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CPEC: A dream come true or an allegory

“With faith, discipline and selfless devotion to duty, there is nothing worthwhile that you cannot achieve”.– (Quaid-e-Azam).

Pakistan is sharing its borders with India, Afghanistan, Iran, and China but more closely relationships and true friend is China who always aided Pakistan in hard times and they have been enjoying their cordial relationships with each other since 1950s. Almost 66 years of Pakistan-China bilateral cordial relations have been completed, continuously moving towards new heights of trust and development in their relationships that has demonstrated a sense of mutual understanding, strength and maturity over long-term along with enchanting slogans like “all-weather, time-tested, deeper than oceans and higher than Himalayas, sweeter than honey and stronger than steel”.

China-Pakistan Economic Corridor (CPEC) also familiar as North-South Economic Corridor is the biggest gift of true friendship by China. CPEC is the flagship of China’s ambition i.e. One Belt One Road (OBOR); an initiative expounded by Chinese President Mr. Xi Jinping in 2013. It is aimed at economic integration and better infrastructure ingenuities. It has direct impact on the development and growth of Pakistani economy. Corridor projects will result in growth of economic development (Gross Domestic Product, Gross National Product or Gross National Income) and economic growth (rise in productivity and capacity to produce goods and services within a country). It has an ability for bringing economic integration and cooperation. It is a win-win situation for both Pakistan and China because they both are the direct and primary beneficiaries of this mega project. The OBOR is consisted of two (2) international trade connections namely the land based (Silk Route Economic Belt) and ocean going (21st Century Maritime Silk Road).

The CPEC is seemed as having strong potential ties between China and Pakistan including economic and general public as well. The CPEC has a potential to serve as a triggering force for trade and economic activities among China, Pakistan, Afghanistan, Iran, India and Central Asian states. Undoubtedly, this initiative can lead to far-reaching incentives and better future visions but simultaneously it has undeniable challenges and risks that could curb the economic progress, sustainability, cooperation and peace.

Pakistan has been always at odds by different rivals and is always the hot issue and this time the challenges are attached with CPEC. CPEC is faced by many threats whether they are external or internal threats but Pakistan and China collectively need to take certain actions to guarantee the CPEC without preventions. The challenges faced by CPEC are mainly consisted of political, internal and regional security issues, political disgruntlement, Indian promotional activities of terrorism and separatism against Pakistan, chaotic situation in Afghanistan and controversies of different entities like media, India, Western countries and others. The good thing is that CPEC is not only hinged with challenges but it has also better future roadmap and incredible prospects that can lead Pakistan towards progress and these prospects mentioned in this essay are economic growth, investment incentives in Pakistan, globalization benefits, geopolitical benefits, development of infrastructure, job opportunities, abolition of energy crises, business opportunities, modern telecommunication benefits, and tourism benefits.

It can be stated as our living-standard is gauged by quantity of goods and services available in a country. Therefore, economic growth means a higher standard of living (directly proportional). A country’s economy needs to continue to increase because its population grows with the passage of time. If an economy is at stagnant position, there will be fewer jobs for higher population. Keeping it in mind, Pakistan needs to boost up its economy and economic growth. It will result in productivity, efficiency, increase in projects, jobs and reduction in poverty and unemployment rate. Ultimately, economic growth will be achieved; reason being economic growth is supremely based on investments. The main credit behind the fulfillment of these objectives will go to CPEC.

Investment incentives within Pakistan is the succeeding benefit after economic growth. An overall expenditure for CPEC is estimated about $52 billion, in 2017, to be completed in different years along with different phases and areas. As of now, in FY 2019, the total cost of CPEC development is valued at $1.62 trillion. A large amount of Pakistan’s trade with China accounts for $16 billion is done through the sea route (at 97 percent), rest of it is done through air (2 percent) and land (1 percent). Therefore CPEC will bring a drastic shift in various modes transportation. The great amount of trade will be diverted towards land route after the completion of project. This will result the cheaper cost of transportation than sea transportation. It would tie China’s ambitious “One Belt One Road (OBOR)” project and will offer a direct entrance to markets of Central Asia and Europe. A $52 billion Corridor has four foremost areas i.e. (1) Gwadar Port development, (2) Energy projects, (3) Road networks, (4) Industrial cooperation. The project is expected to be completed in three phases by 2020 (short-term projects), 2025 (medium-term projects) and 2030 (long-term projects).

