You are on page 1of 34

Governance indicators suggest that deep structural changes are needed to

unleash the growth potential. Constitutional supremacy needs to be adopted


amidst the logjams that have substantiated the course of development. It is
clear that internal and external security threats have weakened Pakistans
economic edge but if the right mechanism for governance is adopted, there
is much reason and hope that Pakistan can soon see itself catapulted from a
developing state to a developed nation.
Historical accounts suggest that then people of Hunza State and its rulers
managed cross-border relations with strong state diplomacy. Even though
Hunza was an autonomous state, with its envoy stationed in China, yet it
depended on China for a number of reasons, so it remained regular taxpayer
to China for several decades. Today, Pakistan has good ties with China,
thanks to then rulers of Hunza who remained peaceful and made the border
a symbol of friendship and peace rather than acrimony. When Pakistani
democratic government dissolved Hunza State in 1974, all diplomatic powers
were shifted to Islamabad from Hunza.
The Chinese presidents recent, historical visit to Pakistan is considered a
game-changer, with the initiation of a sustainable economic era. The PakChina Economic Corridor is Pakistans fortune-changer, but sadly the most
important stakeholder has been left out of the huge project. Gilgit-Baltistan,
a region deprived of fundamental rights and through which the CPEC would
pass, has been given little say in the project.
But development consultant Izhar Hunzai, who also belongs to the area, has
no such expectations. The CPEC, he feels, is nothing more than a black
hole as far as the people of the region are concerned.
1. The government has not engaged with us; we do not know exactly
how much or what Gilgit-Baltistans role will be in CPEC or how we will
benefit from it, he said. While both Pakistan and China will benefit
through this region, he feels his people will be left selling eggs.
2. I fear when the region opens up, it will give short shrift to the locals,"
he added. However, the government is almost ready to revive the
Diamer-Bhasha dam, a gravity dam on the Indus river in GilgitBaltistan, in the second phase of CPEC. Once completed, it is estimated
to generate 4,500MW of electricity, besides serving as a huge water
reservoir for the country.
3. Hunzai also lamented the governments decision of buying discarded
coal powered plants from China and using imported coal to run it.
Doing some quick calculations on the back-of-the-envelope, he asked,
Why produce 22 cents per unit electricity from imported fuel and sell
it to the people at a subsidised rate of 15 cents? Why not make
electricity from hydropower which would cost just 0.02 cents?

4. According to the ADB, Gilgit-Baltistan has the potential to produce


nearly 50,000MW of energy. Just Bunji Dam, a run-of-the-river project
that the ADB has invested in, has the capacity to generate up to
7,100MW electricity when completed.
5. In a deal like this emotions have to be set aside. There is no doubt that
China has been a strong and constant supporter of Pakistan throughout
our history. But it should also be clear that when it makes investment
decisions such as the proposed $46 billion CPEC it makes them in the
cold light of its self interest as one would expect from any
responsible nation. And as a responsible nation, conscious of its
sovereignty and self-respect, Pakistan should also apply the same
standard to its assessment of the project.
6. Clearly the advantages of the CPEC are many, significant, and
undeniable. But are there any aspects that may be detrimental to our
interests in the long term? The first issue that comes to mind is
sovereignty.
7. By leasing out vast tracts of land in the city of Gwadar and all along
the route of the corridor, we in fact transfer sovereignty of some of our
territory to a foreign power. And this is no ordinary foreign power.
China is an emerging superpower with global ambitions. Have we built
into the deal the necessary safeguards that will allow us to retain
control of our territory if circumstances change?
8. It is proposed that most of the construction work will be done by
thousands of Chinese workers. Does this make sense for Pakistan given
widespread and painful unemployment? Would it not be in our interest
to have Pakistanis do the work? Should contracts not include provisions
for contractors to train and employ Pakistani workers and engineers?
9. As a global manufacturing powerhouse China plans to bring all or most
of the equipment it needs for projects from its own suppliers. But
would not our interest be better served if we insisted on having
equipment made in Pakistan? Part of the proposed investment should

be diverted to setting up factories inside Pakistan to supply the diverse


range of equipment and machinery to the various CPEC projects.
10.
Have we asked the right questions in regard to the financing?
Forty-six billion dollars is a lot of money. Is it a grant or gift to Pakistan?
Is it a loan? If the latter, what is the payback period and the applicable
rate? What happens if there is a default? Have the tariff rates payable
to Pakistan for use of port facilities, road and rail links, and oil and gas
pipelines been established and agreed?

11.
Demographic shift : There is also the fear that the CPEC may
lead to widespread displacement of the locals. Of the 73,000 square
kilometres, cultivable land is just 1pc," Hunzai explained. "If that is also
swallowed by rich investors from outside, we will become a minority
and economically subservient once there will be no farmland or
orchards left to earn our livelihood from."
12.
Along with trade corridor other multibillion-mega projects
agreement have been signed in the sectors of economic and energy
development. In the celebrity celebration of no G.B constitutional
cabinet members are again constantly ignored despite to knowing the
realities that Gilgit-Baltistan is the gateway of Pak- China relation and
more than 600 kilometers KKH route cross over this territory.
13.
In china highest income generator is regarded winner and
revenue generation from foreign is considered hero, on this revenue
generating strategic approach China has connected railway line from
central Asian 1990 for the easiest transportation oil and gas to the
country. For this regard China constructed 761km long distance pipe
line from Kazakhistan by China National Petroleum Cooperation (CNPC)
to reservoir of oil and gas to manufacture variety of domestic and
international stander products to use its cheapest labors cost.
14.
In the second target of China republic is supply its products to
Europe and USA through China-Pak economic corridor.
15.
G.B allied with Pakistan without any certain agreement because
of religion belief and brotherhood but it causes much political right
discrimination from that day. Federal government is gain used to away
Gilgit-Baltistan from the biggest agreement on Pak-China trade
corridor. It would be first democratic struggle for regional leaderships
to get maximum advantage for the G.B economic development
through this big agreement. Inhabitants of the region are more curious
to know!

