and regulations. All Chinese companies joining the CPEC enjoy an
international reputation. All projects strictly follow the market-oriented and internationally accepted business
model, adopt state of the art technology and strict environmental protection standards. The entire process is
open and transparent and is in line with international norms. We keep in touch with the relative accountability
agencies of Pakistan and it is agreed that the CPEC is clean.
Regarding the so-called debt issue, according to statistics from the State Bank of Pakistan, the total foreign
debt of Pakistan is $110 billion. In fact, international financial institutions including the Paris Club and
International Monetary Fund (IMF) are the largest creditors of Pakistan.

CPEC’s share is about $5.8 billion or 5.3 percent of the total foreign debt, accounting for 5.3% of Pakistan’s
total foreign debt, with a repayment period of 20-25 years and an interest rate of approximately 2%. Its
repayments will start in 2021, with annual repayments of about $300 million, which will not be a burden to
Pakistan.

Moreover, China has never forced other countries to pay debts, and will not make unreasonable demands on
Pakistan, said the statement.

The US keeps fabricating the so-called debt story, their mathematics is bad, and their intention is worse. As to
the cost of the ML-1 project, we have said many times.
ML-1 project
About the cost escalation of the ML-1 project, the initial design of the project was jointly accomplished by the
China Railway No 2 Bureau, National Engineering Services Pakistan Limited (NESPAK), and Pakistan
Railway Advisory & Consultancy Services Ltd (PRACS). The project was launched in 2016, and the initial
design was submitted in May 2017.

In April 2019, it successfully passed the initial design review organized by Pakistan Railways (PR), done by
Mott McDonald Pakistan (MMP), Canarail and Crimson.

“As the project has not yet been approved, the amounts of the project will be adjusted according to the actual
condition and the needs of Pakistan. After finalizing the design of the project, we would initiate bidding in
accordance with international practice. This is a completely normal business practice,” the embassy added

USA’s odd attacks on CPEC

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Senator Rehman Malik

November 26, 2019
It is evident that USA and India have been propagating against China Pakistan Economic Corridor (CPEC) from the
day one hence, this latest negative statement on CPEC should not be a surprise rather we should expect some more
adverse moves from them on this economic corridor. India propagates that this project is against the Indian interests
that is why it has been sending numerous operators of its intelligence agency the Research and Analysis Wing
(RAW) to Pakistan to inflect and sabotage this project. CPEC project has been pinching Washington right from the
day one and the most recent statements are looking some of kind preamble of the ill intentions of USA against this
future economic lifeline of Pakistan.

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I have question from USA and India that when Pakistan never questioned USA huge investment in IT parks, Defense
industries, Call centers gateways and even a satellite launched in the name of weather forecasting in India, the same
satellite which is being used for spying from this region then why they are always putting their nose into Pakistan’s
internal affairs. I hope that USA refrains from criticizing CPEC now which has nothing to do with them as it is our
project with China.

The arrest and confessional statement of RAW agent Kulbhushan Yadav is a living testimony to their ill motives as he
was assigned to sabotage the CPEC through creating instability in Balochistan as well as in Karachi by none but
terrorist activities. It was no one else but US President Donald Trump himself who stated against CPEC saying: “One
Belt One Road is not acceptable to USA”.

Let me first negate what has been stated by ill-informed spokesperson of USA regarding the loan load because of
CPEC. Here is the factual position of loans and investment for the information of American spokesperson to read and
withdraw her statement.

According to the latest situation there is total amount of $ 19 Billion ($6-billion is Chinese government soft loan and
approximately $13 billion FDI) have been spent on twenty-two early harvesting projects. Moreover, the government of
Pakistan only have to pay 6 billion USD as a soft loan of the total amount of the project whereas the rest is regarded
and declared as foreign direct investment through various Chinese companies. Chinese government soft loan is for
the CPEC projects accounted for only 6.3% of Pakistan’s total foreign debt that is approx. $100 billion. Of all the
CPEC projects, only KKH phase-II, Karachi-Lahore motorway (Sukkur-Multan), Orange line and laying of optical fiber
cable used the Chinese government soft loan of approx. 6 billion USD which is being named as heavy burden by US.
It is unfortunate to see that USA has now begun to see Pakistan with Indian and Afghani eyes. These two eyes are
misleading for USA and USA continues to hit Pakistan with different unverified allegations.

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The most recent USA country report is basically another highly negative report to be used in FATF against Pakistan
where USA has been complainant against Pak in FATF but it should have not written such a biased report at this
point of time. It is ethically wrong to start doing the fake propaganda when the matter of both parties is pending & still
proceeding in FATF.