In order to ease trade between China and Pakistan, Corridor has entertained an access to route that connects Kashgar and Gwadar with the help of construction of railways, highways and pipelines. Gwadar includes port, city and Gwadar region socio-economic development. The government is doing its utmost efforts to enhance and get new modernized roads, railways, aviation and other modes of transportation within the limited resources. National Highway Authority (NHA) has strategized to develop a long route about 2,395 km connecting Gwadar to Kashgar and Karachi. Propitiously, NHA has succeeded few key projects such as M-9 (Karachi-Hyderabad Motorway), Habibabad Flyover. It is also preparing for new projects to be entertained including Hyderabad-Sukkur Motorway, Tarnol-Fateh Jang (N-80), Nowshera-Peshawar (N-5), Sialkot-Lahore Motorway. China has also financed three more road projects under this corridor that accounted to Rs.1.025 trillion to road-based projects.

Large amount of chunk of $52 billion investment goes to the development of infrastructure worth $46 billion. Chinese President, Mr. Xi Jinping had released $46 billion only to build and renovate infrastructure in Pakistan. Mr. Xi has critically stressed on an idea through Silk Route to construct railway networks, roads and maritime roads. China, nowadays is considered as “the world of factory”. It is promoting its trading and different financial initiatives through Silk Route. It is the biggest investment by China so far. The corridor will be treated as a dynamic game changer for Pakistan and strong-based leading entity than its rivals. This large amount of investment by amiable nation will dramatically transfigure into a well-established regional economic hub. It will also encourage investors to invest in Pakistan not specifically from China only but also worldwide. As different modes of investment (like foreign investment) will increase, the cash inflows and circulation of money will increase within a country and thus resulting in a strong and prosperous economy internationally. Therefore, it would not be untrue if it is stated as: “investment is directly proportional to inflows/circulation of money which is directly proportional to economic growth and development”.

Pakistani officials have analyzed that the creation of CPEC and different projects will cause drastic increase of job opportunities more than 700,000 between 2015 and 2030 with an annual economic growth from 2 to 2.5 percent. As a result of corridor, Pakistan has increased the international trading in terms of foreign policy with Malaysia, US, Turkey, China and Iran.

According to World Bank, as an impact of CPEC, Pakistan has drastically increased the growth rate and industrial growth at a larger scale. Pakistani government has implemented a revised poverty line to calculate poverty rate of a country. And astonishingly, it was reduced from 64.3 percent (FY 2001-2002) to 29.5 percent (FY 2013-2014).

The biggest challenge for CPEC is regional, political, and internal security. And China’s lump sum amount of investment is invested on the peace and stability. Because of the Afghanistan enigma that could curtail an initiative towards peace and prosperity. For this purpose, China is playing an active role and striving to bring the Taliban to negotiate the quadrilateral context between Pakistan, China, US and Afghanistan. The security issues are deteriorating day by day. The security concerns in Afghanistan could be wrecked after the North Atlantic Treaty Organization (NATO) forces withdrawal as they have denied to come to the negotiating table. After the demise of the Mullah Mansoor, the Taliban leader, it is seemed that very few chances that Taliban could come to the negotiating table and cannot indemnify to bring and attract Taliban in peace talks. Regional security can be the biggest concern for the CPEC as it faces through some areas, which are very critical. The uprising in Balochistan can give rise to curb the accomplishment of CPEC and its projects consisting Gwadar Port.

Another healthy challenge for the execution of CPEC is the political disgruntlement. This disgruntlement is particularly for the selection of route, dividends and allocation of resources or funds for the projects under this corridor. The jurisdiction through All Party Conferences (APCs) has tried to knit the outrage of the provinces especially Khyber Pakhtunkhwa (KPK) and Balochistan, but still it shows that the issue has not been reconciled. The political differences over the economic corridor among different political parties are deeply implanted in the history of political economy of Pakistan and the allocation of resources/funds are politicized on the basis of political self-interests. The other scenario is that federal budget is allocated on the basis of population rather than poverty conditions in their respective areas or regions.

 

Indian negative promotional activities against Pakistan could be the biggest threat for completion of CPEC project. In order to eliminate CPEC, India is encouraging promotional activities of separatism, terrorism and chaos in various parts of Pakistan. The most updated and well-known indication of the Indian entwinement in the advancement of separatism activities was the seizure of Indian RAW agent, Kulbhushan Yadav from Balochistan. He was functioning and funding the entire system of terrorism and separatism there in Balochistan. His major duties were mainly consisted of diminishing CPEC, disrupting the Gwadar Port, and encouraging the Baloch separatists.

