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China-Pak economic corridor: A game changer

By: Tashfeen Jamal

Besides India it is UK which is not feeling comfortable with Pak-China economic corridor based growing relationships. Background interaction with UK policy makers in Islamabad and elsewhere has revealed that the Britain considers the ongoing cooperation between the two neighboring countries as an act of selling its soul in return for USD 45 billion. What constitutes political consternation in Britain is that at the end of the day Pakistan can realign its political and economic focus on China, instead of UK and EU.
In order to address the foregoing ill-conceived comprehension on the part of Britain and other EU states, we need to clarify that China and Pakistan Economic Corridor (CPEC) project symbolizes the growing mutuality of interest and the vision of a shared politico-economic future on the part of two neighboring countries that has nothing to do with UK-EU fears. It creates a new framework of interaction on the basis of economic connectivity and regional cooperation which will have far reaching positive implications for the two countries as well as the adjoining regions, as economic uplift of any region or country has the potential to send peace and development signals across the continents. What Pakistan needs to impress upon its European detractors is that instead of radicalism, we need to export peace and prosperity.
The proposed China-Pakistan Economic Corridor recognizes the new realities of global and regional politics by cultivating a more systematic, up-graded and need-based interaction for socio-economic, industrial, energy and trade development. This also provides an opportunity to China and Pakistan to improve their interaction with Central Asia, West Asia, the Middle East and Europe. Both Pakistan and China are expected to gain from the proposed connectivity through highways, railways, sea lanes, energy pipelines and electricity transmission lines. They will equally contribute to socio-economic development of other countries that become part of these arrangements.
Chinese Premier Li Keqiang’s decision to include Pakistan in his first foreign visit in May 2013, after assuming office in March 2013, underscored the importance Chinese leadership attaches to Pak-China relationship. The visit’s timing significantly indicated a process of political-economic decision making in china as it took place immediately after elections in Pakistan.
The visit of Prime Minister Muhammad Nawaz Sharif to China in July, 2013 marked a new phase in the development of the relationship by putting economic cooperation and connectivity squarely at the centre of the bilateral agenda. During the visit MoU on China-Pakistan Economic Corridor (CPEC) was signed. The aim of MoU is to enable the two governments to cooperate in the planning and development of the Economic Corridor-based relationship, facilitate and intensify economic activity along the corridor map. The MoU further envisages development of long term plan for economic corridor up to 2030.
China and Pakistan are not expected to face any political problem in expanding their mutual connectivity as they have developed strong mutual trust through the multifaceted bilateral interaction over the last six decades. This experience demonstrates that “there are no contradictions in the strategic and political goals of Pakistan and China, and they have found out over the years that their relationship is mutually rewarding”. There is unanimity of views among various political parties in Pakistan “to strengthen Pakistan’s ties with China”.
Currently there is a new ball-game of interdependence in international and regional politics and positive connectivity with immediate neighbors. This will require changes in Pakistan’s foreign policy strategy that has, in the past, preferred closer economic ties, trade and security interaction with the far-away states in order to cope with the security threats from within the region of its geographic location. Now, Pakistan will be required to cultivate more active relations with the immediate neighbors for sharing energy and pursuing economic development and trade. This will give a major boost to Pakistan’s economy. The areas adjacent to the Corridor will experience a major economic uplift.
A series of Meetings of Joint Cooperation Committee (JCC) and Joint Working Group on Transport Infrastructure, Energy and Planning were held, followed by the findings and recommendations of Working Groups Meeting wherein a list of priority projects/Early Harvest Project (EHP) of Pak-China Economic Corridor (CPEC) have been finalized during 3rd JCC meeting which was held on August 27, 2014.
The first progress is on the long term planning: the outline for long term planning of China-Pakistan Economic Corridor has been prepared on the basis of understanding reached in the 2nd JCC meeting on the basic contours of the long term plan and experience in the context of economic corridor’s development. It identifies the key areas and major projects including spatial structure and functional zones, construction of an integrated transport system, IT connectivity, energy cooperation, industries and parks, agriculture development and poverty alleviation, cooperation in livelihood areas and people to people communications, financial cooperation etc. it has been agreed that the outline of the long term plan would be finalized at the earliest so that the long term plan should be inked by the end of July, 2015. It has been agreed to add tourism into the long term plan and the experts of both sides agreed to have further research in this regard. The two sides may discuss relevant trade and investment issues under CPEC. MOU and Outline of Long Term Plan are expected to be signed during the forthcoming negotiations.
