China Pakistan Economic Corridor- A blessing in disguise?

China Pakistan Economic Corridor- A blessing in disguise?

 

It has been few years since President Xi Jinping announced the China-Pakistan Economic Corridor during his inaugural state visit in April 2015.According to Mr. Xu Shaoshi, CPEC is an integral part of the “One Belt, One Road Initiative” that will accredit the 21st century Maritime Silk Route vision for China. Shaoshi is the Chairman of National Development and Reform Commission in China and has been attached to the project since its inception as a regional framework. Massarat Abid and Ayesha Ashfaq in their evaluation have termed CPEC as a vision with world-changing implications (Abid, Massarat and Ashfaq, Ayesha. “CPEC: Challenges…). The project outline anticipates establishing a regional framework through a patchwork of diplomacy, economic zones, and new infrastructure while the multibillion-dollar investment exceeds all other foreign direct investment Pakistan has received in the past several years compared to the US financial support, associated with the war against terrorism in the past decade. The project is designed in a way that focuses on transport and communications initially and infrastructural development in the long run. The projects under the economic corridor umbrella are due by 2030 with the short term project completion by 2017 and the rest in another decade or two. CPEC has various geopolitical and eco-strategic interest amalgamated for the region in specific and primarily the Gwadar port in specific is the most pressing matter for the time being. While China aims to establish an alternative route from Gwadar located near the Strait of Hormuz as a replacement for the current route from the Strait of Malacca for their respective oil trade from the Persian Gulf. The Chinese, on the other hand, will be successful in minimizing traffic in respective Chinese seaboards which are almost 3500km away from Kashgar, they can reach out to warm waters and expand their influence in the Indian Ocean. The corridor comprises of eastern, central and western alignment occupying most parts of Pakistan with all provincial capitals serving as focal operational headquarters. The fact of the matter is that Pakistan and China are not the only stakeholders in the CPEC paradigm, it comprises of central Asian states as well as Iran and Russia exhibits a keen interest in the quest for warm waters. In his analysis, Cheng-Hin Lim explains CPEC as “a bridge between three engines of growth, China, South Asia and Central Asia” which will, in turn, stimulate deep regional economic integration forming a trading block of more than 3 billion people, nearly half the planet (Ling Him, Chen. “The China-Pakistan Economic…). In absolute terms, CPEC aims to resolve the chronic energy crisis currently faced by Pakistan by adding at least 10,400MW to the national grid with an estimated growth of 2-2.5 % in Pakistan`s annual GDP. Undoubtedly Gwadar is of paramount importance to the corridor, therefore, the initial phase comprises of the establishment of an international Airport at Gwadar along with unyielding security and infrastructure mechanisms to combat any type of catastrophe. Gwadar not only offers an alternate route to China for imported energy, in fact, allows Pakistan to serve as a regional transition from Eurasian states to South East Asia.