The uprising in Balochistan is a main challenge to the CPEC where savage attacks are just common to happen ignoring the concept of humanity and Islam. The Corridor will also pass through some parts of Federal Administered Tribal Area (FATA) and in future the expansion of CPEC to Afghanistan is linked with the stability in the FATA region. Therefore, the security of Gwadar and the entire region is a serious concern for China. Moreover, the people of Gilgit-Baltistan are demanding their share in the CPEC project too. This region also witnessed protests and strikes that demand a portion of share in the CPEC because it is considered an entry point of CPEC.

Different entities like International Media, India, Western countries and other have a sturdy faith that Economic Corridor is a strategic approach covering trade and development needs of Pakistan and to have a control over it. This has now become burning issue in the country and internationally too. This debate has created controversies among various stakeholders in Pakistan, which has negatively affected Pakistan and CPEC progress. But the past of Pakistan-China relations can be traced since 1950s, they have managed their cordial ties as supportive, productive and efficient manner. They have abetted and acted as a back-bone even in the most crucial time. China has always backed up Pakistan against terrorism, implemented anti-terrorism plan and development strategies. On the other hand, Pakistan has aided China on different issues like Taiwan, Tibet, and Xinjiang etc. China is also in an active mode to bring peace and prosperity in Afghanistan; a place known for its chaotic and violent activities where savage attacks are practiced overtly. On the other side, many people views, China is not only a trade or economic initiative or willing to be engaged in trading rather it’s a strategic planning to be leader globally and to proliferate its control stepping from Asia and onwards.

On the contrary, there are commendable potential prospects that could be enough for the survival and progress of Pakistan. The foremost incredible prospect of CPEC project is enhancement of economic growth. It can be stated that our living-standard is gauged by quantity of goods and services available in a country. Therefore, economic growth means a higher standard of living (directly proportional). A country’s economy needs to continue to increase because its population grows with the passage of time. If an economy is at stagnant position, there will be fewer jobs for higher population. Keeping it in mind, Pakistan needs to boost up its economy and economic growth. It will result in productivity, efficiency, increase in projects, jobs and reduction in poverty and unemployment rate. Ultimately, economic growth will be achieved; economic growth is supremely based on investments. The main credit behind the fulfillment of these objectives will go to CPEC.

One Belt One Road (OBOR) flagship project is of great value as it is reflected as the global project, which joints whole humanity to receive different benefits of the globalization. The Corridor has plenty of incentives for connecting not only Pakistan and China alone but it endeavors to connect and cover almost all Asian regions namely East Asia, Central Asia, West Asia, and Association of South-East Asian Nations (ASEAN). India, Afghanistan, Iran, and Middle East states are going to reap the benefits and will be direct beneficiaries. On the other hand, other Asian constituencies would be indirect legatees to grab the profits from this Corridor.

Geopolitics is another benefit of CPEC illustrating that China trades almost 80 percent of oil and energy through the way of Strait of Malacca (extend of water between Malay Peninsula, Malaysia and the Indonesian Island, Sumatra). Its energy, economic and peace is at a gigantic risk which need not to be overlooked. Therefore, China is seeking an alternative and appropriate route both in terms of economic and security-wise. Therefore, the best known alternative to connect it directly to the Indian Ocean is through Gwadar Port. According to geopolitics, Pakistan is the most reasonable, feasible, and suitable economic corridor for trading purposes, which will enable an entrance to Central Asia, South Asia, East Asia, and finally West Asia.

To overcome energy crisis of Pakistan, energy projects like Karachi Coastal Power Project, Diamer-Basha Dam, Chashma Nuclear Power Projects etc. are being entertained under the umbrella of corridor. They include coal, hydel, Liquefied Natural Gas (LNG), solar and wind. Pakistan Atomic Energy Commission (PAEC) is operating three nuclear power plants: Karachi Nuclear Power Plant (KANUPP), Chashma Nuclear Power Plant Unit-1 (C-1) and Chashma Nuclear Power Plant Unit-2 (C-2). The work is in process on the construction of fourth and fifth nuclear power plants i.e. Chashma Nuclear Power Plant Unit-3 Unit-4 (C-3 & C-4) that will provide 340 MW at Chashma site. Sixth and seventh nuclear power plants namely Karachi Coastal Power Plants (K-2) and Karachi Coastal Power Plants (K-3) are under construction near KANUPP too. The government is intent to complete 969 MW Neelum Jhelum Hydropower project. Additionally, CPEC is estimated to add 10,400 MW by the financial year 2018. It is believed, as dynamic and profound determinations of government will continue ahead, it will not be impossible that our own power generation capacity system can restore Pakistan’s energy needs for a longer period of time in an effective technique.

