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Pak-China Economic Corridor

The lack of political consensus and insecurity would be two major challenges towards the
implementation of the China Pakistan Economic Corridor (CPEC) project. Failure to address
these irritants will continue to affect Pakistans trade and economic engagement with countries in
the region, thus negatively impacting national development.
The need to address these challenges has never been so important as now, when Pakistan is set to
join the race for economic development and regional connectivity. Chinese scholars see this
emerging regional connectivity as tantamount to reshaping the regions outlook, with Pakistan
holding a central position.
In that regard, a consensus reached among Pakistans political leadership to set up a special
bicameral parliamentary committee for regular oversight of the CPEC project is a positive move.
If the committee becomes an active forum, it will certainly help address the concerns of all the
provinces and political parties. As the government has a history of setting up non-delivering
committees, one can only hope that things will be better this time. A non-functional oversight
committee will also be detrimental for policy and the execution sustainability of the CPEC
project. The corridor will take at least two decades to be completed and during this time several
governments will change in Pakistan.

There is hope that the CPEC will change the regional economic and strategic environment.

During President Xi Jinpings recent visit to Pakistan, nine of the 51 signed projects were linked
to Gwadar. The Chinese regard Gwadar as the Tilbury of Pakistan. The port of Tilbury, once a
strategically important deep-sea port of England, still carries huge economic and trade
significance. The CPEC and Gwadar port will bring the same prosperity for the whole of
Pakistan, which will become a conduit to multiple regions.
Gwadar is the tail of the silk belt, which will connect at Kashgar through different
communication networks. The security of the whole corridor and Gwadar is a real concern for
China. They are less worried about political differences in Pakistan, which they believe will be
resolved with the passage of time.
Both Gwadar and Kashgar are facing multiple security challenges. The Chinese expect that the
establishment of five economic zones in Kashgar will completely transform the region and
minimise the security risks such as the separatist and militant movements of the Uighurs. While
they hope for the same about the separatist movements in Balochistan, their focus is on shortand medium-term security measures for the safety of their workforce and threats to the route and
other projects in the country.

Though a declining trend in the number of terrorist attacks in Pakistan continued in April 2015
for the fourth month in a row, major actors of violence are still active. During the month, 50
terrorist attacks took place in the country, 10 less than in the previous month which claimed 70
lives and inflicted injuries on another 89 people. Although Balochistan appeared the more
volatile region in recent months, the situation has gradually improved there; compared to 37 in
February and 24 in March, 14 terrorist attacks took place there in April this year.
The military operations in parts of the tribal areas and surgical operations by paramilitary forces
in Balochistan and Karachi have helped curtail certain violent trends. The increase in sectarian
and communal attacks also indicates that the operational capacity of certain violent groups has
not been reduced. The terrorist infrastructure still exists inside and outside the borders, which
will continue to pose a threat.
After work starts on the CPEC, internal security sensitivities will increase where even a single
terrorist attack after a lull will increase the level of insecurity and damage the gains on the
security front. The bigger challenge for the security establishment will remain the rooting out of
the terrorist infrastructure in the country.
As far as the safety of the Chinese workforce is concerned, Pakistan can meet this challenge. The
army has already announced the creation of a 10,000-man special force for protecting the
development projects to be carried out under the CPEC. According to media reports, the new
force, named the Special Security Division, will comprise nine army battalions and six wings of
paramilitary forces the Rangers and the Frontier Corps. A two-star general will head the
special force.
There is hope that the CPEC will change the regional economic and strategic environment.
Specifically, in the Pakistan-Afghanistan perspective, better understanding on security and geoeconomic issues is required for the safety of the corridor, protecting it from local, regional and
global non-state and state actors. There are major concerns about the Kunar and Nuristan
provinces of Afghanistan, where multiple terrorist groups including Al Qaeda, the self-styled
Islamic State, the Tehreek-i-Taliban Pakistan, the Movement of Islamic Uzbekistan and the
Turkestan Islamic Party, etc are concentrated. These groups can pose a direct threat to the
CPEC in Pakistans northern region.
A better understanding between Islamabad and Kabul is also imperative to achieve border
security. At the same time, peace and stability in Afghanistan are also needed if China and
Pakistan want to maximise the benefits of the CPEC. Prime Minister Mian Nawaz Sharif and
army chief Gen Raheel Sharif visited Kabul just after President Ashraf Ghani returned from
India. That indicates that both sides want to keep the trust and optimism intact. The prime
ministers statement denouncing the Afghan Talibans spring offensive is a positive gesture.
Perhaps this is also a positive sign for the prospects of peace and reconciliation between the
Afghanistan government and the Taliban.

The CPEC: opportunities and

challenges
Pakistans unstable political system carries the potential to delay the
implementation of the CPEC. Last years long sit-in is a case in point.