It is strange to note that Pakistan always stood for USA whereas USA betrays us every time. Mr. USA, We in fact,
made a huge blunder to have jumped into Afghan Jihad War against Soviet Union for your sake as Mr. William J.
Casey the then director of CIA had a meeting with Gen Zia ul Haq to ask for our help which resulted into strong
Pakistani support to USA. It is wrong on our part that we Pakistanis still have not learnt a lesson from Afghan war
sufferings and yet could not resist the pressure of USA post 9/11 where neither our soil was used nor any Pakistani
was found in the said terrorist attack.
I foresee the ill intentions of USA and India behind their statements as yet another statement has been issued that
USA will follow the peace policy of Afghan and Indian Governments. We must be ready to see more propaganda by
USA as it may further plant fake allegations involving some projects of CPEC. It is likely that USA might drag CPEC
as well into to FATF and try to invent yet some conspiracy to inflict Pakistan.

Following the US statement on CPEC, I hope the Government of Pakistan will take some sensible, pragmatic and
evidence based counter measures before the FATF with the help of China to negate the false allegations of USA. It is
highly encouraging to note that China has already warned member states including USA not to politicize FATF and
not to use FATF forum against Pakistan. China has clearly advocated that “China does not want the FATF to be
politicized by any single country”. This statement has not been liked by the White House resulting into the new
statement against CPEC two days back.

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Let us not ignore this aspect that USA might drag China either in UNSC or FATF with some kind of fabricated
charges. The world also knows who is sponsoring the continued trouble in Hong Kong, support of Taiwan against
China and numerous intrigues via Tibet. I am sure the solid Sino Pak friend ship will defeat all such USA - Indian
attacks against CPEC.

Note: Opinions expressed are solely my own and not necessarily reflect the views or opinions of my party.

Ambassador Wells’ Remarks on the “China-Pakistan Economic Corridor”

Home | News & Events | Ambassador Wells’ Remarks on the “China-Pakistan Economic Corridor”
Location: The Wilson Center, Washington DC

Date: November 21, 2019

We are delighted to welcome to the Wilson Center Ambassador Alice Wells, the Principal Deputy Assistant Secretary
of State for South and Central Asia at the U.S. Department of State.  Ambassador Wells is here to speak about
China’s Belt and Road Initiative, or BRI, and particularly the Pakistan component of BRI, the China-Pakistan Economic
Corridor or CPEC.

CPEC is significant for a number of reasons.  It involves two countries that figure prominently in U.S. strategic
thinking.  It is one of the more operationalized components of the wider BRI enterprise with a number of new projects
having been launched.  It is also a case of one of America’s top strategic rivals, expanding its investments and
influence in a country where Washington is arguably less present and less popular.

At the same time, CEPC is also a high stakes risk for China and Pakistan given very real concerns about financing and
transparency among other things. 

Just a very quick word about the Wilson Center.  The Wilson Center was chartered by Congress in 1968 as the official
memorial to President Woodrow Wilson.  We are the nation’s key non-partisan policy forum for tackling global issues
through independent research and open dialogue to inform actionable ideas for the policy community, and we seek to
bridge the gap between policy and academia in honor of Woodrow Wilson, the only U.S. President to have held a PhD
— a piece of trivia I’m sure that you all knew.

Moderator:  Thank you, Michael.

This is a pleasure I’ve been waiting a long time to have, but I knew it was coming sooner or later.  It’s to introduce
Alice Wells who is now I think the Principal Deputy Assistant Secretary but she’s in charge of the South Asia and
Central Asia Bureau.  So I wanted to sort of make that clear.
I’ve known her since 1998, and after just a few minutes I thought, I’ll probably be introducing this lady sometime or
other in front of a large audience.  Before taking over the South and Central Asia Bureau, she’s been an Ambassador
to Jordan.  She’s had a number of jobs, I suppose you’ve got her biography so I don’t need to go over this very much,
but she had a number of jobs in Washington.  And she was, when I first met her, the star of our political section in
Islamabad, in the embassy in Islamabad in Pakistan.

But I know you didn’t want to hear much from me.  Alice, take over.

