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Fearing Debt Trap, Pakistan Rethinks Chinese ‘Silk Road’ Projects

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

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

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

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

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

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

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

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

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

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

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

Beijing would only proceed with projects that Pakistan wanted, he added. “This is Pakistan’s economy, this is their society,” Yao said.

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

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

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

Crumbling railways

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

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

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

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

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

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

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

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

Off-book debts

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

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

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

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

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

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

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

Analysts say Pakistan will struggle to attract non-Chinese investors into the project, which may force it to choose between piling on Chinese debt or walking away from the project. In 2017, Pakistan turned down Chinese funding for a $14 billion mega-dam project in the Himalayas due to cost concerns and worries Beijing could end up owning a vital national asset if Pakistan could not repay loans, as occurred with a Sri Lankan port.

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

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

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

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

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Nobel Prizes Still Struggle With Wide Gender Disparity

Nobel Prizes are the most prestigious awards on the planet but the aura of this year’s announcements has been dulled by questions over why so few women have entered the pantheon, particularly in the sciences.

The march of Nobel announcements begins Monday with the physiology/medicine prize.

Since the first prizes were awarded in 1901, 892 individuals have received one, but just 48 of them have been women. Thirty of those women won either the literature or peace prize, highlighting the wide gender gap in the laureates for physics, chemistry and physiology/medicine. In addition, only one woman has won for the economics prize, which is not technically a Nobel but is associated with the prizes.

Some of the disparity likely can be attributed to underlying structural reasons, such as the low representation of women in high-level science. The American Institute of Physics, for example, says in 2014, only 10 percent of full physics professorships were held by women.

But critics suggest that gender bias pervades the process of nominations, which come largely from tenured professors.

“The problem is the whole nomination process, you have these tenured professors who feel like they are untouchable. They can get away with everything from sexual harassment to micro-aggressions like assuming the woman in the room will take the notes, or be leaving soon to have babies,” said Anne-Marie Imafidon, the head of Stemettes, a British group that encourages girls and young women to pursue careers in science, technology, engineering and mathematics.

“It’s little wonder that these people aren’t putting women forward for nominations. We need to be better at telling the stories of the women in science who are doing good things and actually getting recognition,” she said.

Powerful men taking credit for the ideas and elbow grease of their female colleagues was turned on its head in 1903 when Pierre Curie made it clear he would not accept the physics prize unless his wife and fellow researcher Marie Curie was jointly honored. She was the first female winner of any Nobel prize, but only one other woman has won the physics prize since then.

More than 70 years later, Jocelyn Bell, a post-graduate student at Cambridge, was overlooked for the physics prize despite her crucial contribution to the discovery of pulsars. Her supervisor, Antony Hewish, took all of the Nobel credit.

Brian Keating, a physics professor at the University of California San Diego and author of the book “Losing the Nobel Prize: A Story of Cosmology, Ambition, and the Perils of Science’s Highest Honor,” says the Nobel Foundation should lift its restrictions on re-awarding for a breakthrough if an individual has been overlooked. He also says posthumous awards also should be considered and there should be no restriction on the number of individuals who can share a prize. Today the limit is three people for one prize.

“These measures would go a long way to addressing the injustice that so few of the brilliant women who have contributed so much to science through the years have been overlooked,” he said.

Keating fears that simply accepting the disparity as structural will seriously harm the prestige of all the Nobel prizes.

“I think with the Hollywood #MeToo movement, it has already happened in the film prizes. It has happened with the literature prize. There is no fundamental law of nature that the Nobel science prizes will continue to be seen as the highest accolade,” he said.

This year’s absence of a Nobel Literature prize , which has been won by 14 women, puts an even sharper focus on the gender gap in science prizes.

The Swedish Academy, which awards the literature prize, said it would not pick a winner this year after sex abuse allegations and financial crimes scandals rocked the secretive panel, sharply dividing its 18 members, who are appointed for life. Seven members quit or distanced themselves from academy. Its permanent secretary, Anders Olsson, said the academy wanted “to commit time to recovering public confidence.”

The academy plans to award both the 2018 prize and the 2019 prize next year — but even that is not guaranteed. The head of the Nobel Foundation, Lars Heikensten, has warned that if the Swedish Academy does not resolve its tarnished image another group could be chosen to select the literature prize each year.

