CPEC & Kazakhstan’s ambitions for greater regional connectivity
China-Pakistan Economic Corridor (CPEC) has “immense” potential to “expand” and “expedite” the concept of Greater Regional Connectivity (GRC) because of its various mega projects of transport, communications, energy and poverty eradication. In this connection, fall of Kabul has also further increased its regional scope to connect with the Central Asian Region (CAR).
In this connection, with the arrival of the new Ambassador of Kazakhstan H.E. Yerzhan Kistafin, in Islamabad, efforts of achieving greater regional connectivity have been getting “momentum”. He has been constantly meeting with various chambers of commerce representatives, business community, potential investors and industrialists in the country for further strengthening of bilateral trade.
While meeting with the business community, H.E. Kistafin said that both countries need to work to establish a cost-effective transport system. Rail and road network up-gradation under the CPEC can be utilised for this purpose, as China and Kazakhstan share a long border with each other.
Most recently, the Embassy of Kazakhstan in Pakistan held the first online meeting of the Joint Working Group on trade and investment on November 15. The event was attended by representatives of the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan, “JSC” “NC” “QazTrade Center for Trade and Policy Development”, JSC «NC «Kazakh Invest» Invest Kazakhstan, the Ministry of Communications of Pakistan, as well as the Embassy of Pakistan in Kazakhstan. The issues of trade & investment, simplification of banking and customs operations between the two countries were also discussed.
While meeting with FPCCI the Kazakh Ambassador termed bilateral relations between the two sides ideal that should be translated into diverse fields of economy. He upheld that both sides should work for greater regional connectivity through innovative commercial diplomacy.
In this regard, consequently, Joint Working Group meetings on transportation were held on November 12 and Trade and Investment on November 15. The Pakistan embassy in Kazakhstan said that Pakistan has signed the Transports Internationaux Routiers (TIR) convention on logistics and transportation which can significantly reduce cargo cost between the two sides.
According to Chambers International Chairman Ayan Yerenov of Kazakhstan, the two sides will be arranging a high-profile Kazakh-Pakistan Joint Business Council conference in the second week of January 2022 and a trade exhibition during that same period in the following year.
During his maiden visit to Lahore Kazakh Ambassador visited Lahore Chamber of Commerce & Industry and met with its senior management. Speaking on the occasion, he said that promoting cooperation between the two countries will benefit the entire Central Asian region. The Ambassador also met representatives of All Pakistan Textile Mills Association and thoroughly discussed prospects of joint ventures between the two sides.
The Ambassador labeled Pakistan an attractive market for foreign investors, adding that Prime Minister Imran Khan had discussed the prospects of bilateral economic cooperation during his meeting with the Kazakh President in Dushanbe. Moreover, the Kazakh President will visit Pakistan next year. He briefed that Pak-Kazakh Inter-governmental Commission has now agreed to establish three working groups on cooperation in economy, energy and regional connectivity.
Addressing the business community during his visit to the Islamabad Chamber of Commerce and Industry (ICCI) he urged for enhancing business-to-business contacts between private sectors of both countries to explore new avenues of two-way trade promotion.
He was of the view that both countries should perform trade activities in diverse areas. He termed Pakistan a regional hub for transit trade and investment with the completion of the CPEC. He exhorted Kazakh investors to explore joint ventures and investment opportunities in Pakistan.
Now Kazakhstan is rigorously pursuing greater regional connectivity with outer-regional countries like Pakistan. In this connection, Kazakhstan has participated in the Central Asia Regional Economic Cooperation (CAREC) Program since 1997.
The route became an integral part of CAREC Corridor 1, one of the six CAREC corridors in the current version of the Silk Road, which stretches from China to Azerbaijan, in the Caucasus, and farther west to Europe; and from south Kazakhstan to the ports of Pakistan. Thus the role of CPEC is immense.
Furthermore, Kazakhstan is a member of Quadrilateral Traffic-in-Transit Agreement (QTTA) which will hopefully facilitate regional integration and enhance economic development by providing an alternate transport corridor between CAR and Pakistan.
Kazakhstan’s Khorgos Gateway (KGW) connects it with China by rail. Hopefully after its completion it will be the world’s biggest dry port. For further regional connectivity, the policy makers of Pakistan should also consider utilizing this dry port to enhance bilateral trade & commerce activities with Kazakhstan.
In terms of economic corridor, Kazakhstan is the “connecting hub” of Chinese One Belt & One Road Initiative (BRI) and Pakistan’s CPEC, the flagship project, may be combined to achieve the ultimate goal of greater regional connectivity.
Kazakhstan is the largest Republic of the CAR and the ninth largest in the world in territory. It is the biggest economy of CAR. It is the biggest recipient of Foreign Direct Investment (FDI) US$350 billion in the last thirty years.
In this context, Kazakhstan is the ideal trade gateway to a market of about 150 million consumers in the Caspian Sea countries, 50 million in Central Asia and 300 million in Western China. Thus the ideal combination of BRI & CPEC would be mutually beneficial for both the countries in the days to come.
It has a number of specific economic zones which have various tax incentives and a favourable environment for seeking more and more inflows of FDI. With the vast development in the technology sector, the government is looking into making the conditions for foreigners to do business in Kazakhstan with benefits. It will further enhance digital cooperation between Pakistan and Kazakhstan. Thus CPEC Digital Corridor would be helpful.
To conclude, the model of Cluster Trans-Regional Trade (CTRT) should also be pursued. In this direction, Trade Houses in Nur Sultan & Karachi may provide strategic opportunities to increase bilateral trade volumes between both sides and the rest of the CARs. There is an urgent need to have “direct communication” between the businessmen and people of the two countries.
Close cooperation between the private sectors of both countries should be a game changer for joint ventures in textiles, pharmaceuticals, agriculture, education and other sectors of the economy.
Close cooperation between leading universities of both the countries should be matured as soon as possible. Formation of Corridor of Knowledge (CK) is the need of the hour. Cultural diplomacy should be part and parcel of rigorous commercial diplomacy.
Joint Pak-Kazak Development Agency, Joint Chamber of Commerce, Joint Investment Company, Joint Merchandized Shipment Company and Joint Custom Clearance & Forwarding Company would create “befitting propositions” for both the countries.
CPEC has become a “simulation” of rampant industrialization, energy production and regional connectivity and it would be helpful for Kazakhstan to overcome its landlocked status for achieving greater regional connectivity.
Right choice of genuine think-tanks, experts of applied economics, international marketing, strategists, journalists and business partners would be a value-addition for Kazakhstan to achieve its ultimate goals of greater regional connectivity under the flagship project of CPEC.