WB to provide $2.25 billion for trade and energy corridor

[Neo]

WB to provide $2.25 billion for trade and energy corridor​

* Loan expected to ease burden on Finance Ministry for providing Rs 2 billion to PSO for oil terminal at Gwadar
* China to develop oil city in Gwadar, railway track to be laid to China​

ISLAMABAD: The World Bank (WB) is likely to provide Pakistan $2.25 billion to lay the infrastructure of a ‘trade and energy corridor’, a senior official in the Petroleum Ministry told Daily Times.

The official said Pakistan had requested the WB authorities to provide $2.25 billion for developing the infrastructure of the trade and energy corridor that would serve as a gateway for commerce and transport between South Asia, Central Asia, China and the Gulf countries.

He said negotiations were under way and the WB had indicated it would provide the loan.

Oil Terminal: The official said the government had planned setting up an oil terminal at the Gwadar Port and the Pakistan State Oil (PSO) had estimated the setting up of the terminal would require Rs 2 billion. He said the Planning Commission had asked the Finance Ministry to provide the amount to the PSO. He said the Finance Ministry was under pressure regarding the financing and WB funding could help in the circumstances.

China: He added China would develop an ‘oil city’ in Gwadar and many oil refineries would be set up, resulting in huge investment as well as enhancing Pakistan’s oil storage capacity. He said a railway track would be laid from Gwadar to China to provide transportation to Chinese investors.

He said that with the sustained inflow of investment, Pakistan would be able to execute projects worth billions of dollars and utilise the Gwadar Port’s key location to best advantage.

“Any land-based trade between the Gulf region and the South Asian states can best take place through Pakistan. The country would work as a link between the Gulf region, Iran, Afghanistan, China and Central Asia that would make all of us natural trading partners,” he said. “Pakistan is the ideal approach for the shipment of Indian goods to Afghanistan and the Central Asian markets,” he added.

He said transit through Pakistan could provide the most economical shipment route of fuel from energy-rich Gulf states, Iran and Turkmenistan to energy-deficient India. This would be particularly effective for natural gas pipelines from Iran and Turkmenistan.

 

[AgNoStiC MuSliM]

Good news that this project is still on track.

 

[AgNoStiC MuSliM]

Editorial: Trade corridor: paradigm shift we’ve been waiting for?​

An official of the World Bank in Islamabad says the Bank is ready to lend Pakistan $2.25 billion for a trade and energy corridor focusing mostly on Gwadar Port and its land link with China: “the trade and energy corridor that would serve as a gateway for commerce and transport between South Asia, Central Asia, China and the Gulf countries”. In this proposed scheme of things, Pakistan will set up a big oil terminal and refineries at Gwadar with Chinese help because most of the oil will be transported to China from there.

But the World Bank official has made other observations too: “Any land-based trade between the Gulf region and the South Asian states can best take place through Pakistan. The country would work as a link between the Gulf region, Iran, Afghanistan, China and Central Asia and that would make regional states natural trading partners. Pakistan is the ideal approach for the shipment of Indian goods to Afghanistan and the Central Asian markets”. Hopefully we can add the Iran-Pakistan-India (IPI) pipeline to the above project(s) after the complex tripartite negotiations on it are successfully concluded.

But a much more important thing happened during President Asif Ali Zardari’s meeting with the Indian prime minister, Dr Manmohan Singh, in New York. The report says: “The two met on sidelines of the 63rd United Nations General Assembly session and announced a mutual agreement on a number of vital business-related issues. On top of everything else came Pakistan’s agreement to allow Indians an overland access to Afghanistan.”

The trade corridor was first spoken of by General Musharraf in one of his enlightened moments. He was thinking in paradigmatic terms, about converting Pakistan into a trading hub for the regions lying around it. Since he had begun to build the Gwadar Port — not first conceived by him, let us admit — the network of roads and railway tracks branching from the port seemed to leave India out. But later he began to speak in more general terms and was once privately in favour of conceding the Indian request that a corridor be given it for trading with Central Asia.

But the idea of the Indian corridor got stuck because Gen Musharraf deferred to the “defence” angle and abstained from delinking it from Kashmir, despite having established the precedent of delinking the IPI from Kashmir. As a general, he probably realised that he might be standing on the edge of an identity-change of the state of Pakistan. But equally as a general, perhaps he realised the limits of how far he could go in changing the country from a warrior state to a trading nation.

There are two ways of looking at “geopolitical importance”, or two ways of deriving benefit from it. One is the “civilian” approach which means the geographically important state has to develop its roadways and railways, and other infrastructure such as hotels, to facilitate those who wish to pass through. Once the geographically “connective” state has become an effective corridor of passage, its “strategic” importance no doubt increases. And the dividend of this importance comes in economic terms and through an absence of war.

