CPEC – AN ECONOMIC GAME CHANGER

                                                                                           CHALLENGES AND WAY FORWARD

                                       

 Introduction

The China Pakistan Economic Corridor (CPEC) along with

other 5 corridors is a part of (OBOR) one belt one road initiative,aiming in infrastructural

development in more than 60 countries, and traverses across 3000 kilometers

approximately. It spans from Kashgar city of Xinjiang i.e atop of Himalayas down to

Arabian Sea, specifically southern Pakistan’s Gwadar.

 

CPEC is not merely connecting friendly neighboring countries with roads &

railways but promising hope for gigantic improvement in almost all the major sectors like

Energy, Information Technology, Socio – Economic Development, Industrial Parks,

Cooperation in livelihood areas, Tourism, Person to Person contact and Human

Resource management in Pakistan.

 Despite being full of gains, the recent terrorist attack that get killed many Chinese

worker clearly indicates that the enemies are out to fail this project, if they succeed it will

be a great disaster for our economy. To outcome this threat, the government must come

up with comprehensive security cover, ensuring fool proof security of Chinese workers.

The best response to such anti-CPEC ploys will be to further expedite the pace of

Project.

 

. Aim To discuss the challenges posed to CPEC and recommend way forwards.

 

. Sequence Sequence, I shall follow is as under :-

a. CPEC – An Economic Booster

b. Analysis - Popping Up Challenges

c. Recommendations for Analysis – Way Forward

d. Conclusion

6. CPEC – An Economic Booster. CPEC, a massive bilateral mega infrastructural

improve & construct project, not only appeared to be a catalyst for the economies

of Pakistan and China but also integrate the countries of the region. The

Infrastructural development will shorten the distance of China to reach Arabian

Sea from 16,000 kilometer to 5000 kilometers. CPEC is a worth 62 billion dollar

 

project to be completed in 4 difference phases and the 1 st phase is on brink of its

Completion.

 

 CPEC contribution in different sectors is discussed below  Energy It spans collaboration in oil and gas, thermal energy projects,

hydropower and renewable power generation projects. According to short

term and long term plans of CPEC, energy sector will be of major focus,

with approximately 38 billion dollars planned to be invested in the sector

with a target to add up to 11,000 – 13,000 MW in a national grid. By now

almost 10 x coal fired and wind farm projects have been completed that

generates approximately 9,000 MW.

Employments The CPEC employment might be one of the biggest

marvels of the Pak-China friendship. China-Pakistan Economic Corridor

(CPEC) through employment generation will help to address the

grievances of unemployed youth. As per an estimate by experts, it is

expected that an increase of about 2.3 million direct and indirect jobs shall

be generated between 2015-2030. As per recent data released by

Chinese Embassy, 80,000 jobs has been created with no forced

withdrawal.

 IT Sector - Digital Pakistan. China will assist Pakistan in its IT sector

especially in Artificial Intelligence (AI) in Phase II. With the launch of

CPEC, the installation of 820 kms of fiber optics is also in progress.

Enabling Pakistan for e-commerce & e-governance, electronic monitoring

of border and safe city projects. China will also build Information

Technology Park in Nust H-12 Islamabad with an investment of 1.5 billion

dollars.

 Gwadar port will change the faith of Balochistan. As Gwadar Port is

playing a focal role in this project, it will lead the progress and prosperity of

largest and most underdeveloped province of Pakistan: Balochistan.

Gwadar, being a hub port, has modern cargo facilities with 50,000 (DWT)

dead weight tonnage current capacity of port, that allow it to meet the

increasing challenge of the world of trades. Current developments at

Gwadar like international airport,

 

 Aparts from above mentioned major contribution is also being made in

tourism, agricultural development and poverty elevation, trade and

industrial parks and financial cooperation.