We (the authors) had the opportunity to take part in an International Academic

Symposium on the China-Pakistan Economic Corridor (CPEC) held at Peking
University, from May 21 to May 23, 2015. Scholars from both China and
Pakistan shared their views on the CPEC. This article tends to identify certain
opportunities offered by the CPEC. However, the proposed corridor is not
without inherent and situational challenges. What are the potential benefits of
the proposed corridor? What are the challenges that may hinder the
development of the corridor? To what extent will Pakistan be capable enough to
overcome these challenges? How do regional and international players view the
proposed project?
China-Pakistan friendship has a long history of mutual cooperation. In 2006, the
two countries signed the Free Trade Agreement (FTA), which came into practice
in 2007. Since then, China has been trying to make itself visible in Pakistans
economic sector. Parallel to this the governments of the two countries have
been mulling over direct, unhindered road connectivity. The idea that turned
into the CPEC was initiated by then military ruler General Pervez Musharraf. A
formal memorandum of understanding (MoU) was signed in July 2013 to
construct an economic corridor by linking Kasghar with Gwadar through GilgitBalitistan and the four provinces of Pakistan.

Infrastructuraly, under the terms of the CPEC, China will construct a 4,000 km
long railroad network from Kasghar to Gwadar along with the construction of 12
to 13 special economic zones along the proposed corridor. Initially, the cost of
construction of the economic corridor was estimated to be between $ 18-20
billion but was raised to $ 32 billion. The sectoral priorities of the project vary
from the transport and communications sector, energy sector, investment and
industry sector to people-to-people cooperation. China intends to link the CPEC
with other regions such as Afghanistan, Iran, the Central Asian States to the
west of Pakistan and (in the long run) with India to the east of Pakistan. It is
expected that the CPEC will benefit over three billion people in the region.

The short-term goals of this project, referred to as early harvest, have a

timeframe of up to five years for completion, while the long-term goals will take
10 to 15 years for completion. The short-term goals are specific in nature like
the construction of a railway track from Havalian to Abbottabad to Xinjiang and
the construction of a motorway between Lahore and Karachi. In addition, it also
envisages the construction of a coastal highway between Karachi and Gwadar,
and the construction of Gwadar airport among other projects.

In this respect, the CPEC is an alternative energy route to states like Azerbaijan,
Kazakhstan, Turkmenistan and Uzbekistan. These countries are most dependent
on Russian oil and gas exports through the Black Sea. People from across the
region can be (in)directly employed in activities related to the corridor. Similarly,
the corridor can benefit the Persian Gulf, particularly Oman. These states can
conduct trade with China and the Central Asian Republics. The corridor will also
provide showcasing services, trans-shipment, storage, transportation and
manufacturing for Pakistan and China to the world market. Besides, different
sectors such as banking, travel services, electrical, recreational and shipyard
will flourish. Besides its enormous economic benefits, the CPEC serves the
geostrategic interests of the two countries. The physical proximity of Xinjiang
with Pakistan and the durability of Pakistan-China relations are the foremost
facilitating factors in the provision of strategic choices for both Islamabad and
Beijing.

Having outlined the economic and strategic opportunities, we now turn to the
challenges in this respect. They are broadly of two types: internal and external.
Internally, the 18th Amendment has transferred a lot of powers to the
provinces. This has made it harder to develop consensus on vital national issues
such as the CPEC. Both Balochistan and Khyber Pakhtunkhwa have expressed
reservations over the proposed new route of the corridor, which may endanger
the construction of the project. Moreover, the poor law and order situation in
these provinces is another hindrance for the smooth functioning of the corridor.
In addition, Pakistans unstable political system carries the potential to delay the
implementation of the CPEC. Last years long sit-in is a case in point.
Furthermore, since Pakistans governments have historically signed numerous
MoUs with China and other countries; how many of them have been (or will be)

accomplished is still to be seen. Besides, the proposed economic corridor project

should be mindful of ecological concerns.

Externally, the CPEC has the potential to engage India and Iran competitively.
Growing Indo-US relations after the nuclear deal and the growing Indo-Iranian
influence in Afghanistan may be a cause for concern for both Pakistan and
China. In order to secure its economic and strategic interests, India has
developed closer relations with Iran and Afghanistan. India is developing the
Chabahar port in Iran to get easy access to the Central Asian States. Pakistan
and India are also competing for influence in Afghanistan in the wake of the
USs exit. Moreover, the US may join the Indo-Iranian nexus to encircle China in
the long run. The formers surveillance plane alerted Beijing the other day as far
as the South China Sea is concerned.
Besides, Russian influence in the Central Asian republics may also be counted as
a strategic concern for Moscow believes in the status quo with respect to the
construction of a new pipeline in the Caspian region. Russia also enjoys
monopoly over the existing routes from Caspian to Europe and beyond. The
construction of new pipelines in terms of the CPEC and related economic
corridors may challenge Russias monopoly. Experts in the US have already
started referring to Chinas cooperation in the corridor as Chinas string of pearls
strategy, which refers to Chinas Sea Lines of Communication (SLOC). This
strategy extends from mainland China to Pakistan, extending to the straits of
Malacca, straits of Hormuz and straits of Ba-el Mandeb. Thus, the divergent and
conflicting interest of different states in the region is one of the challenges to
the construction and success of the CPEC.

To conclude, the CPEC is of vital national and regional interest, and can alone
become a game changer for Pakistan and the (South) Asian region, at the least.
It is incumbent upon the government of Pakistan to act beyond political
exigencies to address internal challenges and be vigilant of external
involvement. There is no iota of doubt, in our view, about Chinas unflinching
commitment in this respect.