The other way is the “military” approach which relies on geography as “hindrance” rather than “connection”. The military mind says: we are in the middle and we will not let you pass unless you agree to our terms. (To India, we say let’s resolve Kashmir before we talk free trade.) In Pakistan’s case, this approach is often cited also as a raison d’etre for being a military dominated national security state. This is a warrior’s approach and signalises his preference for selective militarism as opposed to generalised economic betterment. In the case of Pakistan, it is the military view of geopolitical importance that has held sway.

Pakistan as a nuclear power is eminently suited to becoming a trade corridor with capacity to lay down the terms compatible with its economic interest. The Central Asian market may be small at this moment and it may be tough for India to compete with China there, but in the coming years the region of SAARC will take what is its due in Central Asia on the basis of shared history and civilisation. Afghanistan has already decided where it wants to stand by joining SAARC. The free trade project of the SAARC “common market” will finally integrate it to South Asia. The Central Asians will follow.

The smuggling that takes place between Pakistan and Afghanistan now supplies markets in Central Asia. The flour Pakistan loses to the region northwest of it will no longer be smuggled because the support price of wheat is now linked to the international price. The next stage is Pakistan organising the Central Asian food supply on the strength of its trade corridor and making the middleman’s money out of it. *

Daily Times - Leading News Resource of Pakistan

 

[muse]

Editorial: Trade corridor: paradigm shift we’ve been waiting for?

An official of the World Bank in Islamabad says the Bank is ready to lend Pakistan $2.25 billion for a trade and energy corridor focusing mostly on Gwadar Port and its land link with China: “the trade and energy corridor that would serve as a gateway for commerce and transport between South Asia, Central Asia, China and the Gulf countries”. In this proposed scheme of things, Pakistan will set up a big oil terminal and refineries at Gwadar with Chinese help because most of the oil will be transported to China from there.

But the World Bank official has made other observations too: “Any land-based trade between the Gulf region and the South Asian states can best take place through Pakistan. The country would work as a link between the Gulf region, Iran, Afghanistan, China and Central Asia and that would make regional states natural trading partners. Pakistan is the ideal approach for the shipment of Indian goods to Afghanistan and the Central Asian markets”. Hopefully we can add the Iran-Pakistan-India (IPI) pipeline to the above project(s) after the complex tripartite negotiations on it are successfully concluded.

But a much more important thing happened during President Asif Ali Zardari’s meeting with the Indian prime minister, Dr Manmohan Singh, in New York. The report says: “The two met on sidelines of the 63rd United Nations General Assembly session and announced a mutual agreement on a number of vital business-related issues. On top of everything else came Pakistan’s agreement to allow Indians an overland access to Afghanistan.”

The trade corridor was first spoken of by General Musharraf in one of his enlightened moments. He was thinking in paradigmatic terms, about converting Pakistan into a trading hub for the regions lying around it. Since he had begun to build the Gwadar Port — not first conceived by him, let us admit — the network of roads and railway tracks branching from the port seemed to leave India out. But later he began to speak in more general terms and was once privately in favour of conceding the Indian request that a corridor be given it for trading with Central Asia.

But the idea of the Indian corridor got stuck because Gen Musharraf deferred to the “defence” angle and abstained from delinking it from Kashmir, despite having established the precedent of delinking the IPI from Kashmir. As a general, he probably realised that he might be standing on the edge of an identity-change of the state of Pakistan. But equally as a general, perhaps he realised the limits of how far he could go in changing the country from a warrior state to a trading nation.

There are two ways of looking at “geopolitical importance”, or two ways of deriving benefit from it. One is the “civilian” approach which means the geographically important state has to develop its roadways and railways, and other infrastructure such as hotels, to facilitate those who wish to pass through. Once the geographically “connective” state has become an effective corridor of passage, its “strategic” importance no doubt increases. And the dividend of this importance comes in economic terms and through an absence of war.

The other way is the “military” approach which relies on geography as “hindrance” rather than “connection”. The military mind says: we are in the middle and we will not let you pass unless you agree to our terms. (To India, we say let’s resolve Kashmir before we talk free trade.) In Pakistan’s case, this approach is often cited also as a raison d’etre for being a military dominated national security state. This is a warrior’s approach and signalises his preference for selective militarism as opposed to generalised economic betterment. In the case of Pakistan, it is the military view of geopolitical importance that has held sway.

Pakistan as a nuclear power is eminently suited to becoming a trade corridor with capacity to lay down the terms compatible with its economic interest. The Central Asian market may be small at this moment and it may be tough for India to compete with China there, but in the coming years the region of SAARC will take what is its due in Central Asia on the basis of shared history and civilisation. Afghanistan has already decided where it wants to stand by joining SAARC. The free trade project of the SAARC “common market” will finally integrate it to South Asia. The Central Asians will follow.

The smuggling that takes place between Pakistan and Afghanistan now supplies markets in Central Asia. The flour Pakistan loses to the region northwest of it will no longer be smuggled because the support price of wheat is now linked to the international price. The next stage is Pakistan organising the Central Asian food supply on the strength of its trade corridor and making the middleman’s money out of it.