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CPEC Phase-II and Reshaping of Geo-economics and Geopolitics in South Asia

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China-Pakistan Economic Corridor (CPEC) has completed its first decade successfully and entered into its second phase in the country. Phase-II entails substantial industrialization, the establishment of numerous special economic free zones, social development initiatives, the revitalization of the railway transport system (ML-I), agricultural cooperation, advancements in health, culture, and education collaborations, the expansion of renewable energy sources (wind, solar), and most importantly, the enhancement of human capital to achieve our envisioned goals of socio-economic prosperity. This includes eradicating poverty, generating new jobs, earning foreign reserves through increased production, and subsequently boosting exports in the foreseeable future. It is predicted that the completion of these mega-projects will be instrumental in the quick revival of our macro-economy and will also stimulate prospects for greater trans-regional connectivity.”

On the other hand, there are concerns that complex and complicated geo-economic and geo-politics of South Asia will affect the pace and effectiveness of the CPEC Phase-II. The imminent political and electioneering’s trans-regional spillover repercussions of Indian upcoming elections 2024, immense economic rise of India, military alliance with USA, geographical maneuverings in Nepal, Bhutan and Maldives, proxies in Afghanistan, Iran and even in Central Asia would directly or indirectly affect the execution, implementation and completion of the CPEC Phase-II in the country.

Despite China’s close economic ties and political guidance to the interim set-up of Taliban, the law and order situation has already increased cross-border firing and infiltration incidents in the country. Moreover, massive repatriation of illegal Afghan refugees has serious security risks and resultantly faulty lines have already surfaced in the shape of terrorism menace in the country. Moreover, Afghanistan’s hydro-hegemony policy has irked its six neighbors which are heavily dependent on the country’s water resources. The construction of Qosh Tepa Irrigation Canal, which will divert large volumes of water from the dwindling trans-boundary Amu Darya River will badly affect Uzbekistan, Turkmenistan and many other regional countries thus dreams of trans-regional connectivity will be compressed and compromised. Additionally, the reemergence of terrorism and an increase in suicide attacks in Pakistan would jeopardize economic prosperity, political stability, social harmony and ethnic comfort zones in the country. Regions like Balochistan, KPK and even parts of Punjab would once again face threats due to anti-human and anti-development forces in the region.

These forces of darkness have foreign linkages and sponsorship to launch a new hybrid war against Pakistan and, of course, our strategic assets like CPEC, China-Pakistan friendship and last but not the least, economic sovereignty which needs to be rectified through joint and sincere efforts at every level from top to bottom because peace, prosperity and national dignity is at stake. Moreover, building of numerous economic/transport corridors would also affect the CPEC Phase-II. At the G20 summit President Joe Biden announced that India, Saudi Arabia and the United Arab Emirates (UAE), together with Israel, France, Germany, Italy and the US, want to create an ‘India, Middle East-Europe Corridor’ (IMEC).

According to various sources, this rail and shipping route would include advanced fibre optics, clean hydrogen pipelines and economic zones stretching from India, through the UAE, Saudi Arabia, Jordan and Israel, to Piraeus Port in Greece. It would be the first giant step to fire up normalization with Saudi Arabia, a diplomatic effort integral to US strategy in the Middle East. Furthermore, Israel’s National Security Adviser, Tzachi Hanegbi, called the corridor ‘the most meaningful evidence” that both sides are moving from ‘a shot in the dark’ towards meaningful efforts to normalize relations between the two countries. However, the ongoing Israel-Palestine or Israel-Hamas war has somehow delayed the pace of Israel-Saudi normalization.

To achieve this strategic goal, the Biden Administration has been pushing for a deal as part of a broader plan to contain Iran and check China’s expanding influence in the Middle East (A Beijing-brokered deal to restore Saudi-Iran diplomatic ties, announced in March, was a wake-up call for Washington). The US plan aims to reshape the Middle East’s geo-economic landscape through connectivity projects like IMEC, helping to alleviate Gulf countries’ doubts about its commitment, reduce tension with Iran and bolster its leadership in the Gulf. The corridor would complement other coalitions of friendly powers such as the India-UAE-Israel-US I2U2 and the G7-led Partnership for Global Infrastructure and Investment (PGI) seen as a rival of China’s Belt and Road Initiative (BRI).

In summary, the policy makers of Pakistan and China should take all possible measures to ensure safety and security of the Chinese workers and CPEC projects in the country because emerging socio-economic, geopolitical and geostrategic war mongering would create serious hurdles for the projects of CPEC Phase-II in the country. The joint hybrid security system would be pursued and implemented.

Regional proxies have already taken Pakistan hostage, affecting peace, stability, prosperity and harmony which should be handled with open eyes without creating unnecessary war hysteria through options of diplomacy, dialogue and determination with all regional stakeholders convincing them that greater trans-regional connectivity would be game and fate changers for the whole South Asia in the days to come. The policy makers should activate rigorous economic diplomacy with Iran, Saudi Arabia and the UAE to sustain trans-regional utility and productivity of the CPEC. The CPEC Phase-II would catalyze regional connectivity through the completion of ML-1, Gwadar seaport and even building of Sino-Pak Air Corridor between Gilgit Baltistan and Tashkurgan which must be pursued.

The policy makers should also accelerate the implementation of the Quadrilateral Traffic in Transit Agreement (QTTA) to build sustainable trade linkages with China, Pakistan, Kyrgyzstan and Kazakhstan. It is good omen that the first cargo assignment has been dispatched and reached Kazakhstan by bypassing Afghanistan which has now provided an alternative route for regional connectivity and bilateral trade between Pakistan and Central Asian countries. The CPEC’s connectivity with Xinjiang region would be a game changer in further enhancing the prospects of trans-regional connectivity between Pakistan and Central Asian countries in the days to come.

There is an urgent need to include projects of hydrogen power generation, lithium & sand batteries, hybrid agriculture, health cooperation, artificial intelligence development, re-allocation of higher industries in SEZs, transfer of technologies of wind & solar panels, disaster management capacity and, notably, green transformation to combat climate change in the country.

The snakes of geopolitics are ready to create another game and end game theories in South Asia which may be avoided through rigorous economic sustainability, trans-regional connectivity, digitalization, diversification of economy, modernization and complete activation of the SIFC in the country. The China-Pak friendship is the natural balancing act in the region to mitigate schemes of imperialism and hegemony which should not be weakened for the sake of personal linkages with others.

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