16.
What is Gilgit-Baltistan stake pre and post construction
of the trade corridor?
17.
What will be the economic benefit for the GilgitBaltistan from the economic trade corridor?
18.
What will be key administrative roles for Gilgit-Baltistan
to implement the project?
19.
What will be the special quota for the employment
sector for Gilgit-Baltistan in the biggest project?
20.
Does G.B elected government and opposition leadership
are being ever viewed the pre and revised agreements of PakChina trade corridor whether it address the economic
challenges of G.B or not?
21.
However it is very important for leaderships to restructure
practices rather than to get federal government sympathy and
appreciation. It is the time for the political figures to work in a real
essence of political domain to seek and address the fundamental
rights.
22.
He is not the only one. Given the secrecy and confusion
surrounding the project, its design and its budgetary allocation, three
of Pakistans four provinces recently held a well attended All Parties
Conference (APC) and vented their anger at the central government for
its opaqueness regarding the share of investments for each of the
provinces.
23.
CPEC is not the problem. It has just highlighted the imbalance in
provinces with the largest one, Punjab, being seen as favoured
specially as far as investments on road infrastructure are concerned
and fueling bitterness among the rest of the three provinces, rued
Vaqar Zakaria, an energy expert heading Hagler Bailley.
24.
Trying to address the concerns of the provinces soon after the
APC, federal minister for planning, Ahsan Iqbal, who heads the
Planning Commission of Pakistan, said in a television interview that this
was not a time for scoring political points by making the project
controversial. CPEC, he said, was not a project to benefit a party or a
government as was being portrayed by politicians and the media but to
the
entire
country
25.
Of the US $46bn, between $35bn to $38bn were
earmarked for the energy sector of this, $11.6bnwill be
invested in Khyber Pakhtunkhwa, $11.5bn in Sindh, $7.1bn in
Balochistan and $6.9bn in Punjab.
26.
Beijing has urged Islamabad to resolve the internal
differences on the CPEC to create favourable working
conditions for the project to roll out smoothly.

ZHANG Yuan is a Ph.D student at the School of International studies, Peking


University

During Chinese Prime Minister Li Keqiang's visit to Pakistan in May 2013, the
construction of China-Pakistan Economic Corridor was put on agenda after
both the sides agreed to launch a long-range plan. In July, the two countries
formally signed an agreement to build the corridor which according to
preliminary planning, would link the two neighbouring countries straight from
Kashgar in Xinjiang Province to Gwadar Port. Special Economic Zones will be
established along it. The whole investment will cost about $18 billion.
Highways, railways, oil and gas pipelines, cables will be simultaneously built
in the region, named a four-in-one channel focusing on trade and energy
fields. The corridor has been strongly commended economically and geostrategically, and regarded as the fifth major energy channel across China.
Strategic energy cooperation between the two countries had been
implemented before the proposal of the conception of the corridor. During
the former Chinese Prime Minister Wen Jiabao's visit to Pakistan in December
2010, the National Energy Administration (NEA) of China and the Ministry of
Petroleum and Natural Resources of Pakistan issued a memorandum of
understanding on the establishment of energy working-group mechanism.
The first meeting of this group was held in August 2011, during which both
sides had a thorough exchange of views on the development of electricity,
coal, oil, gas and new energy industries. A cooperative programme was
generated to help Pakistan alleviate energy shortages at the second meeting
in Pakistan in May 2012. The group was absorbed in the framework of ChinaPakistan Economic Corridor in 2013. At the third meeting in January 2014
both the countries reached consensus on nuclear power, electricity, coal and
renewable energy, and agreed to set up a research team to promote energy
cooperation for the construction of China-Pakistan Economic Corridor, mainly
including coal exploitation, oil and gas extraction, mining and transportation,
electric wire net arrangement, etc.
The Significance of the Economic Corridor for Chinas Energy
Strategy
Energy is an important geopolitical commodity influencing a country's
national security, sustainable economic development and social stability
directly. As a major energy producing and consuming country in the world,

China is now facing four risks in energy security. First, there is an obvious
conflict between energy supply and demand, low level of protection and
heavy dependence on external sources in China. Second, the existing
monopoly of international energy resources by the West makes it more
difficult for China to acquire overseas energy, or to pay more bills for it.
Third, the future of the international energy market will be more uncertain
because of the dominant role of developed countries in the establishment of
energy market mechanism. Fourth, the energy price is overall in the upward
trend. It is the same situation in Pakistan. China-Pakistan Economic Corridor
will be a good approach for addressing these problems in the common
interests of both sides, which means acquiring energy safely and steadily,
and shifting to a low-carbon, environmentally friendly energy system
appropriately.
The Significance of China-Pakistan Economic Corridor for Chinas
Energy Strategy is Summed up in two points.
Firstly, the corridor will favour increasing energy import channels. At present,
oil from the coast of Indian Ocean accounts for nearly 80 percent of the
whole import of the same commodity in China. Pakistan has an important
geo-strategic position - it is located in the south of Iran, north of the Indian
Ocean, east of the Arabian Sea and the Red Sea, which serves as a bridge
leading to the Indian Ocean, the Middle East and Africa. It is also close to
several energy producing countries like Turkmenistan, Uzbekistan,
Kazakhstan, Russia, and neighbouring two emerging energy consuming
countries - China and India. As an excellent deep-water port, Gwadar is 400
km away from the Strait of Hormuz and about 500 km away from Karachi,
the most developed industrial and commercial city in Pakistan. Oil and
natural gas from Iran may soon flow to China when the corridor opens up,
greatly decreasing Chinas dependence on energy imports from the Indian
Ocean and getting rid of Malacca dilemma. Energy products imported from
Africa and the Middle East can also be directly transported to northwestern
China from the shore of Gwadar. Transportation costs and time will be greatly
reduced compared to importing from southeast coast of China. If the oil and
gas pipelines between China and Pakistan connect with those in Central Asia,
India, Burma and Bengal, China will get benefits from the whole transnational
transportation system on land.
Secondly, the corridor will create a new opportunity for energy cooperation
between the two countries. With the energy cooperation becoming a current
trend, bilateral and multilateral cooperation is recommended in varying
degree among energy producing and consuming countries in the world.
Chinese enterprises have explored nuclear energy and hydropower market in

Pakistan since the late 90's. China was responsible for the construction of
Chashma Nuclear Power Complex in Punjab. Several companies, Sinohydro
Group Ltd., and Dongfang Electric Corporation (DEC) as the representatives,
have taken up multiple hydropower projects. With the development of the
corridor, the existing cooperation in nuclear energy and hydropower projects
will be boosted and other cooperative areas will be expanded.
Pakistan is adequate in natural gas. According to an investigation by the
British Petroleum Company (BP), natural gas achieves 22.7 trillion cubic feet
by the end of 2012, accounting for 0.3 percent of the world, distributing in
Baluchistan Province and Karachi sea area. Coal reserves amount to 198.2
billion tons mainly in the province of Sindh, Baluchistan, Punjab and Khyber
Pakhtunkhwa in 2007, ranking 7th in the world. A report from Energy
Information Administration (EIA) of America mentioned geological reserves of
shale oil to be discovered in Pakistan would reach 227 billion barrels, with
technically recoverable resources of 9.1 billion barrels, ranking 8th in the
world. Geological reserves of shale gas to be discovered reach 586 trillion
cubic feet, with technically recoverable resources of 105 trillion cubic feet,
ranking 18th in the world. They are distributed in the Sembar and Ranikot
group of Indus River basin. In addition, Pakistan has rich resources of wind,
solar and biomass energies.
Feasibility Analysis of the Economic Corridor
Construction
The good political relationship and robust economic cooperation between
China and Pakistan have laid a foundation for the implementation of the
corridor. The two countries have been close friends since the establishment
of their diplomatic ties, beyond different ideologies and national institutions,
regardless of the domestic and international political changes be it in the
Cold War period or in the post Cold War era. The economic cooperation
mainly referred to economic assistance during the Cold War. In fact, the two
countries have some complementarities in resource structure and the level
of economic development. Besides commodity trade, both the countries
have carried out various forms of cooperation such as joint venture running,
project contracting in recent years. More and more Chinese companies have
invested in Pakistan. Cooperation in machine manufacturing, textile, mineral
resource exploitation, telecommunication and financial industries between
the counties shows a great potential.
But undeniably, the construction of China-Pakistan Economic Corridor is also
faced with some difficulties and challenges.