Stung by criticism about the diversity gap between former prize winners, the Nobel Foundation has asked that the science awarding panels for 2019 ask nominators to consider their own biases in the thousands of letters they send to solicit Nobel nominations.

“I am eager to see more nominations for women so they can be considered,” said Goran Hansson, secretary-general of the Royal Swedish Academy of Sciences and vice chairman of the Nobel Foundation. “We have written to nominators asking them to make sure they do not miss women or people of other ethnicities or nationalities in their nominations. We hope this will make a difference for 2019.”

It’s not the first time that Nobel officials have sought diversity. In his 1895 will, prize founder Alfred Nobel wrote: “It is my express wish that in the awarding of the prizes no consideration shall be given to national affiliations of any kind, so that the most worthy shall receive the prize, whether he be Scandinavian or not.”

Even so, the prizes remained overwhelmingly white and male for most of their existence.

For the first 70 years, the peace prize skewed heavily toward Western white men, with just two of the 59 prizes awarded to individuals or institutions based outside Europe or North America. Only three of the winners in that period were female.

The 1973 peace prize shared by North Vietnam’s Le Duc Tho and American Henry Kissinger widened the horizons — since then more than half the Nobel Peace prizes have gone to African or Asian individuals or institutions.

Since 2000, six women have won the peace prize.

After the medicine prize on Monday, the Royal Swedish Academy of Sciences will announce the Nobel in physics on Tuesday and in chemistry on Wednesday, while the Nobel Peace Prize will be awarded Friday by the Norwegian Nobel Committee. On Oct. 8, Sweden’s Central Bank announces the winner of the economics prize, given in honor of Alfred Nobel.

 

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Croatian Vintner Ages Wines in Amphoras on Adriatic Sea Floor

Traditional two-handled ceramic jars known as amphoras were used extensively in ancient Greece to store and transport a variety of products, especially wine. These days they are more likely to be found in shipwrecks than in stores. But wine-filled amphoras are once again being found on the sea floor, not from sunken ships, but deliberately placed there by a special Eastern European winery. Faith Lapidus explains.

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Some US Catholic Churches Close as Attendance Flags

The Catholic Church is closing parishes across the American Midwest and Northeast in response to years of flagging attendance. Changing demographics and an overall trend of secularism is partly to blame, but repeated cases of sexual abuse in the church have not helped. Reporter Teresa Krug reports from the Midwestern state of Iowa, where some church members are questioning why they should stay.

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Using Art to Unite a Divided Neighborhood

Sedgwick Street in Chicago is a thoroughfare divided by race and socio-economics. The area was settled by German, Irish and Sicilian immigrants. But in the 1950s and ’60s, when the original settlers began moving out, African-Americans, Puerto Ricans and so-called hippies started moving in. Today, Sedgwick Street remains a social and economic demarcation line between the haves and the have-nots. But as VOA’s Mariama Diallo reports, one art studio owner hopes to use art to unite the neighborhood.

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Artist With A Rare Vision Condition Sees The World Like Few Do

Some animals, like mantis shrimp and chameleons, can see more shades and colors than humans. But a few people also have this ability. They have a condition called tetrachromacy. Concetta Antico, an artist from San Diego, is one of them. Genia Dulot spoke with her about what it’s like to live with vision that allows her to see millions of shades of color.

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War Childhood Museum Documents the Most Innocent Victims of War

It may be the world’s only museum that looks at the lives of children who grew up during wars. Founded in 2017 in Sarajevo two decades after the end of the Bosnian War, the War Childhood Museum opened its newest temporary exhibit earlier this month in Washington. Azra Dolberry spoke to war survivors and museum curators about why the world needs to learn more about the most innocent victims of war.

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Tesla, Musk Settle Fraud Suit for $40M

Tesla Chief Executive Officer Elon Musk and the electric car company have agreed to pay a total of $40 million and make a series of concessions to settle a government lawsuit alleging Musk duped investors with misleading statements about a proposed buyout of the company.

The Securities and Exchange Commission announced the settlement Saturday, two days after filing a case seeking to oust Musk as CEO.

The settlement will require Musk to relinquish his role as chairman for at least three years, but he will able to remain as CEO.

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