Ambassador Wells: 
I think that today there’s an important debate that’s putatively over models of development, but it’s really about
sovereignty and the freedom that nations can expect and that their citizens can enjoy.  And America’s position really
is unambiguous. 
Good governance, long term capacity building, and market policies are the factors that enable the private sector to
flourish and that are essential for sustained development growth.  And whether it’s Europe, Japan, Asian Tigers, India,
the U.S. approach to development has driven unprecedented economic expansion since the 2 nd World War, lifting
billions out of poverty.
In 1978 Deng Xiaoping announced his open-door policy, encouraging foreign firms to come to China for trade and
investment and implementing sweeping market-based reforms to attract foreign businesses.  And U.S., European and
Japanese companies answered that call and played a central role in the Chinese people’s remarkable economic
progress, bringing technology and expertise.  But perhaps most critically, they brought the rigors and demands of
operating in a rules-based global economy.

What we see today is the Chinese Communist Party promoting its own brand of development — the One Belt One
Road Initiative — or what President Xi has called “a project of the century”. 

Now that might in fact be the case, because just as in the Maldives and Sri Lanka, after four years of CPEC, people in
Pakistan are beginning to ask tough questions about what kind of deals their prior government struck with
Communist China and what Pakistan really gains.

Pakistan has a sovereign right to answer those questions for itself, but I want to make a few observations on cost,
debt, transparency and jobs.

On cost.  According to Pakistani government statistics, for each megawatt generated by a completed CPEC
thermal energy project, developers spent an estimated 1.5 million.  In comparison, the cost per megawatt of building
non-CPEC thermal plants is half of that, or 750 million.

Similarly, CPEC’s most expensive single project is upgrading the railway from Karachi to Peshawar.  When the project
was initially announced, the price was set at $8.2 billion.  In October of 2018, Pakistan’s Railway Minister announced
that they had negotiated the price down to $6.2 billion, a savings of $2 billion, and he explained, Pakistan’s a poor
country, we can’t afford the huge burden of these loans.  But recent media reports claim the price has now risen to $9
billion.  So why doesn’t the Pakistan public know the price for CPEC’s most expensive project or how it’s being
determined?

On debt.  What are the long-term effects in Pakistan of Chinese financing practices?  And what are the burdens
that have fallen on the new government to manage, now with an estimated $15 billion in debt to the Chinese
government and another $6.7 billion in Chinese commercial debt?  Because it’s clear, or it needs to be clear, that
CPEC is not about aid.  This is almost always the form of loans or other forms of financing, often non-concessional,
with sovereign guarantees, or guaranteed profits for Chinese state-owned enterprises that are repatriated to China.

Now together with non-CPEC Chinese debt payments, China’s going to take a growing toll on the Pakistan economy,
especially when the bulk of payments start to come due in the next four to six years.  Even if loan payments are
deferred, they’re going to hang over Pakistan’s economic development potential, hamstringing Prime Minister Khan’s
reform agenda.

On transparency, the lack of transparency can increase CPEC costs and foster corruption resulting in an even
heavier debt burden for Pakistan.

For example, last year a Pakistani Senate Committee Report expressed astonishment at what they called the
controlled bidding process for construction on the recently inaugurated Sukkur to Multan Motorway.  According to
the Committee, Beijing had allowed only three firms — all Chinese — to participate in that tender, while the entire
project was financed by a Chinese loan with the risk entirely borne by the people of Pakistan.

Now given the lack of transparency, that road project has unsurprisingly been the subject of corruption allegations
against officials from the previous government including accusations of cost inflation and misappropriation of
funds.  We know that Pakistan’s National Accountability Bureau has a number of CPEC-related investigations
ongoing.

The new Pakistani government prioritizes rooting out corruption, but the recently announced CPEC authority has
immunity from corruption prosecutions. 

Lastly, on jobs.  We hear the familiar Chinese catch phrase win/win cooperation and mutual benefit.  But really,
CPEC relies primarily on Chinese workers and supplies even amid rising unemployment in Pakistan.  And for these
projects, Chinese companies are importing materials and equipment from China rather than giving that business to
Pakistani companies which would actually create jobs for locals.

CPEC is even bringing in Chinese workers who earn money in Pakistan, take the wages back to China, leaving very
little in the local economy.

In 2018, Pakistan’s exports to China constituted $1.8 billion while Pakistan’s imports from China totaled $14.5 billion.

There is a different model.  The United States-Pakistan Business Development Partnership stands in contrast to
CPEC.  U.S. businesses strive to contribute to sustainable economic growth and U.S. government grants — and I
underscore grants — have developed Pakistan’s infrastructure and capacity in education, health, energy, agriculture
and law enforcement. 