 

 Analysis – Challenges. The CPEC is associated with the national and

international geopolitics and is undergoing numerous vulnerabilities with regard to its

transparency and control to a path of sustainable development from internal (within

Pakistan) and external (out of Pakistan) powers. It is always important to gauge the

spectrum of internal and external threat, so that can be dealt timely.

a. External Challenges. These challenges ranges from prevailed the

unstable situation in Afghanistan, competing interest of immediate

neighbor like India and Iran, US concern about China’s growing

supremacy in the special Indian ocean. External challenges are

discussed as below:

i. India. Pakistan’s security analysts view India-Pakistan relationship

as a zero-sum game and, thus, believe India resists any kind of

improvement in Pakistan. India has denied to join the CPEC on

ground that it passes through the territory that is disputed between

Pakistan and India. The Indian leadership has objected the project

and Indian Prime Minister Modi even requested the Chinese

President during the former’s visit to China to abandon the plan.

Conservative political and security experts in India take the CPEC

investment as having negative geopolitical implications for India in

long-term. Second, the China-Pakistan relationship presents a

challenge to India’s desire to become a regional hegemon. To

counter the growing influence of China in the region, energy-hungry

India is investing in Iran’s port of Chabahar, 72 kilometers west of

Gwadar port, and plans to build a corridor through Iran and

ii.Afghanistan. The Pakistani leadership believes that India is

involved in funding and planning anti-state activities in Pakistan,

especially to disrupt the CPEC project. Arrest of Kulbushan Yadav,

an Indian naval officer serving in the premier Indian intelligence

 

agency, RAW, from Balochistan, proved Pakistan’s claims. The

Indian spy has confessed about Indian involvement in the

destabilization of Balochistan, Karachi, and KPK. Ehsan Ullah

Ehsan, who surrendered to the security forces on April 16, 2017,

has revealed the involvement of the Indian spy agency RAW in

funding and supporting the terrorist groups to destabilize the

Pakistan in general and CPEC in particular. In this current regional

environment, it appears that India will continue as a spoiler until it is

engaged proactively and integrated into the regional economic

framework.

 Afghanistan. The continuous uncertainty in Afghanistan and

its porous and unmanaged border could dent the security

environment in both Pakistan and the western regions of China.

Pakistani security officials view India’s RAW and Afghanistan’s

National Directorate of Security (NDS) joint collaborations behind

terrorist activities in Pakistan to delay and disrupt CPEC by creating

instability. The Uighur militants are demanding a separate ‘East

Turkistan’ state from China, considering themselves closer to the

Central Asian states. These terrorist groups have already attacked

and kidnapped Chinese workers and engineers in the past and

warned to further expand their operations against Chinese

interests. For China, security and stability in Afghanistan are

equally important for its massive investment in the region. China is

acutely concerned as a destabilized Afghanistan can affect China’s

western Xingjian province, a key stakeholder in the materialization

of CPEC.

iii. Iran. Initial response from Iran to CPEC flashed that it was

apprehensive about the development of Gwadar as a deep-sea port

and took the project as a rival to its Chabahar port in the mouth of

the Strait of Hormuz, built with Indian assistance. However, Iran

realized significance of CPEC and has shown its desire to be part

 

of CPEC. Iran has also invited Pakistan to join the Chabahar Port

trilateral agreement and also assured Pakistan that “Chabahar is

not a rival to Gwadar.” On the other hand, security analysts believe

that Saudi-Iranian enmity could obstruct the improvement in

Pakistan-Iran relations. While Pakistan needs Iran to fulfil its energy

requirements, Pakistan cannot risk isolating itself from the Saudis

by moving too close to Iran.

iv. United States. Contrary to the common opinion in Pakistan,

the U.S. government has not opposed CPEC and its desire to see

the CPEC as a multilateral project is an encouraging sign.

However, the United States is aware of the apparent strategic

consequences of the CPEC project. Chinese development of

Gwadar port may face the U.S. government’s opposition as

operational control of the Gwadar port gives clout to Chinese naval

power in the Indian Ocean, a potential threat to the supremacy of

U.S. naval forces currently enjoy in the Indian Ocean. Outwardly,

the United States is encouraging and supporting Indian naval

power to counter the growing Chinese influence in the Indian

Ocean. On the other hand, cooperation in Afghanistan has been

one of the high points in U.S - China bilateral relations in recent

years as the United States fears Russia regaining its control of its

former states—the CAR states—in the post NATO withdrawal

scenario.