The construction and maintenance of the corridor cost a lot, both


economically and technologically. According to the plan, new cross-border
railways and oil pipelines will be built on the existing Karakorum highway,
through the Karakoram Mountains and Pamir Plateau in complicated natural
conditions for a distance of 3300 km. Limited by weather conditions, the
Karakoram highways cannot be used half the year. The construction and
maintenance of cross-border railways will cost more than that of highways,
and massive complex technical obstacles need to be overcome in the
process of building oil pipelines.
Terrorist organizations and local forces in the territory of Pakistan may cause
damages to the corridor. The area through which the corridor passes, such as
Khyber Pakhtunkhwa and Baluchistan, is an internationally recognized
breeding ground for terrorism. The Baluchistan Liberation Army (BLA) has
always carried out activities against the governmental military. Tribes in the
area had clashes with the central government several times due to the share
of energy resource profits. The Taliban or other extremist groups may also
destroy the corridor. Security situation has become a vital factor restricting
the achievement of corridor.
A complex international political situation may also develop. Because the
corridor construction will improve the energy cooperation between China and
Pakistan, while affairs in South Asia, Central Asia, the Middle East and
America are involved in whether some powers express concerns or are giving
pressure on the corridor, is worth discussing.
Domestic opposition or public opinion may have a negative impact on the
construction. Some Chinese scholars doubted the authenticity of "Malacca
dilemma". That is to say, if a power has the military ability to block the Strait
of Malacca in wartime, it can also interfere with Gwadar Port. Furthermore, it
is difficult to maintain a long-term construction because of the limitations of
capital from China and poor economic performance of Pakistan. Oppositional
media in Pakistan discussed the large economic gap between the two
countries, causing China to win much more or even give nothing to Pakistan.
Conclusion
Bilateral strategic partnership between China and Pakistan in the new era
means a lot. The China-Pakistan Economic Corridor will play a significant role
in Chinas energy arrangement. From the domestic perspective, the corridor
will be favourable for promoting the interaction of Western China, inherent
with the Western Development Strategy and the political and economic
reform process in the country. On the international level, the corridor will

help China to strengthen political and economic connections with South Asia,
Central Asia and the Middle East in the coming decades. In spite of
difficulties and challenges, the significance of corridor cannot be simply
ignored. The key point lies in fully assessing the risks of construction,
carefully making risk-avoiding programmes and putting them into effect
early.

Dr. Siegfried O. Wolf is Director of Research at the South Asia Democratic


Forum (SADF). He was educated at the Institute of Political Science (IPW) and
South Asia Institute (SAI), both at Heidelberg University. Additionally, he is a
senior researcher in International Relations and Comparative Politics at SAI
as well as a former research fellow at IPW and the Centre de Sciences
Humaines (New Delhi, India). Before starting his academic career, Dr.
Siegfried O. Wolf worked for various consultancies specializing in political
communication, e.g. promoting the interaction and cooperation between
academic, political and economic spheres. He is the co-author of A Political
and Economic Dictionary of South Asia (Routledge: London, 2006), and
Deputy Editor of the Heidelberg Papers in South Asian and Comparative
Politics (HPSACP). Furthermore, he has worked as a consultant for the
Federal

Ministry

for

Economic

Cooperation

and

Development

(BMZ),

Germany.
What do you think the benefits of the China-Pakistan Economic
Corridor are?
The China-Pakistan Economic Corridor (CPEC) is a significant part of a
regional initiative led by China, known as One Belt, One Road (OBOR) or the
New Silk Road Economic Development Corridor. Basically the OBOR plan
aims to revive ancient trade routes connecting Asia with Europe and Africa.
This was a vision of Chinese President Xi Jinping in 2013. Since its
announcement Xis vision has made headway and has become a major focus
of Chinese diplomacy. Led by Beijing, the OBOR concept refers to two
ambitious development proposals the Silk Road Economic Belt (SREB) and
the 21st Century Maritime Silk Road. The SREB seeks to revive the ancient
Silk Road that once connected China with Europe by land via high-speed
railroads, highways, energy and distribution networks, as well as fibre optic
networks. The CPEC must be understood as a crucial part of the Chinas
OBOR initiative aiming at the establishment of an overland Silk Road
Economic Belt and the Maritime Silk Road through Pakistani port facilities.

Praised as a new economic lifeline, the CPEC is supposed to provide the


essential link between the land based belt and the sea road. In order to do
so, the CPEC will connect Kashgar in Chinas Xinjiang Uygur Autonomous
Region with Gwadar Port on the Balochistan coast in Pakistans south-west.
According to the plan, the CPEC will be implemented through a 1+4
cooperation structure: the Economic Corridor at the center and the Gwadar
Port, energy, infrastructure and industrial collaboration as the four key areas.
In order to operationalize this endeavor, the corridor is a combination of
cross-sectional components: Infrastructure, trade, connectivity, transport,
energy, services among others. More concrete, it consists of different
infrastructure measures foremost roads, railways (supposed to complement
the road network), and pipelines for oil & gas, the upgrading and extension
of Gwadar including construction of an international airport and a hospital. In
this context, besides building complete new elements to create connectivity,
major upgrades of existing, but outdated infrastructure system, is required.
Besides infrastructure the major focus will be on the increase of energy
capacities including renewable and non-renewable namely solar, wind,
hydro-power (dams) and coal. Through the planed pipeline projects it is also
expected to improve the imports of gas and oil. Additionally, all the projects
are flanked by substantial security measures to guarantee a secure
environment for the CPEC development. As such there are hopes, that the
CPEC helps Pakistan to boost its economy, uplift the social conditions for the
people nationwide-, lead to more political harmony within the country and
improves Pakistans role and position in the region. Furthermore, it is
expected that a successful implementation of the CPEC project will increase
regional connectivity and cooperation and subsequently also the neighboring
countries are benefitting from the new economic corridor.
What are Pakistans interests in developing this corridor and how do
you think it will impact the country?
From an economic point of view, Pakistans main interest is to attract foreign
capital. Islamabad hopes, when the respective CPEC projects are getting
successfully implemented, the infrastructure and energy situation will

improve leading to positive spill-over effects on all other economic sectors.