The people of Gilgit-Baltistan (GB) are facing electricity crises but this issue will be abolished after the completion of Diamer-Basha power project. Parliamentary Secretary Home Department in addition to Law Department Gilgit-Baltistan, Mr. Aurangzeb Khan said the Diamer-Basha Dam – situated in GB will generate electricity of 4,500 megawatts (MW) that will eradicate electricity crises in Gilgit-Baltistan (GB).

Baltistan is famous for fruits such as cherries, apricots, apples, strawberries, etc. and Quetta, the provincial capital of Balochistan – the 9th largest city of Pakistan is known as “the fruit garden of Pakistan” for its vast varieties of dry fruits named as pistachio, cashew, almonds, walnuts, pine nuts, etc. According to Asian Development Bank (ADB), Gilgit-Baltistan is the manufacturer of more than 100,000 metric tons (1 metric ton = 1,000 kilograms or 2,205 pounds) of fresh apricots per annum. CPEC will be an obvious game changer for the Baltistan and Quetta by opening business opportunities. This too will help local traders to multiply their sales with high profit and lower transportation cost. Currently, fruits are transported by mean of cargo via Dubai – it would be much easier, faster and cheaper if same commodities are transported by road to China through Xinjiang.

The former prime minister of Pakistan, Nawaz Sharif has set the foundation of fiber optic project in GB, which is also one of the projects of Corridor. The project would cost worth Rs.4.4 billion along with an 820 km long cable from Rawalpindi to Khunjerab. This will too facilitate telecommunication route between China and Pakistan. Ultimately, GB will be the fundamental successor of it because GB is still deprived of this service (3G/4G) and other modern telecommunication amenities.

Furthermore, the improvement of security concerns and better infrastructure provided by CPEC has given a lead towards the growth of interest in Pakistan’s tourism sectors and related activities. Chinese investors are keen to invest in tourism sector as Economic Corridor will increase investment opportunities for investors after the construction of roads and railways connecting two countries. World Bank is also giving a supportive hand to Pakistan Tourism Development Corporation (PTDC) in growing tourism via sponsorships in various projects. Abdul Ghafoor, Managing Director PTDC said in a meeting held between World Bank and PTDC, the Bank is supporting CPEC and more than 3 billion people are attaining benefits from it. The Bank is resolute to facilitate tourists and establish resorts through joint ventures and private investments. After the sustainability of peace in a country, tourism activities have been increased at a greater scale in comparison to preceding years. It is noticeable that a large fractions of lands are owned by Pakistan Tourism Development Corporation (PTDC) is kept open for tourism projects investment.

Despite Pakistan is facing many challenges regarding CPEC such as political, internal and regional security concerns, political disgruntlement, Indian negative promotional activities against Pakistan to seize completion of CPEC, chaotic scenario in Afghanistan, and different controversies generated by different entities such as International media, India, and Western countries; CPEC has blend of varieties of potential prospects as mentioned in this work i.e. economic growth, investment benefits within Pakistan, globalization benefits, geopolitical benefits, development of infrastructure, job and business opportunities, abolition of energy and electricity crises, modern telecommunication benefits, and finally tourism incentives which will bring development, progress, peace, integration, and cooperation.

Fulfillment of CPEC objective is very crucial within the time frame, so different stratagems will sprout up and they ought to be confronted by the nation of Pakistan effectively. This project is basically a game changer for Pakistani nation, which is aimed at achieving the strategic prosperity and better communication channels with Pakistan and China. It is mandatory for Pakistan to remain focused on target rather than burning daylight on trifling issues. CPEC is hope for better region of the future with peace, development, integrity, prosperity and growth of economy.

It is apparent, Economic Corridor is essential for both countries. Pakistan needs to prevail over its economic, development, social and energy issues while China needs to expand its outer influence and to be a global market leader. It is mandatory for Pakistan to remain focused on target i.e. development and prosperity of Pakistan rather than burning daylight on trifling issues. Outsiders, adversaries and those being reason behind dearth of development – should not be given an opportunity to seize Pakistani development and cause of turmoil in the country. CPEC is hope for better region of the future with peace, development, integrity, prosperity and growth of economy.

The writer is a Lecturer (Management Sciences) SZABIST

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