 

. Domestic Constraints The internal security situation and the lack of

political consensus in Pakistan are the two main challenges that may

impede the completion of the CPEC project. If not dealt aptly, these

impediments can affect national development and Pakistan’s economic

integration in the region as envisioned for CPEC.

i. Internal Security. The major security apprehensions in Pakistan

today are: religious extremism perpetuated by Taliban militants in

the tribal areas and KPK, sectarian and ethno-political violence in

 

the metropolitan city of Karachi and Quetta; a separatist insurgency

in Balochistan, fueled by foreign anti-state forces; provincial

infringements and the law and order situation. Security analysts

expressed that foreign funded extremists can target the CPEC-

related projects. In addition to the external terrorist threats, various

anti-state local terrorist groups such as TTP, JuA, Lashkar-e-

Jhangvi (LeJ), the Balochistan Liberation Army (BLA), the

Balochistan Liberation Front (BLF), are looming threats to the

Pakistani state. The local population of Balochistan has old

grievances about political and economic deprivation. Balochs fear

that outsiders will come in and turn the native Balochs into a minority

and also they have kept eye on their rich land resources of

Balochistan. The sentiments has always been exploited by

insurgents, and these insurgents oppose any developments and

have attacked many Chinese nationals in the past. They have

frequently blown up gas pipelines and trains in order to deter the

non-local investors in general and Chinese developers in particular.

In April 2015, Baloch militants killed at least 20 non-local laborers in

the remote town of Turbat, Balochistan, a week prior to the Chinese

president’s visit to Pakistan. Hence, it becomes a real challenge for

Pakistan not only to root out these terrorist groups and their

infrastructure but also to unearth their supporters, sympathizers and

facilitators across the country.

ii. Political Dynamics. Political hurdles within Pakistan can also

derail the execution of the CPEC project. Though, there is an

accord of major political parties in Pakistan on the benefits of CPEC

and all political parties pledged their political ownership to CPEC.

Still, there is a political controversy among various parties mainly

on the selection of the route and the allocation of the resources

related to the CPEC project. Underdeveloped provinces like Khyber

Pakhtunkhwa and Balochistan accuse the federal government of

 

changing the original route on the pretext of security, which would

only benefit more developed Punjab. History reveals that political

gains take precedence over national interest, and issues like

allocation of funds have always been politicized. Moreover, the lack

of limpidity and confidentiality in assigned deals is yet another

concern, which has elevated worries among political parties and

other stakeholders who have demanded the government to make

all CPEC-related agreements public.

 

Recommendation – Way Forward

 Diplomatic Domain. Regional alliances are changing rapidly, that

have changed regional dynamics. Hence, Pakistan and China must follow

the developing geopolitical situation and modify their strategies

accordingly to respond meritoriously to the implementation of the project.

By mutual trust and support, Pakistan and China may succeed to face the

potential obstacles, formed by the regional environment. Nevertheless, in

the long term, success of CPEC is not only limited to the bilateral actions,

but also to China and Pakistan’s diplomatic policy in gathering support and

cooperation from regional countries. Diplomatic efforts through the

process of dialogue should target to highlight the economic dividends of

CPEC for the whole region.

India. India being the almost open rival of CPEC has to be

dealt rationally, the potential may be extended to India through

Punjab and Sindh via the eastern corridor. Accommodating India in

the CPEC and allowing it to play an active role is likely to change

India into an essential stakeholder, ensuring the success of the

project. CPEC can also help bring about the much awaited Iran-

Pakistan-India gas pipeline, addressing India’s energy needs. The

mutual inter-dependency thus developed will result in an improved

security situation and economic integration benefiting not only India

and Pakistan but the whole of South Asia. Similarly, Pakistan

should also use the platforms of the SAARC and the SCO to follow

 

incorporation of India into a cooperative regional economic

framework.

Afghanistan. Both Pakistan and Afghanistan, instead of

accusing each other of creating instability in their respective

countries, both countries should pursue a solution to their mutual

differences through dialogue. They must address common issues

such as cross-border terrorism and smuggling through better

border management. Pakistan should continue to encourage

Afghanistan not to let any state or non-state actor use its country

for disruptive activities against Pakistan and pledge the same to it.