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Sir Halford Mackinder in the 19th century, a strong advocate of the heartland theory later admitted the fact that geopolitical dominance is only possible through continental and maritime influence. Taj Khattak previously served in Pakistan Navy affiliates the One Belt, One Road paradigm with Mackinder`s sense of world domination(Khattak, Taj “An effective seaward defense..). The economic corridor in itself revamps the strategic gateway appeal and is portrayed as a multi-billion dollar project exploring bilateral connectivity yet it remains as a short-term infatuation until the population residing in CPEC affected areas remains below the poverty line. Gwadar is a prime example where the local population has shown persistent resentment to the latest developments concerning the corridor. Media reports and journalistic views have reflected the local sentiment where they consider CPEC as an attempt to subvert the locals and recognize all developments underway as a strategy for Chinese domination in the region. When express tribune inquired the locals over CPEC developments, they were frightened and insecure over their freedom being taken away. “This is all being done for China, not the people,” said one such fisherman, Elahi Bakhsh, who views plans to turn Gwadar into China’s deep-water access point to the Arabian Sea with caution (News Desk, “Gwadar residents’ voice…).Kaiser Bengali currently serving as an economic advisor to the chief minister encapsulates the Baloch opinion in a statement to the express tribune “The suspicion that all the Baloch will get from CPEC is the right to repair punctures on Chinese tires”. International and regional agreements signed lately such as the ratification of international road transports and recently signed China, Kyrgyzstan, Kazakhstan, and Pakistan agreement for facilitating traffic in transit, coupled with TFA under World Trade Organization will build on to Pakistan`s perspective of greater regional cooperation and resource mobilization through the corridor. Strategic analysts around the world have claimed that Pakistan is eyeing an opportunity to thwart India with Chinese coalition now what rankles India most is that the Chinese-funded port, and the corridor to Kashgar in Xinjiang province, have blocked its own ambitions to revive its traditional routes to the Central Asian region, a route that it is now trying to revive via Afghanistan (Khan, Nadeem “China-Pak corridor).Recently India signed a tripartite agreement with Afghanistan and Iran linking the Chabahar port with Afghanistan in an attempt to effectively bypass Pakistan while Pakistan aims to woo Russia into CPEC to counter the Indian agenda of regional isolation for Pakistan. CPEC has basically elevated Pakistan’s position in the `Greater Game` for this region where Gwadar port and Chabahar — located barely 72 km away from each other — are no mere commercial hubs but rather geopolitical launch pads in a wider strategic power play(Khan, Nadeem “China-Pak corridor the start..).Gwadar is not only experiencing infrastructural developments conversely Chinese motives are much more diversified than trade and economic gains, the establishment of a Chinese naval base will allow China to monitor US and Indian activity in the Arabian Sea and the Persian Gulf. Pakistan has been labeled as a `failing state`, `epicenter of terrorism `, `the most dangerous country` and etc for almost a decade now. In order to elude from the international stigma associated with Pakistan, it needs to undergo massive economic and infrastructural developments through the CPEC apparatus and alleviate its regional status. To maintain its geopolitical position in the region and as a stringent responsive strategy to the Indian narrative, Pakistan needs to undertake concrete measures to narrow the ever-widening gap between economic and military fields. Syed Mohammad Ali, a development economist emphasizes the need to understand the multiple layers pertaining to the CPEC, including the broader geostrategic context in which this initiative has been conceived (Ali, Syed. Muhammad. The Far Reaches…). Development strategist and political observers around the world are of the view that China`s conscience towards the `One Belt’, One Road ‘initiative and the expansion of maritime silk route is quite clear and if Pakistan faces obstacles and operational failures that may affect timely completion of the projects underway, China may opt for an alternative route from the Arabian sea through Iran and Central Asian states. Ali highlights the importance of Pakistan`s strategic involvement in the corridor and the repercussions of uneven development and provincial concerns if the institutional framework fails to comply with the principal objectives of the corridor. Pakistan cannot afford to risk Chinese investment and loose its strategic involvement in the regional power circle where it may act as a buffer zone for competing powers like China and India.

Gwadar, a centerpiece to the Strait of Hormuz and a potential Chinese naval outpost in the near future is currently serving as the strategic hub for Sino-Pak relations. In April 2015 when China and Pakistan officially launched CPEC, Gwadar was conceived as the link between the One Belt, One Road, and Maritime Silk Road project. Timely completion of the projects underway and systematic infrastructure development is essential for the corridor`s safety. Recently Pakistan Navy established task force 88 to guard the sea lanes of the deep sea port along with forces like coastal guards and frontier constabulary who are already serving to maintain peace and prosperity in the region. Gwadar`s importance can be notified of the fact that Pakistan Army dedicated a whole battalion headed by a Major General safeguarding the projects underway in the city. The special security division of army has stationed special brigades from Gwadar to Kashgar ensuring a secure environment for Chinese engineers and technical staff.Although Gwadar port authority and Chinese stakeholders have taken significant measures to incorporate the local population with assistance from vocational and technical training institutions under CPEC, there is no doubt that Gwadar in true terms is the economic stimulus for the corridor as Aiysha Safdar entitles it as the `lynchpin of CPEC`.The port`s significance is due to its proximity to the Strait of Hormuz which is recognized as an International maritime energy chokepoint(Safdar, Aiysha. “The China-Pakistan Economic…).China has invested in Myanmar, Sirilanka and Chittagong building strategic partnerships with the respective economies however it aims to diversify its operations beyond the near seas reaching up to the Saharan and African belt in particular whereas Chinese investment has already reached North East Africa. The former Chinese ambassador to India recognized Gwadar`s role as a logistics support base for supplies and maintenance assisting the Chinese fleet when it embarks for Suez Canal to the Gulf of Aden for various economic activities(Safdar, Aiysha. “The China-Pakistan Economic…). Gwadar apart from its economic significance assisted Pak and PLA navy to increase strategic defense collaboration. Lately, a multibillion-dollar maritime deal signed between the two parties where Beijing will provide 8 submarines to Pakistan`s naval fleet. Gwadar`s potential as a deep sea port cannot be formulated into effective action until and unless a secure mechanism is adapted to prevailing separatist movements and especially the western alignment route which is by far the most dangerous route in terms of militancy and instability. Gwadar faces some obstacles in the international arena where amid CPEC developments have driven the Indian counterpart to sign a long-awaited deal concerned with the Chabahar port and efforts to sabotage CPEC are underway. Indian investment in Chabahar and using Afghanistan as an intermediary will lower Gwadar`s strategic importance in the region and both ports are expected to engage in the strategic encirclement of the resources around.

