Karakoram Highway & FTA

Dr Habib Gul

KARAKORAM Highway one of the engineering wonders, crossing four great mountain ranges, the Himalayas, the Karakoram, the Hindu Kush and the Pamir was officially opened for traffic on June 18, 1978. It has very positive impact on the socio-economic life of tangible parts of Gilgit-Baltistan, Malakand and Hazara divisions and hitherto inaccessible areas of the region. It has paved the way for visiting to Northern region of Pakistan, China and onward to the South East Asia by road or by air from China. After crossing the Khunjrab valley of Gilgit-Baltistan, it enters into the Autonomous Region of Uighur Sinkiang of the People Republic of China. Tajikistan, Afghanistan and India are situated close to this Highway. This Highway has a great strategic and economic importance, both for Pakistan and China.
Under the CPEC, the KKH between Khunjrab Pass and Havelian is scheduled to be expand, reconstructed and overhauled which will allow the link between Sinkiang and Gwadar port safer. The KKH is the highest gift of infrastructure given by Pakistan and China to the settlements passing through it and situated in surroundings. It is not wrong to say that the actual progress in the region began after construction of this engineering miracle. Karakoram Highway is a project of hope and change. Several hydropower plants and towns are situated adjacent to it. Gwadar is the nearest port of Chinese Western Region which contributes 20 % to Chinese economic activities. Gwadar through KKH with efficient transport network will provide access to crude oil and other natural resources, particularly from Middle East, necessary for Chinese development. Of course, a reasonable size of export and import will flow through this Highway.
China, indeed is our all-weather established friend. However, after robust economic development and signing Free Trade Agreement, particularly FTA-II with Pakistan, our industries have been negatively affected. China is exporting inferior quality consumer and non-consumer goods to Pakistan at price fixed by her and Chinese markets have been spread so widely, almost in all towns and cities of Pakistan. There are even ten grades of a commodity which ruthlessly affect innocent people. Sometime back, bulldozers were purchased by the Government of Balochistan which were found degrade quality, buses and railway engines are another examples of useless machinery, especially manufactured for Pakistan. Chinese has a policy of importing primary products by processing it in her own territory. It will severely harm Pakistan’s interest. Chinese imported US $88 billion worth of fuel and lubricant from Middle East in which $ 77 bn was processed in her own territory. Processing of US $ 5-7 billion primary (crude oil) in Pakistan under CPEC will satisfy a reasonable part of the Western Route dwellers by installation of refineries there. The FTA-II between China and Pakistan is only in favour of China and harmful for the Pakistan. China export to Pakistan is US $ 9 billion against import from Pakistan of US $ 2 billion. The flow of hard currency by Pakistani tourists visiting to Sinkiang and other parts of China through KKH is not included in these figures. Chinese tourists seldom visit to Pakistan and China wants to expand her export to Pakistan and insisting for exemption from regulatory duty.
Under Strategic Trade policy Framework (STPF) 2015-18, known for ambitious export target of $ 35 billion by 2018, product including rice, yarn, fabrics and garments are supported to promote to China. This trend of STPF will not protect Pakistan’s industries, agriculture and increase poverty as no processing term or value added clause is included in the STPF or CPEC. Pakistan needs strong essential industrial policy otherwise may fail to achieve positive target for the CPEC like FTA. At present, the export from Pakistan to China is 70 percent cotton yarn and China has captured some of our markets, such as Janimaz (Musallah) export to Saudi Arabia. Pakistan may insist on China, particularly through CPEC to promote value addition within Pakistan. Crude oil like primary commodities imports through Gwader may be converted to value added goods within Pakistan before transporting to China. In case the KKH is used as a route of transporting primary or goods processed outside Pakistan, it will highly negative affect on the Pakistan’s balance of payment. The transporters bringing these goods to China from Gwadar will come back with cheap and inferior quality loaders at return journey.
Karakoram Highway has immense importance for both the countries and our Government understands its security. A total of 36 check posts with 1,300 hired men for Patrolling Force would be set up along the 390 KM stretch of the road passing through the KPK. The Federal Government has already established a patrolling force of one Division to be also assisted by the Gilgit-Baltistan Police force. We should not forget that Afghanistan, Tajikistan and India are the nearest countries situated to this world most difficult mountainous region.
— The writer is a former Deputy Director General, R.E, Pakistan Council of Renewable Energy Technologies, Government of Pakistan.

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