Sunday, April 17, 2016

China-Pakistan Economic Corridor: A game changer

Tashfeen Jamal

BESIDES India, some European Union (EU) countries does not feeling comfortable with China Pakistan Economic Corridor (CPEC) based growing relationships. Background interaction with policy makers in Islamabad and elsewhere has revealed that these countries consider that at the end of the day Pakistan can realign its political and economic focus on China, instead of Europe and USA. CPEC project symbolizes the growing mutuality of interest and the vision of a shared politico-economic future on the part of two neighboring countries that has nothing to do with UK-EU fears. It creates a new framework of interaction on the basis of economic connectivity and regional cooperation which will have far reaching positive implications for the two countries as well as the adjoining regions, as economic uplift of any region or country has the potential to send peace and development signals across the continents.

The proposed CPEC project recognizes the new realities of global and regional politics by cultivating a more systematic, up-graded and need-based interaction for socio-economic, industrial, energy and trade development. This also provides an opportunity to china and Pakistan to improve their interaction with Central Asia, West Asia, the Middle East and Europe. Both Pakistan and China are expected to gain from the proposed connectivity through highways, railways, sea-lanes, energy pipelines and electricity transmission lines. They will equally contribute to socio-economic development of other countries that become part of these arrangements.

Chinese Premier Li Keqiang’s decision to include Pakistan in his first foreign visit in May 2013, after assuming office in March 2013, underscored the importance Chinese leadership attaches to Pak-China relationship. The visit’s timing significantly indicated a process of political-economic decision making in china as it took place immediately after elections in Pakistan. The visit of Prime Minister Muhammad Nawaz Sharif to China in July, 2013 marked a new phase in the development of the relationship by putting economic cooperation and connectivity squarely at the centre of the bilateral agenda. During the visit MoU on China-Pakistan Economic Corridor (CPEC) was signed.

China and Pakistan have developed strong mutual trust through the multifaceted bilateral interaction over the last six decades. This experience demonstrates that “there are no contradictions in the strategic and political goals of Pakistan and China, and they have found out over the years that their relationship is mutually rewarding. Currently, there is a new ball-game of interdependence in international and regional politics and positive connectivity with immediate neighbors. This will require changes in Pakistan’s foreign policy strategy that has, in the past, preferred closer economic ties, trade and security interaction with the far-away states. Now, Pakistan will be required to cultivate more active relations with the immediate neighbors for sharing energy and pursuing economic development and trade. This will give a major boost to Pakistan’s economy.

A series of Meetings of Joint Cooperation Committee (JCC) and Joint Working Group on Transport Infrastructure, Energy and Planning were held, followed by the findings and recommendations of Working Groups Meeting wherein a list of priority projects/Early Harvest Project (EHP) of Pak-China Economic Corridor (CPEC) have been finalized during 3rd JCC meeting which was held on August 27, 2014.

The first progress is on the long term planning: the outline for long term planning of China-Pakistan Economic Corridor has been prepared on the basis of understanding reached in the 2nd JCC meeting on the basic contours of the long term plan and experience in the context of economic corridor’s development. It identifies the key areas and major projects including spatial structure and functional zones, construction of an integrated transport system, IT connectivity, energy cooperation, industries and parks, agriculture development and poverty alleviation, cooperation in livelihood areas and people to people communications, financial cooperation etc. It has been agreed that the outline of the long term plan would be finalized at the earliest so that the long term plan should be inked by the end of July, 2015.

Second progress is on Transport Infrastructure Projects: the salient features of progress on early harvest projects include CPEC transport planning, road map of future work and port related issues which are the key elements of Transport Infrastructure Projects. It has been agreed that further efforts are still required to increase the pace of work on implementation of Early Harvest Projects (EHPs) in rail and port sectors. Both countries are stressing the importance of sustainable development of the Gwadar Port and Balochistan region. The primary focus is on associating the local community in the development initiative at Gwadar and building public ownership through social and economic development project.

The emergence of Gwadar Port as a vibrant regional economic hub has provided an opportunity to regional and extra regional powers to develop strategic and infrastructural connectivity with Gwadar Port. Geo-political environment is considered as important factor influencing the development of human society. The most critical element of the environment is the sea, which occupies almost three-quarters of the surface of earth. The location of Gwadar port has two advantages; it is a warm water port making it available for operations throughout the year. Secondly it is to be a deep-sea port, which is a reality on the earth and allows large-scale trade and economic activity. Gwadar can be a trading point for all the countries, making it the maintenance and fuelling hub. Third progress is on the Energy Sector: both sides have agreed on the developments relating to energy planning. A meeting of the energy planning expert group was held in the first week of August,2015 where discussions focused on Energy Development Plan, Guiding Principles of Power Planning, Power Grid Development, Short Term Power Planning Principles, Conditions and list of Priority Projects like Gaddani Power Park and other energy resources so as to reduce energy imports.

The list of priority in energy sector projects calculates a total capacity of 10400 MW of power generation in Pakistan at an estimated cost of $15,506 million. Both the sides have entered into serious deliberations to evaluate return on the projects and risk management. The primary focus is thermal and wind power in order to put them in to operation by the year 2017-18. The hydro power projects are envisaged to be operational around 2020. The forecast of deliverables in energy and communication sectors have been agreed, and are out lined below:

a. Institutional capacity building in infrastructure and energy sector.
b. Long term plan of CPEC encompassing all development sectors including rail and road links.
c. Joint feasibility study of Havelian Dry Port.
d. Transmission lines to Lahore and faislabad.
e. Salt Range Mine Mouth power project.
f. KKH Phase-2 (Raikot-Islamabad section).
g. Karachi-Lahore Motarway (Multan-Sukkhar Section).
Pakistan’s leadership describes the CPEC as a game changer for Pakistan and the region at a total anticipated cost of USD 45 billion plus. However, the dividends of these projects will fully materialize gradually over a period of 10 to 15 years. It therefore requires a continued determination on the part of China and Pakistan to stay firm on the course.

—The writer is an Ex-COMSATS Islamabad student in Project studies. Can be reached (

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