Ambassador Wells:  I think there’s been a tendency to conflate CPEC with grant assistance rather than
understanding it to be the loans, and loans not at concessional rates, that it is.  So when you break down individual
projects, and again, I’m not questioning Pakistan’s need for infrastructure.  There is a crying need and remains a
crying need for infrastructure.  And when CPEC was negotiated in 2015 the government faced a severe energy crisis
and there as a priority placed on developing energy resources.
But I think what CPEC exemplifies is what happens when you delink investment and development from established
best practices and infrastructure development.  Because if you don’t have the right policy framework, if you haven’t
undertaken the necessary reforms, there are consequences to some of the development decisions.  Energy, coal,
electricity production plants can be built, but if distribution is not simultaneously reformed you’re producing for a
system that can’t carry the load and the government is still committed as a sovereign guarantee to pay for the cost of
energy that can’t be accessed by consumers.

So it’s the conundrum of development.  You have to get all the pieces right.  Individual projects done quickly and one-
off without the system that supports and integrates those infrastructure projects, they’re not going to be as
successful.
I guess what I would point to is that Pakistan is now in an IMF program.  A large and reform-oriented IMF program
that was precipitated in large part by the run on reserves and the lack of foreign currency reserves.

And there you see the double whammy of a CPEC project.  When, for instance, the Port Qasim electricity plant, I read
in the report 99 percent of the inputs came from China.  So the fact that Pakistan has imported all of the inputs for
these projects while repatriating profit to the Chinese peristatal has had an immediate impact.  So those statistics on
only 1.8 billion in exports to China and 14-plus imports from China reveal the immediate cost of CPEC.

I think there’s — we want China to be a responsible supporter and funder of infrastructure.  The Indo-Pacific region
alone requires 27 trillion in infrastructure investments by the year 2030.  No one country can do that.  We all need to
help work to ensure that countries have meaningful choices for sustainable and quality infrastructure.

And I guess what I think we all need to question and where we all need to push is, why isn’t China adopting
international standards?

Now the second Belt and Road Initiative, you saw President Xi under some pressure to demonstrate that they heard
the criticism on quality and lack of standards, but we still haven’t seen Chinese commitments to increased standards,
commitments to a green Belt and Road, implemented in practice.  There are just some simple things I would throw
out.

Why not adopt Paris Club standards?  Why not increase your concessional loans as well as incorporate grants as part
of your development assistance to lesser developed countries?  Why not abide by the infrastructure principles at the
G20 of which China obviously is a member, has adopted?  Why not be transparent?  Report your official lending to
other countries.

Right now neither the IMF nor any other multilateral organization truly knows the indebtedness of countries who are
involved in these One Belt One Road projects, and that creates its own risks and can have its own knock-on effect.

So the simple request is be a global good citizen.  Be transparent.  Adopt the high standards that G20 nations should
be promulgating.

Moderator:  Good.  I’m going to go to the audience in a few minutes, but I’m going to finish a couple of other
questions first, if you don’t mind.
The second question I had leading from what you said is, I mean I think the incentives for China to change its habits
are rather minimal right now, but maybe they’ll get better.  But wouldn’t it help if, and why is it that Pakistan and other
countries have been so open to Chinese, these Chinese investments without really investigating them?

And the second part is, it seems to me like American investors and other Western investors, other Asia-Pacific
investors for that matter, are missing a bet in Pakistan and other places.  But could that be because of Pakistan’s
reputation as a dangerous country?  Could it be because they’ve been through how many IMF programs?  A dozen at
least, and none of them have ever worked very well.  What do you think is holding the West back on trying to move in
on that?

Ambassador Wells:  We lead with our private sector.  If you look at the companies who are already very active in
Pakistan, they tend to be some of our largest and most well-known multinational companies who have a lot of
experience dealing with risk and can deal with exposures and uncertainties of a Pakistani market.
But what’s going to attract additional private investment is going to be the hard reforms that have to be implemented
to create rules of law, contract enforcement, dispute resolution, currency stabilization.
I think there’s a tendency to believe that Special Economic Zones might be the cure to difficulties in attracting
investors and I don’t think that’s our experience.  Our experience is demonstrating that the framework for doing
transparent business and predictable business is available.

So it’s sometimes harder to work with the Western model.  I as an American Ambassador don’t walk in with a state-
owned company and a financial package in hand.  Other countries can do that.

So I think what’s incumbent upon the United States and like-minded partners is that we work very hard to ensure that
countries have meaningful alternatives.  And you’ve seen that launched under the Trump administration through the
Indo-Pacific Strategy, for instance, where we are in the governance space and in the economic promotion and in
particular in trying to enhance energy markets and digital connectivity and infrastructure development.  We’re
providing more resources and more programs and technical assistance to countries, and at the same time working
with countries like India, Australia and Japan with whom we share principles and I think you’re starting to see a
difference.