Aiysha Safdar analyses the changing dimensions and CPEC`s role in power politics where growing antagonism and the schism between China and the United States is at its peak. Pakistan being a close ally of the United States needs to adopt a cautious approach towards the transitional phase considering the Sino-US relations (Safdar, Aiysha. “The China-Pakistan Economic…).Expansion of maritime commercial activity through CPEC will add onto the responsibilities of Pakistan Navy which needs to build upon technical lines and adapt modernized mechanisms. Insecurity and rising militancy can pose some serious threat to Pakistan, however, the scale of this threat is not uniform throughout Pakistan where the eastern alignment is relatively safer than the western one. According to Safdar Sial “it is imperative to ensure stringent security measures along the entire CPEC alignment” (Sial, Safdar. “The China-Pakistan Economic). Sial`s perspective draws attention to the potential security threats to CPEC in each geographical region of Pakistan, he explains the diverse challenges ranging from the nationalist insurgency in Baluchistan to ethnopolitical divide in Karachi. Gwadar serving as the geopolitical launch pad for the corridor shares boundaries with volatile districts of Kech and Khuzdar dominated by separatist movements. Upon evaluation, Gwadar`s security situation is relatively safer to other districts of Baluchistan especially districts along the Makran Coastal highway are severely affected by militancy. Government’s decision to hold up to western alignment and rather pursue the eastern passage was primarily due to the robust security crisis. The KPK factor concerned is quite similar to that of Baluchistan where the security threat through CPEC route ranges from severe to mild up to Diamir and AJK districts which have lately been assigned brigades from the special security division. Sial along with other security analysts have recognized the fact that Pakistan has the requisite security infrastructure to deal with the threats to the corridor moreover security infrastructure is not the only apparatus required to ensure successful completion of the corridor, in fact, a comprehensive strategy needs to be formulated that articulates security threat along with retaliatory measures for political forces who aim to distort the corridor`s envisaged route and arouse provincialism amongst masses.

Dr. Bhattacharjee classifies china`s approach towards foreign direct investment in a manner that not a single Yuan leaves China during the entire developmental process (Bhattacharjee, Dhrubajyoti, “China-Pakistan…). Critics have raised questions about the balance of power and economic offshoot of the corridor is the corridor another East India Company in the making or how will other regional powers including Iran, India, and Russia react to the Chinese advancements in the region. Many nationalist terms it as a violation of Pakistan`s territorial integrity which are mere attempts to make the multibillion-dollar deal controversial as to what happened with the Kalabagh project. Pakistan needs to assure that development underway neutralizes the economic deprivation factor of the local Baloch population and their participation is maximized to an extent that curbs militancy in the region. In spite of the constant efforts by Pakistan to incorporate the local sentiment, Baluchistan conundrum awaits a permanent solution, a similar pattern is followed in North West Pakistan. Akbar Ali, a journalist in Shanghai University China highlights the issues related to CPEC in terms of transparency and political discontent that may hinder economic growth and regional integration (Akbar, Ali “China-Pakistan Economic…). In the coming decade, the US-India strategic nexus opposed to the increasing bilateral cooperation between Pakistan and China where CPEC will act as the epitome of this strategic powerplay in the Asia Pacific region. Chinese, on the other hand, are not perfect capitalists in whatever projects they pursue and their operating style differs from region to region. Edward Lee, an investment consultant signifies, when Chinese companies invest in the developed world they make significant endeavors to follow the local legal structure and employs expert legal counsel (Bhattacharjee, Dhrubajyoti, “China-Pakistan…). Although China is Pakistan`s most trusted neighbor strategic partner in terms of defense and economic integration, Pakistan needs to exercise cautious optimism towards CPEC`s plan of action and assess its gains regardless of the strategic partnership. The crux of the corridor`s potential for Pakistan is its assistance in overcoming the energy crisis which proves out to be a debacle in Industrialization. The Gwadar-Kashgar route can conveniently transport mechanical infrastructure utilized for the various energy projects under the corridor`s umbrella such as Neelam-Jhelum project due by 2017 which is the largest overseas investment by China across the globe adding up to 300MW in the national grid. Similarly, on South Pakistan has a coal powered power station underway at Port Qasim worth almost 2 billion dollars. China is not only investing in Pakistan through monetary funds, in fact, Chinese engineers, technicians and support staff are involved in all the projects currently underway through CPEC. China has made some substantial gains in nuclear power in the last decade and plans to incorporate the same nuclear technology with projects like Chashma and Cannup power plants located in Karachi`s coastal belt. Pakistan is not only eyeing for non-renewable sources, in fact, China through its economic advantages have assisted Pakistan in the establishment of tidal and wind energy mechanisms even in backward areas like Jhimpir where a wind farm is partially operational. Completion of the corridor is inevitable for both Pakistan and China to foster socio-economic growth in the long run and revival of the traditional Karakorum highway which may act as an indispensable measure for the maritime silk route framework. CPEC can be operationalized as a truly networked corridor configured to regional specifications and designed in a manner that fulfills the needs of all stakeholders involved. Opportunities like CPEC emerge in decades and as Pakistan is on a verge of faltering economy and stagnant growth, CPEC can lead to a new era of economic prosperity if this multi-billion dollar project is materialized in its real terms with general consideration of strategic realms and a comprehensive strategy to subvert attempts aimed at the corridor`s decline.

