Ejecting CPEC: Back to the future | By Syed Qamar Afzal Rizvi

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Ejecting CPEC: Back to the future

LAST week, China commended Pakistan Prime Minister Shehbaz Sharif’s remarks on the construction of China-Pakistan Economic Corridor (CPEC), saying that Beijing was ready to work with Islamabad.

The Prime Minister, Shehbaz Sharif had previously spoken highly of the CPEC several times, calling it an ambitious blueprint to transform Pakistan into a major emerging economy so that the less developed parts of the country could enjoy the dividends of development.

’’ China-Pakistan Economic Corridor is a strategic economic project to enhance economic connectivity between Pakistan and China.

We estimate the impact of CPEC related economic activities on overall energy consumption and its saving potential for Pakistan by 2030’’.

Being technically slowed down in the past, hopefully, the CPEC is to move towards a remarkable direction and speed.

The foundations of the Pakistan-China flagship project—CPEC (part of China’s Belt and Road Initiative(BRI)— were formally laid during Chinese Premier Li Keqiang’s visit to Islamabad in May 2013, but it registered an identical resonance during the reign of the Chinese President Xi Jinping.

Progressively, there were four stages of the CPEC: (i) early harvest, it covered the period 2015-2019.

In this stipulated schedule, the mega energy-related projects were set to be completed by 2019-adding approximately 7000 MW electricity to national grid and thus easing the energy shortage and load shedding that had crippled the industry and exports (ii); focusing on short-term projects up to 2022 mainly Roads, Gwadar Development, Optic fiber network and the Hydel, coal mining and power projects (iii); focusing on medium projects up to 2025 Railways and Industrial zones; (iv) Long term projects up to 2030, completion of Industrial zones, Agriculture, Tourism etc.

The eastern part covers the construction of highways and railway line linking Gwadar with Kashgar and the Mass Transit systems within big cities.

The rehabilitation and upgrading of Main Railway Line with High speed trains would relieve the businesses of high cost of domestic transportation of goods to and from Karachi as at present bulk of the freight is carried by trucking fleet.

Inner city Mass Transit systems in Lahore, Peshawar, Karachi and Quetta would provide safe and affordable public transport to the citizens who face a lot of inconveniences and spend a lot of time and money in commuting to work.

And yet, the Western route would open up the backward districts of Balochistan and Southern KP and integrate them with the national markets.

The communities living along the route would be able to produce and sell their mining, livestock and poultry, horticulture, fisheries output to a much larger segment of consumers.

Pakistan’s vision 2025 also projects rapid urbanization (50–60%) and high GDP growth rate (8%) by 2025 The boost in economic activity and rapid urbanization will derive the demand for fuel and energy at an exponential rate.

As Pakistan’s economy is already facing severe energy crisis, robust increase in economic activity and the energy consumption is expected to have a lasting impact on the energy supply security in the economy.

With the reduction in power outages due to enhancement in electricity generation capacity and investment in other production sectors of the economy, GDP growth rate of Pakistan is targeted to increase to 7.5% by 2030 with the addition of about two million jobs in the job market.

Whereas, CPEC-related projects are also aimed at constructing new routes and overhauling existing road infrastructure, thereby facilitating the trade and increasing accessibility to markets.

Transport infrastructure will involve the road network, railways, highways and energy tunnels.2500–3000? km roads will connect Gwadar port with Kashgar at a cost of 9784 million USD.

In the eight projects related to road and railway infrastructure, one railway project has been completed and operational and 70% work on Karachi-Lahore motorway has been completed.

While creating the free industrial zones is one of the key areas of economic cooperation under CPEC and are justifiably considered as a trustworthy strategy to foster the economic growth and employability into an economy—exclusively galvanized by nine special economic zones—characterized by specific products or services, will be established in all of the provinces in Pakistan along the corridor.

As a consequence, local production accompanied by local raw material and labour under the economic zones will speed up the urbanization process and the employability (expected 2 million jobs) with expected increase into high standard of living, reduced imports and price stability.

Moreover, on March 10, 2022, the signing ceremony of 1.2 million gallons per day water treatment plant took place at China Business Centre. It is a grant from the government of China for the people of Gwadar.

China Harbor Engineering Company (CHEC) has been granted the contract. Mr. Wu Ping represented CHEC.

Speaking on the occasion he presented a brief description of CHEC and the achievements they have attained in Pakistan so far.

As CPEC evolves, natural selection may decide the winners and losers. And here we may see federalism work to Pakistan’s benefit.

Equally, each Economic Zone is seeking Chinese investment via an inter-provincial competition.

After a lull last year because of the exigencies entailed by geopolitical developments in the region provided vigour to CPEC projects in Pakistan.

As a result, two new deals for hydropower projects in Pakistan-administered Jammu & Kashmir were signed in quick succession, along with an agreement on a special economic zone (SEZ) in Faisalabad.

And most importantly, in order to cater to its growing energy and water needs, Pakistan may build more hydropower projects under the CPEC programme.

There are 11 under-construction hydel power projects under the CPEC. Geopolitically put, with the new tapestry of global alliances such as the QUAD, AUKUS, and the US-Japan-India—containing the ascendancy of China, on the one hand, while the South Asian archrivals ] India and Pakistan regional competition on the other, has given a boost to the CPEC trajectory.

Yet geoeconomically, the OBOR-affiliated CPEC will tremendously impact the globe. This trans-regional connectivity at its peak would further enhance the competitiveness of Chinese goods and services by reducing the transaction costs and expediting delivery time.

The BRI is China’s great soft power paradigm versus Western three seas trajectory. The CPEC will provide great connectivity between Central Asia, Eurasia, the Gulf and beyond.

While criticism regarding the slowness in CPEC-related activities is nonetheless valid, an unbiased insight warrants that concerns around debt sustainability, tepid economic growth and overall economic and social instability in Pakistan predate CPEC.

And above all, it is the lack of long-term ’’ structural reforms that has stymied equitable socioeconomic progress in Pakistan’’.

Yet China-Pakistan resilience will overcome the challenges for translating the CPEC vision.

—The writer, an independent ‘IR’ researcher-cum-international law analyst based in Pakistan, is member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies, also a member of Washington Foreign Law Society and European Society of International Law.

 

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