Millennium Post

CPEC strengthens Pak-China links

Islamabad is hopeful of massive employment generation, writes Sankar Ray.

Although New Delhi and a section of free-thinking Pakistani intellectuals are critical about the China-Pakistan Economic Corridor (CPEC), there is a growing support for the US $75 billion handshake, primarily funded by the Export-Import Bank of China. US-based consulting firm Deloitte and Touche estimates that CPEC projects are expected to add over 2 million direct and indirect jobs to Pakistan's economy and boost the country's GDP growth rate to 7.5%. The massive project is slated to be a game-changer for Pakistan.

The CPEC was intimated with the inking of a Memorandum of Understanding (MoU) in Beijing in July 2013. Reports indicate that the MoU was signed in the presence of the Chinese Premier Li Keqiang and Pakistani Prime Minister Nawaz Sharif. The objective is the enhancement of regional economic integration in investment, energy, trade and communication. The aim is to create linkages between the Western region of China and Pakistan by establishing communication links and developing economic and trade corridors that would facilitate business.

The CPEC spans over a 3000-kilometre route. The corridor is expected to be operational by 2020, incurring an expenditure of $46 billion. The Gwadar International Airport and major developments of Gwadar Port are expected to be completed by this year, followed by the expansion of Karakoram Highway—the road that connects China with Pakistan—and placement of fiber-optic line ensuring better communication between the two countries. Estimates suggest that the implementation of projects under the CPEC would pave the way for an unprecedented rise in direct foreign direct investment which would account for 17% of GDP, according to the Deloitte and Touche exercise.

According to China Daily, the gigantic venture will increase electricity generation capacity by 16,400 megawatts plus 1,100-kilometer long motorway between Karachi and Lahore. The Karakoram Highway between Rawalpindi and the Chinese border is scheduled to be rebuilt entirely. The Karachi–Peshawar main railway line is also to be upgraded, helping trains move at up to 160 km an hour by December 2019. Pakistan's rail network will also be extended to connect to China's Southern Xinjiang Railway in Kashgar. Furthermore, a network of pipelines to transport liquefied natural gas and oil is also in the works, apart from a $2.5 billion pipeline between Gwadar and Nawabshah to transport gas from Iran. Oil from the Middle East could be offloaded at Gwadar and transported to China through the corridor, cutting the current 12,000 km journey to 2,395 km. This will open up the new Maritime Silk Route linking three billion people in Asia, Africa and Europe, part of a trans-Eurasian project. When fully operational, Gwadar will become a gateway for Central Asian countries, including Afghanistan, Uzbekistan, linking Sri Lanka, Iran and Xinjiang to undertake marine transport.

For Pakistan, CPEC has generated optimism for a massive reduction of energy deficit out of a $33 billion-plus worth of energy infrastructure, to be constructed up by private consortia. Between 2018 and 2020, 10,400 MW of power generation facilities would be installed.

Another area to be opened up is tourism between the Gilgit–Baltistan areas, covering the 73,000 square km mountaineer's coveted destination. The region in inhabited by over five thousand people amid peaks above 8,000 metres and more than 50 mountains over 7,000 metres. The world's second highest peak K2 is situated there.

But there is resentment about the CPEC as well. People are genuinely worried about the widespread displacement of the locals. "Of the 73,000 square kilometres, cultivable land is just 1%. If rich investors also swallow that from outside, we will become a minority and economically subservient once there will be no farmland or orchards left to earn our livelihood from," a local businessman, told Gilgit Times. Local merchants apart, the energy experts are sharply divided on the long-term benefits of CPEC which "'has just highlighted the imbalance in provinces with the largest one, Punjab," states Vaqar Zakaria, energy expert and managing director of environmental consultancy firm Hagler Bailly Pakistan.

The International Union for Conservation of Nature (IUCN) chapters in Pakistan and China want the two governments to take care of environmental concerns in the CPEC and lay stress on consultations with other stakeholders. "What we are suggesting is not just ways to secure these areas, but also to identify and declare more parts of land as protected which are of ecological significance," said IUCN country representative in Pakistan Mahmood Akhtar Cheema. The mega-venture will apparently ensure a robust diplomatic, economic and strategic bond between China and Pakistan but there are things hidden in the deal. Some former Pakistani diplomats are apprehensive of greater economic bondage in favour of China in the main.

(The views expressed are strictly personal.)
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