Shehryar Imran Ejaz

Lahore University of Management Sciences

Work Cited Page

 

Abid, Massarat, and Ashfaq, Ayesha. “CPEC: Challenges and Opportunities for Pakistan Vision, Volume 16 Version 2. Dec 14, 2016

(http://pu.edu.pk/images/journal/studies/PDF-FILES/Artical-7_v16_2_2015.pdf)

 

Ling Him, Chen. “The China-Pakistan Economic Corridor One year On- analysis”

May 16, 2016. Web. Dec 14, 2016

(http://www.eurasiareview.com/16052016-the-china-pakistan-economic-corridor-one-   year-on-analysis/)

 

News Desk. “Gwadar residents voice concerns over CPEC benefits”

Feb 5, 2016. Print. Dec 14, 2016

Khattak, Taj “An effective seaward defense- pre-requisite for success of CPEC”

Defense Journal April 2016. Print. Dec 14.2016

Khan, Nadeem “China-Pak corridor the start of a new regional `great game`”

Pakistan Defense Web. Dec 14, 2016

(http://defence.pk/threads/china-pak-corridor-the-start-of-a-new-regional-great-game.466444/)

 

Ali, Syed. Muhammad. The Far Reaches of the Corridor. The Tribune. Islamabad. June 19, 2015. Print. Dec 15, 2016

Sial, Safdar. “The China-Pakistan Economic Corridor: An Assessment of Potential Threats and Constraints”. Conflict and Peace Studies, Vol.6, No.2, p. 24.

  1. Web Dec 14 2016

(http://s3.amazonaws.com/academia.edu.documents/45123765/268.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1481751895&Signature=mGnbOIQAo%2FMaXUXBvb5p086r1vg%3D&response-content-disposition=inline%3B%20filename%3DThe_China-Pakistan_Economic_Corridor_an.pdf)

Bhattacharjee, Dhrubajyoti, “China-Pakistan Economic Corridor”

May 12, 2015. Web. Dec 15, 2016

(http://www.icwa.in/pdfs/IB/2014/CPECIB12052015.pdf)

Safdar, Aiysha. “The China-Pakistan Economic Corridor–Its Maritime Dimension and Pakistan Navy.” Web. Dec14, 2016

(http://www.issi.org.pk/wp-content/uploads/2016/05/Aiysha-Safdar_Vol.35_No.3_20151.pdf)

Akbar, Ali “China-Pakistan Economic Corridor: Prospects and Challenges for Regional Integration July 20, 2016, Web. Dec 15, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shehryar Ejaz

Shehryar Ejaz

Shehryar serves as the Editor In Chief of The Daily 360. He is currently pursuing his undergraduate from Lahore University of Management Sciences. Twitter: @sheryejaz

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