I’m very proud, for instance, of our Millennium Challenge programs where in Nepal we are helping through over a 500-
million-dollar grant to create hydro-electricity and better roads and hydro-electricity that’s going to end up in a
transmission line between India and Nepal.  So enhancing regional connectivity, creating export markets, and it’s that
kind of thoughtful development.

We have another MCC that we’re launching soon in Sri Lanka that will undertake the same kind of nitty-gritty reforms
in land registration and motorway harmonization that will, we determine, you help unlock economic development.

So we have to do our work, and that involves working in closer partnership with our private sector, but we’re proud of
the fact that already the United States has almost a trillion dollars in Foreign Direct Investment in the Indo-Pacific and
over $1.5 trillion in bilateral trade.  So we’re very much a power in the Pacific.

Moderator:  And these days a billion is chump change, so I’m glad it’s a trillion.
One more question and then we’ll move to all the people out here.

This is a sort of, you mentioned a lot about the region, the South Asia region.  I went to another meeting yesterday
about Nepal where it turns out Nepal is trying to have a federal system installed and while the Chinese are pouring
money into the federal side without paying much attention to the other parts of the government.  I see in Bangladesh
that the Chinese are reputed to be pouring money in and they offered I think use of some of the seaports there to the
Chinese.  And I see Sri Lanka and others.  This economic diplomacy, basically this is what you were talking about in —
[blank spot on recording].

For example, take Nepal, maybe it will, the federal system won’t work.  Maybe they’ll be bribed to go back to a central
system which seems to me like China would like.  Who knows what will happen in Pakistan or Bangladesh? 
Bangladesh is already about as authoritarian as you can get.

In any case, that’s me editorializing, not you.

Do you think my worries about this has any real meaning?  Is it worth worrying about?

Ambassador Wells:  China’s obviously very active globally.  Belt and Road is a global initiative for China.  And in
the Indian Ocean region you have a strong Chinese presence and infrastructure projects.  But in a country like
Bangladesh, don’t lose sight of the fact that we’re the largest single foreign direct investor.  We are Bangladesh’s
largest export market.  We have, whether it’s through Chevron as the anchor to significant American investment,
there’s intense interest in American companies in expanding their footprint in Bangladesh.  We can do so using the
new tools of the Development Finance Corporation which are significantly more flexible than what was available
under OPIC.  It allows us to have equity investment to work with other development partners.
So we’re actively trying to see how we can collaborate more closely with Japan and with Australia and India, which is
also obviously a very active investor in Bangladesh.

So this is not, and sometimes it’s painted as if it’s a zero sum competition.  It’s not.  Again, $27 trillion in
infrastructure need that will not be met by one country.  So how do we ensure that developing countries can access
infrastructure investment that’s going to enhance their prosperity?

Our global good, what the United States created after World War II, was an economic system that really, truly lifted all
boats.  We have a stake in seeing that system sustained.  It’s been good for private sector.  Our companies have done
well.  We’ve benefited by being able to create jobs in the United States through our exports.  And the values that
undergird our private sector model of growth are values that we’re proud of.  Free, open, sovereign.

Moderator:  That’s very well said.

I think we’ll now move to the audience if anybody has questions out there.

Question:  Thank you so much.  My name is [Ariva Khalid].  I have been a member of the Parliament of Pakistan for
ten years.  So thank you very much.  Your vision and your approach, I really appreciate the way you told everything
very honestly, very straight forwardly.
We also have these concerns, what you said.  But my concern is, my question is very simple.  It’s just that, like I have
seen the problem of electricity.  I’ve seen the energy crisis, the gas crisis, and I have myself lived there when we had
no electricity for more than 12 hours and it’s not easy in a very hot country.

So you tell me a country which is, there are many people who are below poverty line.  So what do you think, I mean
what would they do if there is an impression that oh, that’s a bad country to go and work, and once they bend towards
China for whatever they offer, they have many questions.

This is my question, why America is not participating, even in CPEC?  They can also come and join hands in the
companies and for the next phase, they can play their role which I think Pakistanis would really welcome.  That’s my
question.  Thank you.

Ambassador Wells:  Thank you.