Through the identification of economics nodes located in established
industrialised-urban centers as well as disadvantaged rural areas, serving as
center for trade and production, a nationwide economic boost is expected,
also in Pakistans poorer provinces. Furthermore, Islamabad hopes that the
problem of unemployment, lack of know-how, and insufficient use and
unfortunate structure of trade capabilities will be addressed. Having this in
mind, the CPEC might also initiate an impetus to reverse negative processes
of brain drain and capital flight which is at the moment at a remarkably high
level. Regarding this rationale, the CPEC could have positive ramifications in
the form of changed mindsets: On one side among educated youths abroad
as well as those planning to leave the country trying to get them
(re-)engaged in Pakistan, and on the other side to convince non-state
investors to provide venture capital. In the context of Pakistans overall
financial indicators there are hopes that the foreign exchange reserves will
increase significantly.
Another crucial aspect is Pakistans search for a diversification of its foreign
aid- and investment portfolio. Traditionally the US financial support was the
major source for inflow of financial assets. However, the provision of capital
by the US (as well as by Europeans) is usually linked with political conditions
or prerequisites. After the US-Pakistan relationship turned again sour and
Washington is reducing its engagement in the region (subsequently losing its
interest in Pakistan), Islamabad is looking for a replacement for US money.
There are no doubts that the above mentioned tremendous economic
opportunities have also significant far reaching political and social impacts.
These include among others following expectations: Firstly, the harmonising
of the relations between the different provinces as well as improving centrestate

relations.

Secondly,

the

notion

that

successful

(complete)

implementation of the CPEC will improve the credibility and capacities of the
(civilian)

government

and

as

such

strengthen

processes

of

(good)

governance. Thirdly, it could lead to a new international positioning and


regional standing of Pakistan based on the emergence of a new economic

self-confidence. Having this in mind, Islamabads decision-makers are


aiming to overcome the countrys regional diplomatic isolation and a
subsequent improvement of economic and political cooperation with
Afghanistan, Iran, Central Asian States and Russia.
Finally, one can state that the forecasted extraordinary growth of the
countrys economy has momentous positive ramifications for the social uplift
of the common people. In this context, there are tremendous hopes that the
subsequent improvement of the living conditions will also help to contain
political radicalization, Islamisation, militancy, and jihadism. Or in brief, the
CPEC might help to make Pakistan terror free.
What are Chinas interests in developing this corridor and how do
you think it will impact it?
China is convinced that because of the security problems, Pakistan is in need
for major development projects to bring stability to the country. In Beijings
perspective, these will not only protect Chinese economic interests but also
reduce the terrorist threat towards China originating in Pakistan. Beijing is
convinced that sustainable economic prosperity in Pakistan will help to
contain terrorism which challenged in the past Chinese economic interests,
territory and security too. In other words, aims to eradicate the threat of
Pakistan as a launch pad for anti-Chinese activities as well as to protect its
economic interests in the country. Therefore, China demands a clear
Pakistani commitment and concrete activities to protect the sovereignty and
territorial integrity of the Peoples Republic as well as its citizens on Pakistani
soil. Namely, to undermine all efforts from Pakistan-based terrorists and
separatists to destabilize mainland China, foremost Xinjiang province.
Furthermore, Beijing expects that Pakistan continues its diplomatic support
for its one-China policy.
Besides this, the land-based CPEC provides China with another access route
to the Indian Ocean and allows to by-pass the Malacca straits to reach Africa
and the Middle East which could be blocked in times of tensions. The
increasing severe tensions in the South China Sea are exemplary for the

likelihood of such a scenario. This so called Malacca-Dilemma for Beijing is


gaining significance if one takes into account that around 80 percent of
Chinese energy imports flow throw the Malacca route.
China hopes that the CPEC gives not only Pakistan an economic boost but
also too Chinas slackening economy, especially in its western, landlocked
province Xinjiang. The project should help to bridge the imbalance in
development between the prosperous eastern and underdeveloped western
part of China. Beijing expects that with an improvement of the economic
conditions in Xinjiang, the whole western periphery will be also politically
more stable, one of Beijings top domestic security priorities. Against this
backdrop, China expects that because of an improvement of the economic
conditions in Xinjiang, the whole western periphery will also stabilize sociopolitically and subsequently help undermine the three evils in China:
Separatism, terrorism religious fundamentalism.
Do you think the socio-political and/or the security landscape of
Baluchistan will detrimentally impact the China-Pakistan Economic
Corridor?
The lack of security is worrisome. Among many others, there are two major
challenges towards the implementation of the CPEC: As already indicated,
Islamist militancy in its domestic and global dimension and the unrest in
Balochistan province. Due to the fact that Gwadar port as the central piece
of the CPEC is located in the province of Balochistan, the ongoing insurgency
in the province determines the most crucial challenge for a successful
implementation of the CPEC project. In this context, it is important to note
that the Baloch people have had strained relations with the Pakistani state
since its inception. Feeling militarily oppressed, economically exploited and
socially and politically marginalized, the Baloch people have been involved in
several armed upheavals against the central government.
One major flashpoint is, that despite being rich in energy and mineral
resources, as well as strategically well placed, Balochistan remains as the
countrys least developed and industrialised region with the lowest level of

literacy and income with over 52% of the population living beneath the
poverty line. Having this in mind, the Baloch insurgents identify the CPEC as
a foreign occupation of their homeland and an attempt to marginalize the
native Baloch people in the name of economic development. Furthermore,
the Economic Corridor is seen as Punjabi expansionism and a strategy by the
central government to strengthen their grip over Baloch resources. As such,
concern is rising over speculation that the project will benefit only Islamabad
and serve Chinese interests, with little to offer the Baloch people. At the
moment it seems that there are some improvements of the security situation
especially in the risky areas like restive areas of Balochistan. However,
they are still on a very high level determining a severe threat for quick
establishing and smooth running of the CPEC.
Given the realities of Pakistans security landscape, do you think
Pakistan can guarantee a secure and stable environment for the
CPEC?
In this context we have to differentiate between a short and long term
perspective. I am firmly convinced that due to massive military operations
like Zarb-e-Azb and the creation of new Special Forces to protect CPEC, the
implementation of infrastructure and energy projects (early harvest projects)
will continue more or less smoothly, most likely with some delays because of
temporary militant and/or political disturbances, administrative hurdles and
lack of civilian management capacities. However, the major problem
regarding the security environment lies in the persistent and overall
protection of the CPEC in the long run, for several reasons:
Firstly, it will be most unlikely that Pakistan can maintain the current level of
combat troops to protect the CPEC permanently. In this context, one must
state that the number of terrorist attacks went down because of the major
military operation of Zarb-e-Azb. But when the army returns to the barrack or
reduces its engagement/shifting the responsibility to civilian law enforcing
agencies (which should be the norm and not the exception) and/or
concentrate on other areas, the number of attacks might increase again.