10. Second progress is on Transport Infrastructure Projects: the salient features of progress on early harvest projects include CPEC transport planning, road map of future work and port related issues which are the key elements of Transport Infrastructure Projects. It has been agreed that further efforts are still required to increase the pace of work on implementation of Early Harvest Projects (EHPs) in rail and port sectors. Both countries are stressing the importance of sustainable development of the Gwadar Port and Balochistan region. The primary focus is on associating the local community in the development initiative at Gawader and building public ownership through social and economic development project.
11. Historically, Sea waters have always been used as a trade route since long and the modern trade has further enhanced the need of trade through waters. Pakistan being a gateway to the strategically important ‘Strait Of Hormuz’ in the Indian Ocean, blessed with hidden treasures and bordering two Islamic Republics, Afghanistan and Iran, has always been a centre stage for regional politics. The emergence of Gawadar Port as a vibrant regional economic hub has provided an opportunity to regional and extra regional powers to develop strategic and infrastructural connectivity with Gawadar Port. Geo-political environment is considered as important factor influencing the development of human society. The most critical element of the environment is the sea, which occupies almost three-quarters of the surface of earth.
12. The location of Gawadar port gives it two advantages; it is a warm water port making it available for operations throughout the year. Secondly it is to be a deep-sea port, which is a reality on the earth and allows large-scale trade and economic activity. Gawadar can be a trading point for all the countries, making it the maintenance and fuelling hub.
13. The construction of the Gawadar port has recently been handed over to china which has long term strategic interest in the port. The Chinese economy, which has been growing for past three decades, is expected to become the world’s largest economy in future. China has access to sea through its eastern border, which is connected to two main seas, the South China Sea and East China Sea. China has territorial disputes with many countries on small islands in both the seas. These conflicts have led to increasing militarization of both the South China Sea and East China Sea. Also the presence of US forces in the region especially the Strait of Malacca through which more than 80% of trade passes, risk has increased for the Chinese economy. They are planning to use the Gawadar port in case of a military threat or war in the region. “The United States will shift more than 70% of its naval fleets into Asia Pacific.
Third progress is on the Energy Sector: both sides have agreed on the developments relating to energy planning. A meeting of the energy planning expert group was held in the first week of August,2015 where discussions focused on Energy Development Plan, Guiding Principles of Power Planning, Power Grid Development, Short Term Power Planning Principles, Conditions and list of Priority Projects like Gaddani Power Park and other energy resources so as to reduce energy imports. There was agreement amongst experts that hydropower, domestic coal, wind power and solar power should be developed and utilized actively.
15. The list of priority in energy sector projects calculates a total capacity of 10400 MW of power generation in Pakistan at an estimated cost of $15,506 million. Both the sides have entered in to serious deliberations to evaluate return on the projects and risk management. The primary focus is thermal and wind power in order to put them in to operation by the year 2017-18. The hydro power projects are envisaged to be operational around 2020. The forecast of deliverables in energy and communication sectors have been agreed, and are out lined below:
a. Institutional capacity building in infrastructure and energy sector.
b. Long term plan of CPEC encompassing all development sectors including rail and road links.
c. Joint feasibility study of Havelian Dry Port.
d. Transmission lines to Lahore and faislabad.
e. Salt Range Mine Mouth power project.
f. KKH Phase-2 (Raikot-Islamabad section).
g. Karachi-Lahore Motarway (Multan-Sukkhar Section).
Pakistan’s leadership describes the CPEC as a game changer for Pakistan and the region at a total anticipated cost of USD 45 billion plus. However, the dividends of these projects will fully materialize gradually over a period of 10 to 15 years. It therefore requires a continued determination on the part of China and Pakistan to stay firm on the course.
The political determination to implement various aspects of the projects has to be demonstrated time and again so that the bureaucrats and others involved in its different phases do not slack. It is important to make sure that all Memorandums of Understanding and any new policy arrangements that may be agreed in the future by China and Pakistan, are implemented in their true spirit without any delay.

The writer is an Ex-COMSATS Islamabad student in Project studies. He can be reached at [email protected]

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