I agree, again, countries are driven because they need infrastructure and they have urgent needs for infrastructure,
and you certainly saw that in Pakistan with the energy crisis.  That’s why America was involved in helping to support
the 3200 megawatts that were added to the grid.  But ultimately the quickest fix isn’t necessarily going to be the
wisest fix over the longer term.  Building energy, building electricity production plants without addressing distribution
grids, without addressing the pricing structure and the subsidy structure, you know, leaves Pakistan with a circular
debt that is very much the focus of this IMF program.  And so we would encourage that the right policy environment
be developed and the right regulatory frameworks be introduced.  In which case you really unlock a multitude of
investors who want to come to Pakistan.

Whether it’s the ExxonMobils or the Accelerate or others that have a track record already in Pakistan, there is intense
interest in energy development throughout South Asia.

So don’t think that the private sector isn’t motivated to come, but they’re going to be looking for that commitment to
overarching reform as well.

GE is a company that has been I think our most successful company in partnering in some CPEC projects in part
because they bring to the table turbines for which there are few competitors.  And so they have found Chinese
partners that they have worked together on projects that meet international standards, that are transparent, that
uphold the principles that GE and American firms stand for.  And I always like to point out, in Nepal, for instance,
there’s a U.S.-Chinese joint project to drill a tunnel.  We are perfectly capable of working together with Chinese
companies in transparent projects, transparently, competitive bid that meet standards.  This is a question about
standards.

I guess the one additional element I would put, or the one question that I would put on the table, is why is it that so
little of Chinese development monies go through the Asian Infrastructure and Investment Bank, which has been
implemented primarily by ADB, so multilateral standards.  And why has so much gone through One Belt One Road? 
To me it’s pretty clear.  One is upholding harder standards, and the other is relying on local standards.

So our goal is to see all major infrastructure developers ensuring that the world is able to advance in a way that the
benefits are reaped by the citizens without the kind of environmental or ultimately white elephant projects that have
been so notorious in some countries.

Question:  I’m Will Embry from DynCorp International.

Alice, how will CPEC and the Belt and Road Initiative impact Afghanistan’s effort to increase its economic ties in the
region?

Ambassador Wells:  China has not been a real player in Afghanistan development.  China is not a provider of any
significant grant assistance.  It has invested or it has laid claim to a copper mine, a significant cooper mine, but has
never developed the copper mine.  Right now I would say I see opportunities for the United States and China to be
important partners in reinforcing the need for a negotiated political settlement, and you see Ambassador Khalilzad
regularly consulting with his Chinese counterpart among other regional actors, but I haven’t seen China take the steps
that would make it a real contributor to Afghanistan’s stabilization, much less stitching it back into the Central Asia
and the international community.
Most of the regional connectivity initiatives have come from the neighboring Central Asia states.  Whether it’s
Turkmenistan, Uzbekistan, Tajikistan, all of whom are developing rail lines, electricity lines, cross-border trade.  Very
positive developments that we’ve seen over the last two years in particular with the opening of Uzbekistan.

Question:  Is China helping them fund some of those projects that will connect them to Afghanistan?
Ambassador Wells:  Not to my knowledge.
Question:  My name’s Jon Danilowicz, I’m an associate with Bower Group Asia.
I have a question that pivots on, it’s related to CPEC but it’s about the other kind of major foreign investment that
Pakistan’s been receiving recently which is from the Persian Gulf.  The LNG relationship is increasingly critical to the
bilateral U.S.-Pakistani economic relationship.  However, American LNG firms, with the exception of Accelerate, kind
of working on this FSRU front haven’t really been able to tap into the market for actual factual LNG because of the
high presence of these long-term FSAs from the Gulf.

How can the United States more effectively argue to get U.S. LNG truly into Pakistan as a major source of energy as
opposed to just a source of this importation infrastructure?

Ambassador Wells:  We stand ready to advocate on behalf of American companies and to seek the regulatory
environment and the conditions that would allow them to compete fairly.  There are major companies currently
exploring opportunities in Pakistan.  The role of the Gulf has been interesting over the last couple of years.  As
Pakistan was entering its latest economic crisis we saw Saudi Arabia and Qatar inject infusions of capital into
Pakistan which again had the effect of illustrating that this is not a problem money can solve.  It’s a problem that has
to be solved by reform.  And whether it’s the energy pricing structures or regulations or currency management and
Central Bank independence.  You know, it’s all of those very difficult but necessary reforms that are going to be the
solution.
Moderator:  Alice, we started a little late.  Do you have a little time?  Or do you have to run off?
Ambassador Wells:  I have time.
Moderator:  Okay, I’m going to take several questions at one time.
Question:  [Karam Sajjad], 92 News from Pakistan.
The U.S. position, since the beginning of CPEC, U.S. position is of observers of the project.  One of Pakistan’s
senators mentioned Pakistan is not only sharing the land but maritime road during the CPEC project.  My question is
all this commotion which is coming from U.S. is now because, do you think U.S. is feeling threat in the Gulf of Oman,
Arabian Ocean and Indian Ocean?  U.S. is having the threat of losing its primacy in that region?

