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CPEC and geopolitics go hand in hand

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CPEC and geopolitics go hand in hand

Afshan Subohi
September 6, 2021



The multi-billion-dollar initiative, projected as the ‘game changer’ for Pakistan, seemed to have lost steam in recent years. — APP/File


The multi-billion-dollar initiative, projected as the ‘game changer’ for Pakistan, seemed to have lost steam in recent years. — APP/File

KEEN to build on the last year’s growth rate of 3.9 per cent to hit the targeted 4.8pc this year, Pakistan is set to leverage the second phase of the China-Pakistan Economic Corridor (CPEC) at a time when the future outlook of the economy is somewhat clouded by the changing geopolitical dynamics and the evolving realignments of contending regional and global powers.

While engaging with European dignitaries converging in Islamabad as the world eerily watches the return of Taliban rule in Afghanistan, Pakistan has mounted renewed efforts to regain Chinese trust to reboot the CPEC. The multi-billion-dollar initiative, projected as the ‘game changer’ for Pakistan, seemed to have lost steam in recent years.

Experts soft towards the dispensation in Islamabad blame Covid-induced reluctance of the investors, a series of violent incidents targeting the Chinese, and certain bureaucratic impediments for the slowdown. Others describe it as a lack of homogeneity of thought among the policymakers, security lapses and a hostile bureaucracy.

Pakistan may have some leverage in Afghanistan but CPEC is a once-in-a-lifetime shot at future stability and prosperity
“From what I heard in circles close to China, the quiet diplomats of the giant have ended their silence and are not vocalising their CPEC-related disappointments. The violation of security is unacceptable, but their reservations are not limited to this dimension alone. The stepping back of China from the 10th Joint Coordination Committee hours before the meeting was their way of reminding Pakistan that it needs to put the act together. The change of tone indicates that they are already weighing other options if their first choice crumbles,” a dependable source in Islamabad commented.

“We will have to make the CPEC work by regaining the confidence of our Chinese partners. To this end, we will have to further improve the security cover for Chinese nationals and assets. We are working hard to quickly iron out contentious issues breeding hostility and hindering progress. The focus is also on improving coordination between federal and provincial governments for friction-free and visible movement in the right direction.

This might take some time, but we are fully committed to the CPEC and are aware of the high stakes for both sides,” the special assistant to the prime minister (SAPM) on CPEC Khalid Mansoor told Dawn over the telephone from Islamabad while discussing the CPEC slowdown and the Chinese reservations.

“CPEC is a key component of the Chinese One Belt One Road plan — a test case to check the viability of the vision of an ascending global power. As for Pakistan, against the backdrop of a desperate need for massive investments, CPEC was a sheer godsend that can make or break our future,” an economist agreed and elaborated stakes.

“Besides the benefits of operational projects of the first phase in the energy and infrastructure sectors have disarmed the CPEC sceptics in the country and the stage is now set for the initiation of the second phase,” he added.

“I am primarily tasked to speed up the implementation of the second phase. My experience of successful joint venture projects with China gave an insight into the inner working of such undertakings. I hope to quickly untangle the knots keeping the progress hostage. Since assuming office, I have visited multiple project sites, including Gwadar, and have met the heads of Chinese companies already invested or in the process of entering Pakistan,” the SAPM said. Khalid Mansoor was picked for the post in early August as soon as Rtd General Asim Bajwa vacated the position at the head of the CPEC Authority.

“We are hoping to approach big Chinese investors with a compelling case for Pakistan as a future investment destination in multiple sectors,” Mansoor added.

When pressed to share names of the Chinese companies already here, he did not have many at the top of his head but did mention energy-sector companies he was associated with earlier besides electronic goods manufacturers Vivo.

In all, about 40 small private Chinese companies are operating in the electronic, textile, construction-related goods and the auto sector, according to the Federation of Pakistan Chamber of Commerce and Industry website.
The second phase of CPEC deals with deepening and broadening the base of economic ties beyond infrastructure and energy between Pakistan and China. It targets economic transformation through big doses of foreign investment, leading to technology transfer, skill up-gradation and trade facilitation. It will generate employment opportunities and harness under-utilised natural endowments.

“To nudge the Chinese businesses to relocate their industries to Pakistan, we are aiming to create synergy and a package of competitive incentives”, SPAM said.

Mr Khalid dismissed the perception of politicisation of the CPEC. Responding to a related question on the Special Economic Zones (SEZ) located at Rashakai in Khyber Pakhtunkhwa and Faisalabad in Punjab, he was clear. “Fast-paced development of Dhabeji SEZ is next only to Gwadar Port in our order of priority. Its close proximity to Port Qasim gives it an edge over the other sites. The selection of a developer with the involvement of the Sindh Government is at an advanced stage.”

