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Great trade prospect for central Asian states under CPEC

The CAREC is a partnership of 10 countries including Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan. It is supported by six multilateral institutions, working together to promote development through cooperation.

It helps Central Asia and its neighbours realize their significant potential by promoting regional cooperation in four priority areas. These are transport, trade facilitation, energy and trade policy.

Pakistan’s location at the crossroads of West Asia, South Asia, Central Asia and the Middle East make it the natural gateway for the landlocked Central Asian Republics.

The Central Asian countries have been connected to the universe through the ancient Silk Road, situated at the crossroads of East Asia, West Asia, South Asia and Europe. Their location is very much suitable for trade.

Three of the Central Asian states have common borders with the Chinese province of Xinjiang. It is being planned as a future economic and transportation hub for 75 percent of Chinese trade with CARs.

Further down the route Xinjiang connects with Pakistan. It is well set to function as a key trade centre on the economic belt.

An extensive highway network is to be laid for transporting oil, coal and agricultural products from Xinjiang which would be shipped out from Pakistan’s Gwadar Port.

Thus Central Asia is unlocked once it links to these trade routes and it gains access to the Pakistan China Economic Corridor.

The China Pakistan Economic Corridor (CPEC) would connect the Central Asian Republics to the world with Pakistan becoming a center-point where most routes converge. The CPEC lies at the very heart of an intricate network of corridors working their way through land and sea as they connect vast regions.

CENTRAL ASIA NEEDS

A 2009 study shows that to keep its current rate of economic growth, Asia will need $8.3 trillion in infrastructure investments. For Central Asia, about $170 billion is needed in energy, about $100 billion in transport, about $80 billion for telecommunications and about $25 billion for water and sanitation.

The CARs states have energy reserves with Kazakhstan having 30 billion barrels of oil reserves while Turkmenistan’s natural gas is estimated at 265 trillion cubic feet.

HISTORIC LAPIS LAZULI CORRIDOR

In December 2016, Pakistan became part of the historic Lapis Lazuli corridor which runs through Afghanistan, Turkmenistan, Azerbaijan and Georgia to the Black Sea and Turkey until it leads straight to the Mediterranean Sea and Europe.

An international transport and transit corridor is created as a result which facilitates multi-modal transport of goods between Oman, Iran, Turkmenistan, Uzbekistan and Kazakhstan.

There is a huge trade potential in Afghanistan and five Central Asian states, namely Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan, with combined gross domestic product (GDP) of $ 445 billion and population of 66 million, offer a sizeable market for Pakistani goods, services and investment.

Pakistan is well placed to further tap the trade potential of Afghanistan and Central Asian Republics (CARs).

There is a huge trade potential in Afghanistan and five other Central Asian states, namely Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan, to offer a sizeable market for Pakistani goods, services and investment.

A Joint Business Council, comprising leading businessmen from both the countries, had also been established to increase business to business interaction.

PAK-AFGHAN BILATERAL TRADE

Pak-Afghan bilateral trade value, the minister revealed that it had increased from $1.11 billion in 2005-06 to $1.84 billion in 2015-16. This means there is greater potential to enhance trade.

Afghanistan Pakistan Transit Trade Coordination Authority (APTTCA) had been established to monitor effective implementation of the Pak-Afghan Transit Trade Agreement 2010 and so far.

PAKISTAN GDP GROWTH

Pakistan has targeted for higher and sustainable growth. The International Monetary Fund raised GDP growth forecast for Pakistan for fiscal year 2017 from 4.7 to 5 percent and projected GDP growth of 5.5 percent in the fiscal year 2021.

The Asian Development Bank raised the GDP forecast for Pakistan for 2017 from 4.8 percent to 5.2 percent. The Harvard University study had projected 5.07 percent annual GDP growth of the country till 2024.

Pakistan is very rich in human and natural resources and connectivity of this region will usher in new vistas of prosperity.

CENTRAL ASIAN COUNTRIES POWER INVESTMENT NEEDS

Central Asian countries have identified power investment needs of about $94 billion to 2023, according to an Asian Development Bank (ADB)-commissioned study presented at the Energy Investment Forum (EIF).

Energy is a key component for achieving broad-based and sustainable economic development for not only the CAREC countries but the entire Asia and Pacific region.

In order to ensure a secure supply of energy, a substantial amount of investments will be needed over the next 20 to 30 years.

CARS INTEGRATION AND STABILIZATIONS WITH TRADE AND ECONOMIC

It is essential that CARs be integrated and stabilized with trade and economic opportunities to stem militancy before it spreads across the length and breadth of Eurasia.

China would like to crush Uighur rebellions in its territory and prevent the influence of militants from the Central Asian countries.

SHANGHAI COOPERATION ORGANIZATION

Shanghai Cooperation Organization was formed as a confidence building forum aimed to promote the integration of the region, borders were demilitarized and the vision is to reduce the influence of Western influenced world forums like the United Nations.

The focus of the SCO is on economic initiatives, India and Pakistan also became members recently and the mandate has been broadened to include joint security, trade and anti-war pacts.

CENTRAL ASIA IMPORTANCE FOR EURASIA

Central Asia is daringly important for Eurasia in its own supreme manner, as David Denoon writes, ‘Central Asia is important in its own right because it is the vital fulcrum between the dynamism of East Asia and the wealth and technology in Western Europe’.

Central Asia is being regenerated into the new Silk Road and Eurasian Economic Union to promote the joint objectives and unity of the region.

US would like to have unlimited access to the CARs energy reserves and maintains military bases at this valuable strategic location, Russia feels that the US is entering in its territory and has its own military bases to counter American invasive intentions.

The Central Asian states of Kazakhstan, Kyrgyzstan, and Tajikistan are members of the Moscow-led Collective Security Treaty Organization (CSTO) while all the Central Asian Republics are part of the Shanghai Cooperation Organization as well and are well consolidated with China and Russia.

Central Asia is usually dependent on both Russia and China due to its geography so its inclusion in these forums is to be expected, as Dr. Farkhod Tolipov writes in ‘One Belt, One Road and many countries’.

Central Asian countries seriously needed to break their newly land-locked status. Forming a trade path from East to West was part of their individually selling point.

Such a position is not merely their geographical destiny. It is also a geopolitical condition due to the fact that unlocking the region depends largely on neighbouring great powers – namely China and Russia.

Delightfully the opening and unlocking of Central Asia appears to be a more complicated and protracted process than expected, in which the ‘Modern Silk Road’ needs to balance multiple national interests.”

It is imperative to observe that the common interests of China, Russia and Pakistan have resulted in the emergence of a potential power troika and geopolitical realignment.

This new power comparison is bounded by economic benefits and the new threat of US-India ties and the developing presence of ISIS in Afghanistan.

Several other countries have identical objectives, for example, Iran benefits from the regional integration and CPEC, especially after its nuclear deal with the U. stands discarded.

Turkey has brotherly and cordial relations with Pakistan and wishes to join CPEC too, Central Asian countries are an important market for Turkey and it needs the petroleum they can supply.

On the other hand, Afghanistan is deprived from participating actively in all this economic activity, its major setback is the civil war within and the oppressive Indian influence on the present Ashraf Ghani government in Kabul.

It could have had tremendous economic benefit from the Central Asian market and South Asian projects and trade corridors.

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