China-Pakistan Economic Corridor (CPEC) – Regional Connectivity

China-Pakistan Economic Corridor (CPEC) is a framework of regional connectivity. CPEC will not only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India, Central Asian Republic, and the region. 

As a pilot project of the Belt and Road Initiative, which focuses on connectivity and cooperation to promote common prosperity, the CPEC is a win-win proposition for Pakistan and the region. The enhancement of geographical linkages having improved road, rail and air transportation system with frequent and free exchanges of growth and people to people contact, enhancing understanding through academic, cultural and regional knowledge and culture, activity of higher volume of flow of trade and businesses, producing and moving energy to have more optimal businesses and enhancement of co-operation by win-win model will result in well connected, integrated region of shared destiny, harmony and development.

It is perceived that the CPEC will turn Pakistan into a bigger economy (25th largest by 2025 and 20th by 2030). This is the hard reality, however, more importantly, only an economist can differentiate between a foreign loan and investment and their respective impacts on Pakistan’s economy. So it is important to clearly state that out of the $63 billion to be injected into the CPEC, about $48 billion will be in the form of investment in commercial projects by Chinese companies in Pakistan, which will not increase the latter’s external debt liability. Which means Pakistan’s loan would be only about $15 billion. Besides, Gwadar Port in Pakistan and its allied infrastructure would bring about a “sea change” in the Arabian Sea. The CPEC will establish all-weather connectivity between Gwadar and Kashgar in China’s Xinjiang Uygur autonomous region. And the surrounding areas and the ground are being developed to ensure the CPEC brings prosperity to the region.

It is stated that the CPEC will open doors to immense economic opportunities not only to Pakistan but will physically connect China to its markets in Asia, Europe and beyond as well. Almost 80% of the China’s oil is currently transported from Strait of Malacca to Shanghai, (distance is almost 16,000 km and takes 2-3 months), with Gwadar becoming operational, the distance would reduce to less than 5,000 km. According to China Daily, if all goes well and on schedule, the 21 agreements on energy including gas, coal and solar energy, these projects would provide up to 16,400 MW of energy altogether. As part of infrastructure projects worth approximately $11 billion and 1,100 kilometer long motorway will be constructed between the cities of Karachi and Lahore, while the Karakoram Highway between Rawalpindi and the Chinese border will be completely reconstructed and overhauled. The Karachi-Peshawar main railway line will also be upgraded to allow for train travel at up to 160 kilometers per hour by December 2019. Pakistan’s railway network will also be extended to eventually connect to China’s Southern Xinjiang Railway in Kashgar.

A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project, including a $2.5 billion pipeline between Gwadar and Nawabshah to transport gas from Iran. Oil from the Middle East could be offloaded at Gwadar and transported to China through the corridor, cutting the current 12,000 km journey to 2,395 km. It will act as a bridge for the new Maritime Silk Route that envisages linking 3 billion people in Asia, Africa and Europe, part of a trans-Eurasian project. When fully operational, Gwadar will promote the economic development of Pakistan and become a gateway for Central Asian countries, including Afghanistan, Uzbekistan, linking Sri Lanka, Iran and Xinjiang to undertake marine transport. Over $33 billion worth of energy infrastructure will be constructed by private consortia to help alleviate Pakistan’s chronic energy shortages, which regularly amount to over 4,500 MW, and have shed an estimated 2-2.5% off Pakistan’s annual GDP. With approximately $33 billion expected to be invested in energy sector projects, power generation assumes an important role in the CPEC project. Over 10,400 MW of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor’s fast-tracked “Early Harvest” projects.

The region of Baltistan is known for its fresh fruit exports, like cherries, apricot and apples, so the CPEC will be a game changer by opening business opportunities for the region’s traders. This will provide local traders with an advantage and help them double their sales by tremendous saving in cost of transportation. Presently, fruits are being exported through air-cargo via Dubai; it would be faster and cheaper if the same could be sent by road to China via Xinjiang. Tourism which currently makes up an insubstantial part of our earnings is believed to be elevated by opening of this economic corridor. The CPEC, some believe, will also boost tourism in the 73,000 square km region. The region is considered to be a mountaineer’s paradise, since it is home to five of the ‘eight-thousands’ (peaks above 8,000 meters), as well as more than 50 mountains over 7,000 meters. It is also home to the world’s second highest peak K2 and the Nanga Parbat. K2 is the second-highest mountain on Earth, after Mount Everest. It is located on the border between Baltistan, in the Gilgit-Baltistan region of Pakistan, and the Taxkorgan Tajik Autonomous County of Xinjiang, China.

However, the CPEC has faced criticism and negative publicity since its inception from countries that feel threatened by the rise of Pakistan and China. And since investment in future projects depends largely on the assessments of their potential, negative narratives could make it difficult to realize the full potential of the CPEC. The findings of an online survey by Pakistan-China Institute to “assess the perception and awareness of respondents with regards to various impacts and challenges that Pakistan will face in its association with the CPEC” reinforces “the supposition that people are not at par with the reality of CPEC” to some extent. Therefore, the Pakistani government needs to identify the shortcomings of its policies and take remedial measures so as to present the true picture of the CPEC, because its opponents are using all the media tools, especially social media, to paint the CPEC in a negative light. It is necessary for Pakistan to establish a media team that can efficiently publicize what the CPEC really stands for by conducting evidence-based research on the CPEC; engaging all segments of the media and academia to publicize the importance of the CPEC at the national level to help the people to understand that its trickle-down effects will raise the living standards of the common people of Pakistan; highlighting the CPEC’s role in the international arena to attract more investment to Pakistan; ensuring the press releases on CPEC activities are issued in time; creating and training a group of people to write articles for media outlets highlighting the CPEC’s benefits and refuting the defaming campaigns; and publishing weekly newsletters, and monthly, quarterly, bi-annual and annual magazines/journals for stakeholders, academia, students, researchers and the business community.

Besides, the Pakistani government must not forget that China invested in the CPEC at a time when Pakistan faced severe energy shortage, which slowed its economic growth and increased extremism and terrorism. The CPEC energy projects have almost ended the decade-long chronic electricity shortfall within 32 months. Many countries have achieved progress and prosperity after doing away with their geostrategic policies and focusing on geo-economic realities. Thanks to China, Pakistan has now realized the importance of geo-economic realities through the huge influx of CPEC-related foreign direct investment, which will define and decide the destiny of generations of Pakistanis. Therefore, it is moral, social and national obligation of people of Pakistan to serve and secure the CPEC with all its manifestations.

An opinion by:

C. Andrew