Mr Khalid attributed the slow progress on CPEC to “stringent Covid containment protocols” in China. “Don’t pay heed to proclamations of the naysayers. The game-changing CPEC is on track. Projects in energy and infrastructure worth $13bn are up and running, while others worth $12bn are nearing completion. Efforts are afoot for the next phase.”
Last week senior officials of Germany, England and the Netherlands were in Islamabad in connection with the unfolding scenario in Afghanistan. Some more may land this week or later.

“Pakistan may have some leverage in Afghanistan, but as far as CPEC is concerned, it cannot afford to miss this once-in-a-lifetime chance, especially when the people of the country are getting desperate for the promised future,” commented a market pundit.

Published in Dawn,
 

FuturePAF

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Internal Security and harmony are prerequisites for FDI. If Pakistan and Afghanistan are going to recover from the impact of the last 40 years, they will have to seriously focus on security. Protecting CPEC routes can employ a lot of Afghans as well as Pakistanis, but perhaps not all with gun. More so as providers of good governance and services.

If they can achieve this, mining can begin in Afghanistan and the modernized main line 1 can be built up to the Uzbek border. A test case is the copper mine China wants to finally start extracting from in Afghanistan.

Through Uzbekistan it can go to Kazakhstan and China via Khorgos and coming back the other way, large supplies of Uzbek (and other central Asian) cotton can come down the tracks to textile factories in Pakistan. Pakistani products can go up to Central Asia and Central Asia and Russian products can come down to Karachi and Gwadar for export into the Indian Ocean region.

BTW, the rail line should be built in a way that prioritizes freight (such as the ability to carry double decker containers) over passenger trains. We need to make money from this not be subsidizing our own passenger services, which could probably be done more efficiently (for the nation) through buses. For the design we should study the Indian dedicated freight corridors. Should we manage this, in the long run, if and only if India allows Kashmiris to decide their fate, all their new dedicated freight corridors being built right now, could feed into the Pakistani rail corridor to Central Asia, and onwards to China in the east and Russia and Europe to the West. With high volumes, transportation costs can come down, as with American freight rail, and perhaps become competitive in some products over ocean shipping to Europe. This would incentivize India to resolve the Kashmir dispute, and get the most out of their demographic dividend, through trade, before their work force ages out.
 
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Silverblaze

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Internal Security and harmony are prerequisites for FDI. If Pakistan and Afghanistan are going to recover from the impact of the last 40 years, they will have to seriously focus on security. Protecting CPEC routes can employ a lot of Afghans as well as Pakistanis, but perhaps not all with gun. More so as providers of good governance and services.

If they can achieve this, mining can begin in Afghanistan and the modernized main line 1 can be built up to the Uzbek border. A test case is the copper mine China wants to finally start extracting from in Afghanistan.

Through Uzbekistan it can go to Kazakhstan and China via Khorgos and coming back the other way, large supplies of Uzbek (and other central Asian) cotton can come down the tracks to textile factories in Pakistan. Pakistani products can go up to Central Asia and Central Asia and Russian products can come down to Karachi and Gwadar for export into the Indian Ocean region.

BTW, the rail line should be built in a way that prioritizes freight (such as the ability to carry double decker containers) over passenger trains. We need to make money from this not be subsidizing our own passenger services, which could probably be done more efficiently (for the nation) through buses. For the design we should study the Indian dedicated freight corridors. Should we manage this, in the long run, if and only if India allows Kashmiris to decide their fate, all their new dedicated freight corridors being built right now, could feed into the Pakistani rail corridor to Central Asia, and onwards to China in the east and Russia and Europe to the West. With high volumes, transportation costs can come down, as with American freight rail, and perhaps become competitive in some products over ocean shipping to Europe. This would incentivize India to resolve the Kashmir dispute, and get the most out of their demographic dividend, through trade, before their work force ages out.
Sadly, this is not possibility because if losing the whole of aksai chin could not incentivize the hindus, how will this project be able to do so?

Pakistan must focus on itself and develop as much as it can economically. It can become a viable market for central asia itself while cutting india. But if the Pak elite has decided to present kashmir to india and include the hindus in the project well thats an other story.
 

FuturePAF

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Sadly, this is not possibility because if losing the whole of aksai chin could not incentivize the hindus, how will this project be able to do so?

Pakistan must focus on itself and develop as much as it can economically. It can become a viable market for central asia itself while cutting india. But if the Pak elite has decided to present kashmir to india and include the hindus in the project well thats an other story.
We don’t need the Indians to make this plan work, in fact I agree, we wouldn’t want them to join until we benefited from the connectivity enough to catch up with their industries. It just benefits them if they join it, for which Pakistan would require the core outstanding issue to be resolved.
 
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