Secondly, for the initial implementation period of CPEC projects, Pakistans


security forces can afford to concentrate just on major flashpoints, the
ongoing construction sides and militant hot spots. But after completion of
road network, and finalizing middle (long) term projects, the security forces
must take the whole network into account including the connected special
economic zones (SEZs) and hubs. The massive security measures in Gwadar
(port and SEZ) gives already an indication about upcoming tasks in the
several dozens of new industrial and manufactural nodes Pakistan is planning
to set up along the route. By having said this, one should recall the
experiences in protecting the NATO convoys for Afghanistan. Besides all the
efforts of Pakistans Army and paramilitary troops to ensure a safety passage
for a certain root within a concrete timeframe, it was not possible to
establish a secure supply line for the international forces in Afghanistan. On
numerous occasions, the transport of military vehicles and supply containers
for NATO through Pakistan end up in a disaster. Another example for the
difficulties to protect road and transit routes is the Karakorum Highway (KKH)
which determines the most northern part of the CPEC. Despite security
measures, the KKH turned into one of the most dangerous routes in Pakistan.
The numerous and manifold attacks, especially with a terrorist and religiousethnic background, gives a rather grim perspective for a safe environment
for the CPEC in the Himalayan region.
In sum, to turn the CPEC into a real, functioning economic corridor the
security and law and order situation in the whole country must be stable. By
reviewing the unfortunate record of the countrys security forces in dealing
with the sources of instability compared with the growth and resilience of
anti-state actors, one must wonder if Pakistan is able to provide an
appropriate security environment for an effective functioning Economic
Corridor.
Can you please talk a little about the political, administrative, and
environmental hurdles that Pakistan will have in regards to the
corridor?

The CPEC has to deal with severe geographical obstacles & natural
calamities affecting negatively the Northern Route of the CPEC. Despite the
fact that several significant geographical obstacles, especially in the
mountainous areas of northern Pakistan, are being overcome, some others
must be still addressed.
First of all, the CPEC has to face the major problem that the Khunjerab Pass
remains closed during the winter season (from November to May because of
heavy snow). Furthermore, the CPEC implementation has to deal with a lack
of time and insufficient management capacities of Pakistani authorities.
Having this in mind, an important puzzle appears: how realistic is the
implementation of such a mega-project in an underdeveloped, politically
unstable

country

with

an

extraordinary

weak

institutional,

political-

administrative infrastructure. Furthermore, endemic corruption, lack in


planning and management, for example the problem of land acquisition and
slow progress on numerous projects have already increased the costs
tremendously. Pakistani authorities already admitted that some envisaged
projects signed earlier by China and Pakistan in 2010 might not reach
completion.
Subsequently, many observers are stating that the Chinese investments are
being distributed inefficiently. Ongoing energy shortages and false planning
will make the implementation of the CPEC not impossible but continue to
hamper the CPEC and make individual projects more costly. In this context
one has to understand the genesis of the course and consequences of the
energy shortages. There is no doubt about the urgent need for energy supply
and production. However, the reason for the insufficient capacities is mainly
because of the disastrous payment practice, behaviour and moral. When this
will not change, even with the significant increase of new energy production,
the energy shortage will be not solved in the long run. In result, many of the
on-going CPEC projects are already delayed and much more costly, which
provoked additional domestic critic.
What do you think the geopolitical impact of the corridor will be and
do you think it will enhance regional cooperation on a wider level?

How far the CPEC produces positive impacts on regionalisation depends on


its ability to increase regional connectivity as much as possible. Therefore, it
is most important that the CPEC will be integrated in transport, energy and
trade infrastructure networks beyond the Pakistan-China nexus. It will be
most

important

that

Pakistan

includes

its

neighbours

which

would

unquestionably also benefit. Subsequently Pakistan should open up the CPEC


to the West (Iran and Afghanistan) and to the East (India). Only then it can
make a significant impact on regional connectivity and is able to function as
a game changer for regional cooperation.
In order to give such a meaningful input, a normalisation of Pakistan-India
relations

and

constructive

Pakistan-Iran

relationship

are

essential

preconditions. Furthermore, a fundamental reassessment of Pakistans


predominantly-security based approach towards Afghanistan and India is
needed. However, this requires a decisive change in the mind-set of regional
decision-makers, especially in Islamabad and New Delhi. The tensed IndiaPakistan relationship is until today the major roadblock for any noteworthy
regional collaboration. Most important is that Pakistan needs to redefine its
regional profile by normalising its relations with its neighbours. Therefore, it
must develop a foreign policy free from ideological parameters which allows
rational behaviour in its bilateral relations. More concrete, Pakistan needs a
greater emphasis on trade and economic cooperation instead of security
oriented parameters.
Do you see a comprehensive policy emerging aimed at controlling
terrorism in Pakistan and what do you think the dynamics will be?
Only partly! Despite tremendous efforts of the security forces in fighting
terrorism there are still clear indications that Pakistan is still following its
traditional

double

game

or

two-track

diplomacy.

This

is

gaining

significance not only in the context of Pakistans proclaimed participation in


the global war on terror but also the CPEC project. Against this backdrop,
one must state, that only due to heavy pressure of the US administration,
Pakistan turned against al-Qaeda, the Taliban, and affiliates. But the efforts
to fight al-Qaeda were rather supposed to calm Washington but not to crush

seriously the terror organizations. Pakistans campaign against cross-border


terrorist groups remain half-hearted, fitful at best. Regarding the Country
Reports on Terrorism (2014) by the U.S. State Department, the Pakistani
military undertook operations against groups that conducted attacks within
Pakistan such as Tehrik-i-Taliban Pakistan (TTP), but did not take action
against other groups such as Lashkar-e-Taiba or the Haqqani network, which
continued to operate, train, rally, propagandize, and fundraise in Pakistan
and facilitate attacks in Afghanistan or India. In contrast, Pakistans
conservative military and intelligence seems still to side with the Taliban and
other cross-border terrorists operation abroad, identifying them as a strategy
asset and instrument to achieve foreign policy goals.
Can you please speak a little about Indian objections to the
corridor?
Actually there are severe Indian concerns related to Chinese development
projects in Pakistan in general and the CPEC in particular.
Firstly, in order to push the CPEC, China invests significantly in GilgitBaltistan and in an area known in Pakistan as Azad Kashmir, both regions
are disputed territory between Pakistan and India. Islamabad claims that it
has semi-autonomous control over both areas. But Gilgit-Baltistan and Azad
Kashmir are parts of the former princely state of Jammu & Kashmir on which
India also lays claim to it. In this context, it is worrying for New Delhi, that
Islamabad is mulling upgrading the constitutional status of Gilgit-Baltistan
and is absorbing the area as the fifth province of Pakistan. Additionally, the
fact that these major projects involving several thousand Chinese personnel
belonging to the construction corps of the Peoples Liberation Army (PLA) is
creating another threat among Indias security circles, Beijing is planning to
build-up military presence in the disputed areas.
Secondly, the prospect that Gwadar may one day become a Chinese naval
base and increasing Pakistan-China security cooperation alongside the CPEC.
As such, the CPEC will help Beijing to expand its maritime capabilities
particularly in the Indian Ocean Region, which will increase its influence and

