The CPEC Saga

Still much to do

Pakistani government needs to address the concerns of KPK and Baluchistan who feel that the eastern route would bring all the benefits for Punjab and Sindh which would aggravate the level of provincial inequality

China, once a sleeping giant, has over the years emerged as an alert economic player aiming to expand its presence in the region through trade. It’s One Belt and One Road (OBOR) project holds immense strategic significance. China aims to use the wool of trade to weave Asia,Europe, and Middle East in lucrative economic and social ties. With this ambitious project China envisions creating regional cooperation via trade diversification and hefty investments in infrastructure and energy sectors that would ultimately entail robust economic growth.

China’s foreign strategy which was once sans multilateral diplomacy has exhibited a major paradigm shift. This dramatic change has stemmed from China’s immensely increasing energy demands and its desire to emerge as the regional hegemon.

The OBOR project has three viable corridors that would expand China’s presence to Europe, Africa, and the Middle East. The Northern Corridor starts from Beijing, passes through Russia and goes up to the European cities. The Central Corridor starts from Shanghai, links her to Tashkent, Tehran and from there it goes to Bander Imam Khomeini Port of Iran on the Persian Gulf. One of its routes goes up to Europe as well. The Southern Corridor starts from Guangzhou in South Central China, connects Kashghar with Pakistan at Kunjerab Pass in Gilgit–Baltistan. From here China heads towards Gwadar Port and then straight into the Arabia Sea.

The southern route of OBOR holds significance for Pakistan as it will link China to Central Asia, Southern Asian Region and Middle East. Gwadar, which lies at the tail of the corridor, will gain China the shortest access to the Indian Ocean.

China Pakistan Economic Corridor (CPEC) is an offshoot of OBOR and the Silk Road initiative. This approx. $51.5 billion worth mega project shall be completed by 2030. Gwadar holds special significance in the CPEC saga.It is the world’s largest deep sea port which is considered a viable substitute for Dubai Port. Development of Gwadar port is imperative for the fulfillment of the China’s objective of getting a shorter and cost effective energy corridor. Currently China uses 12,900km long route from the Persian Gulf through the Strait of Malacca to get oil for its soaring domestic demand. Gwadar which lies near the Strait of Hormuz, is only at a distance of 2900km from Kashgar.

CPEC is the most debated topic these days,for reasons quite obvious.This energy corridor would establish and consolidate Chinese naval presence in the Indian Ocean, which is a signal to India that Indian Ocean is not India’s domain. CPEC provides riddance to China from the “Malacca Dilemma” which means an undisrupted and unchecked transfer of oil from the Middle East to Gwadar and then straight to Kashghar. American presence in the South China Sea can now be countered with Chinese presence in the Arabian Sea.

CPEC is situated at the crossroads of the Silk Road Economic Belt and Maritime Silk Road. Silk Road Economic Belt connects China with Central Asia,Russia and Europe whereas Maritime Silk Road connects China with Europe through South China Sea with Indian Ocean and South Pacific. CPEC is an ideal intersection between the two. It connects China with the Eurasian Heartland; the geographical pivot where America has been trying to consolidate its presence .It is a hub of hydro-carbon reserves. China gains easy access to the Central Asian markets where not only it can sell its products but could also fulfil its needs for alternate sources of energy.

CPEC is being touted as a game changer. There is no denying the fact that economic prowess determines worth in the comity nations. Whoever is economically stronger gets to call the shots. CPEC could certainly be a game changer only if the rules of the game are determined well ahead of the game. There is no denying the fact that China is investing a lot in CPEC. But it is also a reality that the entire amount would not flow in as investment, part of it would be granted as concessional loans.

What we need to realise is that China is not doing Pakistan any favour. China needs CPEC more than we do. We in fact have to bear a much heftier price for this mega project that would fulfil China’s unflinching desire to emerge as the regional hegemon.

There is already a lot of resentment among the provinces over the route that has been chosen for CPEC development. KP is disgruntled and is blaming it on the government for coaxing the Chinese government to opt for the eastern route, which would ultimately bring more benefits to Punjab. Provincial divide is the last thing we need at the moment, especially when India is bent upon derailing CPEC.

India is certainly not too happy with CPEC. They issued a map showing Gilgit-Baltistan as part of occupied Kashmir which is a strong signal that the immediate link between Kashghar and Gwadar lies in Indian territory. Japan signed up a nuclear treaty with India; Israeli president was in India recently and has signed two agreements for economic and military assistance. US is all ready to support India getting meatier against China. These are all the opportunity costs that Pakistan has to bear for getting on board with China.

Let us own the fact that the Pakistani government has not been able to act wisely. All the provinces should have been taken into confidence before signing pacts with the Chinese officials. Public should have been communicated about the course of action that he government planned on taking. There should have been more transparency regarding the amount of money that is flowing in and how it would be spent. There should be clarity as to how much of the money is coming in as FDI and how much of it are loans. The rhetoric that is being churned out is that this CPEC would change the fate of the country. Well guess what, people demand a little more explanation.

Exactly how it would change the fate of the millions is still an enigma. What is the guarantee that Chinese loans would not further tighten the noose of indebtedness?

So far what can be deduced from the previous Chinese models is that China invests in a country, insists the host country to import material from China, and hire Chinese nationals. So the investment in the host country leads to repatriation of profits and interest payments along with the principal amount back to China which inflates its GNP.

Same is being foreseen in Pakistan’s case. Balochis would not really be very happy to have Chinese nationals work on their soil, build their fancy colonies, bask under prosperity while the locals continue to live in abject poverty. They have already suffered a great deal at the hands of Bugtis and Marris, they cannot have any more of these imperialistic capitalists to add to their misery. So far it is the Balochi government that is spending on the security of the Chinese, while there is no employment of Balochis in the development process.

Gwadar is all functional now, if China and Pakistan want to it to stay functional; there are some things that need to be clarified so that the lingering suspicion is dispelled. There needs to be some guarantee taken by the Pakistani government that our nationals would get employment. When China claims that it would be investing in industry, they need to specify what industry they would be facilitating here. Because apparently CPEC is a corridor that would just facilitate the passage of finished products. But Pakistan can actually benefit by building massive warehouses here, which could recruit a lot of Balochis. Fish and marble industry in Balochistan could get a massive impetus as well.

Pakistani government needs to address the concerns of KPK and Baluchistan who feel that the eastern route would bring all the benefits for Punjab and Sindh which would aggravate the level of provincial inequality.

Spending $1.62 billion on Orange Line out of the CPEC kitty is anything but development expenditure.Three mega coal based energy projects and one solar power projects would be installed in Punjab whereas Baluchistan that has huge reserves of coal would have only one coal-based power plant. The proposed plan does not hold any significant prospects for KPK. The plan is bound to create regional disparities. Punjab that is already way ahead would get better at the cost of the development of KPK and Baluchistan.

Our government needs to realise that it is not just Punjab but all the five federating units that make up Pakistan. We should place our house in order before we allow the exogenous factors free entry into our domain. If the internal strife is not resolved, CPEC could just be the right catalyst to repeat 1971’s debacle.