Question:  May name is Micah Kyler.  I’m an intern at the Hudson Institute just across the street.
I wanted to ask what is keeping China from developing a more responsible model for its BRI projects?  Is it something
that the communist party doesn’t want to give up because it benefits the country and they’re not concerned about
other countries in the region?  What is the factor preventing them from developing a more responsible model?

Question:  My name is [Saldari Marantiq].  I’m a proud Pakistani-American.

My question, do you have any recommendations for the American Pakistanis like me to do something regarding what
is happening in our part of the region?

Ambassador Wells:  Thank you.

I don’t think the United States is feeling threatened.  We’re very proud of the long history of military to military
cooperation that we’ve enjoyed with Pakistan.  We continue to have increasingly constructive relations with Pakistan. 
Pakistan has been a very important actor in anti-piracy effort where we’ve collaborated together in the Gulf, where
Pakistan has had a liaison officer in Bahrain where the 5 th Fleet is located.  And this administration is actually asking
for more from neighboring countries to burden-share on whether it’s anti-piracy or Iran’s malicious efforts to
complicate shipping through the Arabian Gulf.
So I actually don’t think that is a motivation at all, and I think that there is potential if Pakistan takes steps to move
away and to restrict the ability of non-state sort of terrorist proxies, that the potential for our relationship to grow ever
deeper is there.  You saw that in Prime Minister Kahn’s excellent visit to the United States this summer and the very
warm and constructive meeting that he had with President Trump.

With motivations, like why isn’t China overnight more transparent.  I’m not a China expert, but probably my East Asia
Pacific colleagues don’t welcome me opining, but obviously the program was designed in part to be able to export
excess labor, excess capital, excess production facilities.  So China was trying to solve one of its own domestic
problems and it solved its domestic problem sometimes at the expense of the receiving country.

There are over 95 state-owned enterprises that are part of this Belt and Road Initiative and that have been engaged in
infrastructure projects overseas, Chinese state-owned enterprises.

And so I imagine there’s a degree of difficulty in coordination.

But I do think we have to be clear-eyed.  The rhetoric we’ve heard recently, including at the second Belt and Road
Summit is much better.  If you read the rhetoric on green technology and a green One Belt One Road, that’s all
positive.  But wait to see whether it’s implemented.  That’s where the truth is.  I would start again from the very basic
building block that needs to occur in transparency.

So when you talk about why American firms haven’t been more active, because American firms half the time have no
clue that a One Belt One Road project is being bid.  Or the bids are restricted only to Chinese companies.  Or the
project information is not made available to the bidders in a transparent fashion.

So I would just keep circling back to transparency.  Ask for transparency.  Let’s normalize what China is doing and
make them a good global citizen in the development space.

We’re very grateful for our diaspora communities.  Whether it’s Pakistan-American communities, Indian-American
communities, I benefit because of the energy and the interest that you bring to relationships, to your advocacy and
engagement with Congress, to your serving as sort of the tip of the sphere in humanitarian educational projects,
people to people.  It’s a gift.

So I would say stay active.  Keep being a bridge between Pakistan and here.  Let us know how we can support your
own initiatives.  We look for ways to highlight and engage and work with members of the community.

Question:  Good afternoon.  This is [Javidia Tarin] and I’m coming from Baluchistan where the CPEC is happening
and I’m running an independent think tank there which is Baluchistan Institute of Research and Development.  We
closely work with the government of Baluchistan because I’m part of the task force as well.  And I’m a Fulbright
Scholar, too because in 2013 and ’14 I got the Hubert H. Humphrey Fellowship and I studied from Arizona State
University.  And the State Department honored me to come and speak with the alumni network as an alumni and to
look at the current fellows.
The people in Baluchistan, they are really looking forward for CPEC.  They do think that this is a game-changer.  But
as a citizen of Pakistan and Baluchistan, we do have a reservation when it comes to the legislation for the citizens
because we want that to be the same as in you know, Gulf countries.  The Chinese are coming, we welcome that.

The second thing is we have seen that, because I represent the civil society as well in my background as a journalist. 
So we have seen that since last few years the NGO sector and civil society has not been provided a lot of
opportunities so is there, because I met the World Bank President as well, and I requested him that in Pakistan we
really need that support to empower civil society.  So that is also very important.  That is a request.  Thank you.