control over key maritime trade routes, to improve access to sources of


energy, and massively extend its influence in central and south Asia. This is
fostering fears in New Delhi of a Chinese encirclement of India by a so called
string of pearls or pincer strategy, understood as a series of strategic
naval ports.
Thirdly, CPEC heightens the notion that the Sino-Pakistani partnership poses
a challenge to Indias regional standing. Besides cooperation in economic
fields, Pakistan and China will also increase its collaboration in strategic and
security matters in order to ensure the safety of CPEC and related projects.
To deepen the security-military cooperation, Islamabad and Beijing agreed to
intensify collaboration in defence, counter-terrorism, and space and maritime
technology which is perceived in New Delhi as a serious threat towards its
own national security.
The heads of various Central Asian states have expressed interest in
connecting their infrastructure networks to the China-Pakistan
Economic Corridor. How do you think this will play out?
The major key to integrate Central Asia will be the growing Special Economic
Zone (SEZ) of Kashgar in the countrys western Xinjiang Autonomous Region.
The SEZs of China urban areas which enjoy more liberal policies especially
towards trade and investment than the rest of the Peoples Republic. For
example Shenzhen, Chinas most famous SEZ, has proved to be an enormous
economic success story and a significant engine for regional cooperation.
However, one cant compare Kashgar with Shenzhen, which has a
tremendous geostrategic location with its access to the sea and proximity to
Hong Kong. In contrast, Kashgar is landlocked and separated from the
prosperous eastern seaboard by the vast Taklamakan Desert. Additionally,
ethnic tension simmers. Muslim Uighurs, who make up the vast majority of
Kashgars urban and rural population, feel like socially suppressed and
politically sidelined in their own homeland. However, Kashgar determines the
central linkage between CPEC and other economic corridors with other
Chinese initiated economic corridors. By adjoining not only Pakistan but also

Afghanistan, Kazakhstan, Kyrgyzstan and Tajikistan it promises a high level of


connectivity between East Asia and Central Asian States, Russia and Europe.
The corridor will open new doors of economic opportunities in the
region, including new routes to the oil-rich Middle East. Do you
think that Iran will want to connect to this corridor and if so how
would the dynamics evolve?
Iran is already part of the One Belt, One Road initiative in the framework of
the so called Central Corridor which connects China to Europe via Iran. It
starts from Shanghai and links the country to Tashkent, Tehran and onwards
to Bandar Imam Khomeini Port of Iran on the Persian Gulf. One of this Iranian
port branches goes up towards Europe. This is the longer route but could be
an option in case the CPEC will be not implemented in time by Pakistan or
appears not be operational because of security risks or lack of management
capacities. By having said this, there is no doubt that Iran is interested to be
integrated into the CPEC, especially into a potential pipeline network.
However, for obvious reasons Tehran identifies the build-up of Gwadar port
as a competition to its own Chabahar port. Iran is aware that Beijing is
largely concerned over Islamabads handling of the CPEC, especially
regarding the ongoing political conflicts over the project implementation,
security problems, and delays among others. By observing Chinese unease
and Irans new room to manoeuvre internationally, Tehran offers the
establishment of an alternative corridor. Irans main argument is that it has
the functional port Chabahar, only 36 km away from Gwadar which lies in a
remote and restive area. In contrast to Gwadar, Chabahar is well connected
in the countrys infrastructure and Iran can guarantee security for Chinese
investment and workers. In this context it is interesting to mention that
China offered to invest $51 billion to Iran, more than for Pakistan to
implement the CPEC.
In sum, there is the imminent threat that a potential Iran-China Corridor turn
into a competition for the CPEC. However, taken Pakistans strategic
location (which is the countrys major asset) and Chinese interests into

account, one can state that an Iran option will function as an additional
option for Beijing but not as a substitute for the CPEC. Consequently, at the
moment it seems that it is not clear how far Iran might turn in to a
competitor or collaborative partner of the CPEC. However, from the Pakistani
side, it is far more complex. Any substantial cooperation between Tehran and
Islamabad has to take the special relations between Pakistan and Saudi
Arabia as well as Riyadhs sentiments towards Teheran into account. Riyadh
and Islamabad have long cooperated closely in the field of defence and
security, and Saudi Arabia has often helped Pakistan in precarious financial
situations. The CPEC may nevertheless reflect the beginning of a gradual
shift in Pakistans regional outlook and its relations to Iran and Saudi Arabia.
On the one hand, Pakistan considers Iran a potential partner which can help
overcome its dire energy needs, and on the other, it does not want to offend
further Saudi Arabia by getting too close to Tehran. This will be a difficult task
for Islamabad due to the growing Saudi-Iranian hostility in the Middle East.
Against this backdrop, Pakistan will take most likely a careful approach
towards Iran in order to not alienate further its relations with Saudi Arabia.

Costs and benefits of CPEC


I delivered a talk on China-Pakistan Energy Corridor and its ramifications at
Thinkers Forum Pakistan on May 31, 2015, chaired by Air Chief Marshal (retd)
Kaleem Saadat and attended by Lt Gen (retd) Lodhi, and members both from
civil and military. After the talk, there was long question/answer session
followed by summing up by the Chairman. Details of presentation are
covered in succeeding paragraphs:
CPEC. Establishment of China-Pakistan Economic Corridor (CPEC) was first
proposed by Chinese Premier Li Keqiang during his visit to Pakistan in May
2013. The proposed project of linking Kashgar in northwest China with
Gwadar Port on Arabian Sea coastline in Baluchistan was approved on July 5,

2013 during the visit of PM Nawaz Sharif to Beijing, which included


construction of 200 km long tunnel.
Chinas Investments. In December 2013, China committed $6.5 billion for the
construction of a major nuclear power project in Karachi. In May 2014,
another agreement was signed to supplement Orange Line metro train
project in Lahore worth $1.27 billion. In November 2014, the two countries
signed 19 agreements related to CPEC. In addition, Chinese firms started
work on six mega power projects in Gilgit-Baltistan such as Dassu, Phandar,
Bashu, Harpo, Yalbo to tackle Pakistans energy crisis.
Quest for Warm Waters. Mindful of the under development of its western
provinces which are its soft belly and ongoing Uighur movement, China
wants speedy modernisation of Xingjiang and other under developed
provinces to bring them at par with eastern provinces. For the
accomplishment of these dreams, China needs access to warm waters in
Arabian Sea through Gwadar since this route to world markets is the shortest
and the cheapest. This access was never granted to Russia.
Visit of Xi Jinping. With this objective in view, President Xi Jinping visited
Islamabad on April 20-21, 2015 and raised the level of investment from $ 26
billion to $ 46 Billion. He signed 51 agreements/MoUs worth $28 billion, with
$17 billion in pipeline spread over 15 years. His visit achieved the milestone
of the groundbreaking of historic 3,000 km-long strategic CPEC.
Projects in Hand
It includes $ 33 billion worth energy projects such as coal, solar,
hydroelectric power projects which will inject 10,400 MW electricity in the
national grid by 2017/18, and hydro power projects. Other projects are fibre
optic cable from Xingjiang to Rawalpindi, 1240 km long Karachi-Lahore
motorway, metro and bus service in six major cities, up gradation of 1300
km long Karakorum Highway, oil/gas pipelines to connect Kashgar to the