The positive Chinese role in Afghanistan to achieve political

reconciliation and stability could in turn also contribute in boosting

Pakistan-Afghanistan diplomatic as well as economic relations.

Iran. Since the economic sanctions on Iran have been lifted,

Pakistan and China need to integrate Iran in the economic projects

for the mutual benefit of all the involved stakeholders. Iran’s support

of CPEC would result in improved mutual interdependence and

shall promote regional stability. Throwing away the regional

proxies, Pakistan should proactively work to complete the

Iran–Pakistan gas pipeline. Iran has almost concluded the job

inside Iran up to Pakistan’s border with an investment of $2 billon.

With the beginning of this new economic alliance Iran can give

surety to Pakistan to assist in its stability by denying Iran’s soil for

Indian activities in Balochistan.

United States. Though role of US seems to be neutral, yet

Pakistan should play its role in regional and global harmony

through balanced and positive diplomatic engagement with both

China and the United States. The CPEC platform is the right

opportunity to foster trilateral cooperation among the United States,

China, and Pakistan. The U.S. government can also help Pakistan

 

by encouraging and providing incentives for U.S. firms to invest in

Pakistan.

 

b. Domestic Domain. Definite success of the CPEC is directly

proportional to timely completion of the project, to reap the factual benefits

of economic prosperity, stability, and an improved quality of life for its

people, Pakistan must keep its house in order for timely implementation of

the project.

Internal Security. Because the paybacks of CPEC are related to

its timely completion, internal peace and stability are thus

significant for successful implementation of the project. To deal with

the security situation permanently, the federal government, with the

help of provincial governments and security agencies, must

religiously implement the strategy involving both hard and soft

powers. Civil law enforcement agencies (FC and Ranger) can now

manage the CPEC-related security with the help of a dedicated

security apparatus for that purpose. However, for inter service

collaboration fusion cells need to be established along the routes

depending upon the intelligence gathering of specific area. Swift

intelligence sharing and quick responses will enhance the overall

security environment by engaging local and foreign supporters,

facilitators, sympathizers, and financiers of the terrorists. Moreover,

Provision of incentives to locals and making the local people

stakeholders in the project would result in a secure environment,

leading the success of the project.

Provincial Accord. CPEC shall be declared as a national

entity, the government must take special steps to address the

grievances of smaller provinces that feel downgraded, especially

KPK and Balochistan. To oust the negative opinions and fears

relating to the project, the federal government should also address

the honest concerns and grievances of the local population in

Balochistan. The local populace in underdeveloped areas such as

Balochistan and Gilgit-Baltistan should be offered special incentives

in the project to embrace them into the national mainstream.

Government should ensure representation of all the provinces,

including Gilgit-Baltistan, as part of the decision-making body to

make the process transparent. Any attempt of favoritism in the

process shall be all out dejected. Also an effective observing and

implementation body is required to strictly scrutinize the project’s

implementation, ensuring timely completion with no compromise on

quality of all the projects.

 

 Conclusion CPEC brings a new kind of China-Pakistan cooperation with

the potential to further fortify the two countries’ political and economic relationship. The

project has strategic and economic significance for South Asia in general and both

China and Pakistan in particular. The projects worth US 62 billion dollars provide an

opportunity for Pakistan to address some of the main problems to its economic growth,

such as the narrow foreign investment, energy crisis and poor communication

infrastructure. CPEC may bring peace and stability to the country in general and

Balochistan in particular through socio-economic development. Despite the significance

of CPEC, the project is facing various internal and external challenges. The success of

the project particularly depends upon regional geopolitical issues, especially India’s

place on the project and Afghanistan’s instability and its effects on Pakistan. Internally,

Pakistan needs to deal with security challenges and political/ provincial grievances with

regards to route selection, which may hamper the implementation of the project.

Nonetheless, in the long run, timely and transparent implementation of the CPEC

project has the potential to elevate the socioeconomic condition of Pakistan and the

region.