Question:  Thank you.  John [Saverly] from [Inaudible] TV News, Pakistan.

Pakistan right now is taking investment from all over the world, especially from America.  So is there any change in
the travel advisory for the American investors or is Pakistan still a dangerous place?  Thank you.

Question:  I’m Allen [Cronstet], Congressional Research Service.

Ambassador Wells, that was a masterfully delivered speech and left me to wonder why you are not a Congressionally-
confirmed Assistant Secretary.  That’s a comment.  [Laughter].

Moderator:  I’m glad it’s a comment.

Question:  My question though has to do with India.  Obviously India’s a major economy that has rejected
participation in the BRI and looks to what is going on in Pakistan with CPEC as a potential entrenchment or a new
level of entrenchment of China and Pakistan’s economy, also other South Asian projects that include building and in
some cases running ports that have the potential for future military use.
Given the Indian concern about strategic encirclement I’m wondering if you can comment on the dynamics there and
maybe as well how you engage with the New Delhi government in this context.  Thank you.

Ambassador Wells:  Thank you.  It’s great to have a Fulbrighter in the audience, and we’re really proud of the
Fulbright program.  It’s our flagship, largest Fulbright program and it’s created I think a great community of Pakistanis
and Americans who better understand one another.  So I’m delighted that you’re here.
Baluchistan is interesting because there have been tensions in Baluchistan and at various times protests over
Gwadar Port development, and it really airs some of the tensions involved in these massive infrastructure projects
when you don’t have the outreach to the local citizenry, you don’t have the corporate social responsibility that a lot of
our major firms do in trying to build buy-in among the community and stakeholders and ensure that locals feel like
they’re benefiting personally.   And many of the complications associated with Gwadar including now the very long-
term lease that’s been given to the Chinese, the question of how profits are going to be distributed between Pakistan
and China.  These are all very real questions that civil society media need and should shine a light on.

Where we draw the line, obviously, because we fully support that kind of questioning and that debate.  Where we’ve
been crystal clear in drawing the line is that we don’t support violence.  And so you saw the United States designate
the Baluchistan Liberation Army as a terrorist organization after they committed several attacks including against a
Chinese associated with the One Belt One Road project.
I think Gwadar is sort of a classic example.  It also feeds into Indian anxieties because it’s not clear the commercial
basis on which Gwadar is being developed.  And this has been a project very long in the making and not very evident
to outsiders what’s the economic rationale that drives it.

I think India has been crystal clear from the outset that they saw the geopolitical nature of elements of the One Belt
One Road.  We share India’s concerns over projects that don’t have an economic basis and that lead to countries
ceding sovereignty.

Sri Lanka’s not the only country that has ceded, effectively ceded sovereignty over a key asset.  You’ve had reports
out of Tajikistan over land swaps in order to get out of excessive debt.  And this is a real issue.

All I can say is that however much you might dislike the World Bank or IMF, they don’t take 99-year leases or strip
away the sovereignty of countries that they engage in.  So let’s be very clear-eyed about the terms that multilaterals
bring to the table, versus the terms that are being imposed under some of these programs.

Where we’ve been able to work I think effectively with India in a new way is in that Quad format.  So literally, it’s very
powerful to sit down with like-minded countries.  To sit down with Australia, Japan, India and us and to look at the
world, and are we engaged enough, are we reinforcing one another’s activities, are there possibilities through the
Millennium Challenge Corporation to do cross-border connectivity?

I’ve been involved with the Quad since we founded it about 2.5 years ago.  We just had our first Ministerial-level Quad.

So I see that as a real strong manifestation of our seriousness and being able to provide realistic alternatives for
countries looking for infrastructure.

On the travel advisory, it’s something we evaluate every six months.  We want to see improvements in Pakistan’s
security situation so that we can reflect that in a travel advisory.  Some of the steps I think  that are very important are
Pakistan’s implementation, full implementation of the Financial Action Task Force requirement to counterterrorism
financing, to prosecute and seize the assets of members of terrorist organizations.  And as Pakistan is taking these
steps, it will be reflected I think in how, in both the safety and security situation and in our ability to look at the travel
advisory in the future.

Moderator:  Alice, I think we’ve gone on for over an hour.  I think probably there are more questions, but I suspect
you really have to go.  It sounds like your voice is giving out too.
Ambassador Wells:  You’ve been a great audience.  It’s wonderful to have an opportunity to talk to you.
Moderator:  Hasn’t she been a great speaker?  Thank you all very much for coming.