seaport of Gwadar, 1,800-km railway line, commercial sea-lanes, special


economic zones, dry ports and other infrastructure.
Routes: Three routes have been marked:Western route originating from Gwadar will pass through Turbat, Panjgur,
Naag, Basima, Sohrab, Kalat, Quetta, Qila Saifullah, Zhob DIK, Mianwali,
Hasanabdal, Isbd.
Central route will originate from Gwadar, Quetta, and reach DIK via Basima,
Khuzdar, Sukkar, Rajanpur, Liya, Muzaffargarh, Bhakkar, DIK.
Eastern route will include Gwadar, Basima, Khuzdar, Sukkar, RYK, Bwp,
Multan, Lahore/Fsbd, Isbd, Mansehra.
Importance of Gwadar. Gwadar is one of the least developed districts in
Baluchistan province. It sits strategically near the Persian Gulf and close to
the Strait of Hormuz, through which 40 per cent of the worlds oil passes.
Work on Gwadar deep-seaport had started in 2002 with Chinas investment.
In 2013, management of the seaport which was in the sloppy hands of
Singapore PSA International was handed over to Chinas Port Holdings. It is
planned to develop Gwadar into free trade zone with a modern airport on the
model of Singapore or Hong Kong and a gateway to CPEC. It will be largest,
deep seaport, overshadowing Chahbahar and Dubai seaports.
Views of Analysts
Some analysts perceive Gwadar seaport turning into Chinas naval base in
the Indian Ocean, enabling Beijing to monitor Indian and American naval
activities and thus frustrating their ambition to convert the ocean into
exclusive Indian lake. Modernization of Pak Navy by China is seen as a step in
that direction.
Analysts say the projects conceived under CPEC will ease Pakistans energy
shortages and make a substantial difference in the long term.

Some experts opine this initiative can bring greater cohesion in South Asia,
one of the worlds least economically integrated regions. It is also feared that
clashing geo-economic interests may lead to unhealthy competition.
Gains for China
While the CPEC may be monumental for Pakistan, for China it is part of
more ambitious plans to beef up the countrys global economic muscle.
Chinese officials describe the corridor as the flagship project of a broader
policy One Belt, One Road which seeks to physically connect China to
its markets in Asia, Africa, Europe and beyond. The New Silk Road will link
China with Europe through Central Asia and the Maritime Silk Road to ensure
a safe passage of Chinas shipping through the Indian Ocean and the South
China Sea. CPEC will link China with nearly half of the population of the
world.
Access to Indian Ocean via Gwadar will enable Chinas naval warships and
merchant ships to bypass Malacca Strait and overcome its Malacca
Dilemma.
Development of Gwadar seaport and improvement of the infrastructure in
the hinterland would help China sustain its permanent naval presence in the
Gulf of Oman and the Arabian Sea.
At the same time, the new silk roads are bound to intensify ongoing
competition between India and China and to a lesser extent between China
and the US to invest in and cultivate influence in the broader Central Asian
region.
Indian Concerns
Modi is at the horns of dilemma; whether to bow to RSS agenda of Hindutva
and remain captive to entrenched interest groups and lobbies in India with
hardened mindset who are doggedly resisting any paradigm shift in relations
with rising China and cling to the myth of Mahabharat. The dice of

connectivity loaded by China has left India confused and bewildered, whether
to remain tied to the aprons of declining super power which is not in a
position to make big investments, or to hitch the bandwagon of ascending
power which promises a lot.
Modis position will become more vulnerable when Pakistan starts politically
stabilizing and economically shining and Lahore turning into a regional
capital and he unable to fulfill the development agenda.
India is also concerned about Chinas huge investment in Pakistan,
particularly its recent decision to fund a new batch of nuclear reactors.
Pakistan plans to add four new nuclear plants by 2023, funded by China, with
four more reactors in the pipeline (adding up to a total power capacity of
7,930 MW by 2030). China is helping Pakistan in producing plutonium at
Chinese built Khushab reactor and will also sell 8 submarines worth $5
billion, which will give a quantum jump to Pak Navys sea capability.
Possibility of India making another somersault after finding the dicey US
Asia-Pacific pivot less attractive and Chinas policy of peace and friendship
more beneficial cannot be ruled out. However, this strategic shift will take
place only when China agrees to give preference to India over Pakistan (as
had happened in 1990 when the US ditched Pakistan and befriended India).
Pakistans Travails. Pakistan has remained under a dark star for a long
period. It has bravely sailed past the period of trials and tribulations but at a
very heavy cost. Pakistan has acted as the frontline state against the Soviets
and against global terrorism and suffered enormously, but in the process it
allowed China 35 free years to develop and prosper unobtrusively.
Changing Geo-Political Environment
Geo-political scenario is fast changing and things are brightening up for
Pakistan after its long rocky journey. China has entered into a new era of geoeconomic relationship with Pakistan and plan to boost two-way trade from

current $12 billion to $20 billion. Pak-Afghan relations have dramatically


improved. ISI and NDS have inked intelligence sharing agreement.
Afghanistan and China no more listen to Indias song of terrorism emanating
out of Pakistan.
Pakistan wisely deciding not to take part in Yemen war has helped in
improving Pak-Iran relations. Possibility of revival of IPL project and its
extension up to China has brightened up after gradual lifting of US sanctions
on Iran. Russia is warming up to Pakistan and establishing military ties with
it. China and Russia are strategic partners and boosting their respective
strategic ties with Iran. Pakistan is likely to be inducted as member of the
SCO and possibly member of BRICS.
Internally, Pakistan economic indicators and GDP are improving; foreign
exchange reserves are rising and inflation is down. Railway has gone in profit
for first time. Energy crisis is being tackled earnestly. The leaders and the led
are on one page to deal with scourge of terrorism on war footing. The world
is fast changing its negative opinion about Pakistan and it is now being
looked at with respect. Pakistan flags are being routinely hoisted in occupied
Kashmir; IDPs are returning to South and North Waziristan, and so are Afghan
refugees.
China has risked investing so much of amount in Pakistan since it is
convinced of the genuineness of the Pakistani claim of a paradigm shift in its
approach to terrorist groups. This change has come as a consequence to
across the board Operation Zarb-e-Azb in FATA and spectacular successes
achieved against terrorists of all hues including the Uyghur.
The Silk Road Economic Belt will not only connect and develop China and
Pakistan but also the regional countries for the first time and promote peace.
This phenomenon will be against Indias aggressive chemistry.
Pakistans Expected Gains

1.

CPEC has opened vista of great opportunities for Pakistan and will
greatly help in overcoming poverty, unemployment, inequities of smaller
provinces and help Pakistan in becoming the next Asian tiger.

2.

CPEC from all counts will prove a game changer and will make China a
real stakeholder in Pakistans stability and security. It is a win-win
situation for both. It will greatly expand the scope for the sustainable and
stable development of Chinas economic development.

3.

Investments by China will boost Pakistans $274 billion GDP by over 15


%.

4.

Corresponding progress and prosperity in Pakistan and Chinas


patronage will help Pakistan in getting rid of the decade old labels of
epicentre of terrorism, most dangerous country and a failing state.

5.

Given the solid foundations of friendship at the people-to-people level


between China and Pakistan, Chinese influence in Pakistan is destined to
endure the test of time.

6.

Pakistan seems to have found a saviour in China, which has promised


to stand by the country in its dark hour. Once Pak-China connectivity
strike roots, Pakistans geo-strategic security interests whenever
threatened will be guarded by China.

7.

Chinas investment surpasses all foreign investments in Pakistan in the


past. Win-win cooperation is based on trust, confidence and convergence
of interests. The Chinese influence in Pakistan has touched an
unprecedented high level and it has surpassed the US which has
remained the most preferred ally since 1954.

8.

The US which has repeatedly betrayed Pakistan and is widely disliked


by the public will have to negotiate with Pakistan harder than ever from
now onward. The elites under the magic spell of the US are also inclined
to change their western oriented mindset and change their orientation.

9.

Pakistan enjoys a more favorable fiscal budget situation compared to


India by reducing its budget deficit to 4.7% of GDP in 2014 (as against
Indias 7%) and Pakistan is much cheaper as an emerging market.

10.

Chinas economic and military assistance will help Pakistan a great

deal in narrowing its ever widening gap in economic-military-nuclear


fields with India and in bettering its defence potential.
11.

Keeping strategic parity with India has now become an achievable goal

for Pakistan.
12.

Revival of economy in the coming period is bound to make Pakistan an

attractive destination for foreign investors and will greatly help in


removing socio-economic inequities of smaller provinces and in
squeezing the space for anti-Pakistan elements.
13.

The success of the Sino-Pak partnership is critically linked to the

success of stabilization of the Afghan situation. China and Pakistan have


a shared interest in the stabilization of Afghanistan, because the main
threat to the realization of the Belt and Road projects in Pakistan come
from the terrorist groups operating out of the Af-Pak region.
14.

Pakistan is far more comfortable with China as a facilitator of the

Afghan peace talks than it is with the US, whose intentions are highly
suspect.
15.

Chinas investment in Pakistan has conveyed a big message to the

other South Asian countries such as Sri Lanka, Bangladesh, Nepal to


hurry and climb on board the Chinese Belt and Road Initiative to derive
growth benefits.
16.

Pakistans gravitation in the direction of China and Russia at this

juncture underscores a strategic realignment in the making.


17.

China is uniquely placed to pull the key regional states Russia, Iran,

Central Asian states to its side.


Efforts to Scuttle CPEC
Strategic economic moment for Pakistan has arrived and interesting part is
that Pakistan has assumed the position of economic pivot for the whole
region. This paradigm shift in circumstances is a cause of great worry for the
enemies of Pakistan both within and outside. India, Iran, UAE, Gulf States,
Israel, US are unhappy. For India, CPEC is a thorn in its paw

They have put their heads together to work out new strategies how to block
the forward march. RAW has opened a special office in Delhi and has been
allotted $300 million to disrupt CPEC. Already one can notice sudden upsurge
in acts of terror in the three restive regions and activation of certain NGOs
and think tanks all trying to air misgivings and create fear psychosis.
ANP, Baloch nationalists, PkMAP raised serious objections on the routes of
CPEC and alleged these have been changed. Even PTI and JUI-F showed
inclinations to climb the bandwagon of anti-CPEC forces. Objections were
being raised despite assurances by the government that no change has been
made.
Controversies Raised in CPEC
1.

Eastern route benefits Punjab and Sindh and bypasses major portion of
Baluchistan and KP.

2.

In their view, western route is original route, conceived in 2006 and is


shortest.

3.

CPEC not transparent and kept under wraps.

4.

Three-route theory is a cover story to hide change of route.

5.

Eastern route is six-lane motorway.

6.

Western route is 1-2 lane roads.

7.

Orange Line Train project is from CPEC allocations.

8.

Special Economic Zones are inequitably distributed.

9.

Eastern route is unsafe being close to Indian border.

Governments Stance
2013.

No original route in existence before 2013.

2014.

CPEC project director Maj Gen Zahir Shah stated that no

document is in existence showing original route; hence changing of


original route doesnt arise.
2015.

Western route will be developed as motorway by extending

Kashgar-Karakorum Highway.

2016.

Work on three routes has started simultaneously.

2017.

15-year project has short/mid/long term projects.

2018.

Govt and China wished to first develop eastern route due to

factors of security, better infrastructure and early completion.


2019.

Western route will be a long term project since it is uninhabited,

insecure, time consuming.


2020.

Provincial capitals will be nodes of CPEC.

2021.

Orange Line project is Punjab project funded by Punjab govt.

2022.

Proposed 16 industrial zones not yet finalised.

2023.

Development of backward provinces is high priority of govt.

2024.

Power projects are more in KP, followed by Sindh, Punjab and

Baluchistan respectively.
Ramifications
1.

Political consensus, security and law and order are pre-requisites for
early completion of CPEC.

2.

China has other options to exercise if Pakistan fails to deliver.

3.

Pakistan cannot afford to lose this golden opportunity.

4.

Successive govts will have to remain focused and committed to


completion of projects in hand.

5.

Provinces should focus on industrial parks, energy projects instead of


routes.

6.

Trade routes are not developed on basis of ethnicity but on basis of


convenience and requirements.

7.

There is skepticism that administrative, technical and operational


capacity of workforce and staff of Pakistan employed in CPEC may not
match the Chinese efficiency/commitment, and also fail to absorb huge
investment productively.

Actions in hand
1.

Operations in restive areas have been geared up.

2.

Agenda of NAP has been expedited, although not satisfactorily.

3.

10,000 strong Special Security Division has been created to provide


foolproof security.

4.

APC was held on May 13 to remove misgivings on CPEC. Another


meeting was held on May 28 and in this consensus was achieved after
PM agreed to develop western route first.

5.

Special Parliamentary Committee has been formed to address


complaints.

6.

Working groups will be formed in July and economic zones decided in


consultation with provinces.

7.

No funds will be transferred from CPEC allocations for Orange Line


project. China will however gift additional funds to complete this project
in two years.

Conclusion
The CPEC connected to Gwadar has the potential to radically alter the
regional dynamics of trade, development and politics. CPEC is a game
changer for the entire region. It will uplift the lives of about 3 billion people
across China, Central Asia, South Asia and the Middle East.
The time and tide is not in favor of the detractors. They will die their death in
the hurricane of CPEC since China is determined to make Pakistan a success
story. $46 billion economic package is Chinese gift for people of Pakistan.