Pakistan’s geostrategic crossroads location, connecting China with South Asia, the Middle East and Central Asia, was confirmed by the signing of agreements pertaining to the China Pakistan Economic Corridor (CPEC) during the visit of Chinese President Xi Jinping to Islamabad. Envisaging the construction of roads, rails and power plants, nearly $ 35 billion (of $ 46 million) is earmarked for the energy sector alone in the next 10 to 15 years. Concurrent private sector investment may likely dwarf this amount many times over. According to the Financial Times, “China will draw on its massive foreign exchange reserves to impact $ 62 billion into state-owned policy banks, the China Development Bank, Export-Import Bank of China and Agricultural Development Bank, supporting the ambitious ‘New Silk Road’ plans to build infrastructure linking foreign markets, deepening US unease about its waning influence in the region.” China had earlier obtained enormous diplomatic success in getting 50 countries to back the Asia Infra-structure Investment Bank (AIIB).
A veteran of the Pakistan desk at the Pentagon said that the 2009 to 2012 US aid package of $ 7.5 billion failed to make a strategic impact on Pakistan. Interviewed by the New York Times, David Sidney called the package a dramatic failure, the resources being scattered too thinly with no practical or strategic advantage. Designed to deliver a strategic result to deter terrorism it failed to so, whereas the Chinese came up with a much larger financial commitment focused on a specific area with signature concentration on infrastructure development over a decade long commitment. The US’s investment in Afghanistan, fighting the war against terrorism, was far more: $ 100 billion plus over the last 10 to 12 years keeping the country from falling apart economically, politically and militarily.
This generous US and western aid, along with aid from Japan and China, stabilised Afghanistan. Hope for the future came only recently (after the 2014 Afghanistan presidential elections) in the person of a visionary but pragmatic leader, Ashraf Ghani. Rapprochement with Pakistan — the centrepiece of his programme to restore peace in Afghanistan — has meant increased cooperation on the ground between Pakistan and the Afghan armed forces. Reduction of the trust deficit was underscored by General Sher Mohammad Karimi, the Afghan chief of staff, becoming the first foreign dignitary in Pakistan’s history to address a graduating class of the Pakistan Military Academy (PMA) parade at Kakul. Six Afghan army cadets are currently undergoing training at the PMA.
Meeting the services chiefs, Xi Jinping eulogised Pakistan’s successful offensive against militants in North Waziristan, followed by the clearing of militants from Swat and other areas of FATA, crucial for bringing peace to the area. He promised all out support for Pakistan in its military endeavours to bring stability to the region, the joint military co-production of JF-17 Thunder aircraft and tanks etc. being visible signs of that. The US has been every generous to Pakistan by helping it in overcoming grave financial and economic crises. However, military aid came with “do more” admonitions ad nauseam.
Running about 3,000 kilometres from Kashgar in Sinkiang province to Gwadar, the CPEC, expected to be completed by 2030, is a force-multiplier. As many as 51 agreements are earmarked for $ 28 billion early harvest projects and $ 17 billion plus are in the pipeline. Bloomberg Business (April 1, 2015) says, “The move represents a shift towards greater economic cooperation between China and Pakistan, which has close security ties and common disputes with neighbouring India. The corridor will give China access to the Indian Ocean and lead to investments that would help ease power shortages hindering economic growth in Pakistan.” The CPEC will connect economic agents centred on economic hubs and nodes along a defined geography where economic resources and actors are concentrated, says ADB, linking the supply and demand sides of the markets. With most financial resources being deployed in the next six years, “most benefits will not become apparent immediately but will materialise by 2017, or even 2018. Moody’s Investor Service says some benefits from the CPEC’s construction will likely begin accruing earlier. Moreover, western countries will also invest in the resultant economic boom; investors never shy away from the sight of gold whatever their ideological inclinations.
Increasing our capacity to absorb the economic, political and military largesse that the China crossroads will bring us, we must also reduce our capacity for corruption. The CPEC must benefit the impoverished people of Pakistan, not those who siphon off money in suitcases to buy property around London’s Hyde Park or on Dubai’s Palm Island. We should request President Xi Jinping to tell us how he is targeting the hitherto ‘untouchable’ and corrupt high and mighty, making them accountable.
Mushahid Hussain says the regional integration of “greater South Asia”, which includes China, Iran and Afghanistan, will stretch all the way to Myanmar. Given rapprochement with India on Kashmir, the CPEC will act as an economic force multiplier for South Asia with India as a major beneficiary connecting it across the land bridge of Pakistan with Central Asia and the Middle East. With the US-Iran nuclear deal in the offing, US sanctions will likely be lifted, paving the way for the Iran-Pakistan-India (IPI) gas pipeline, with energy boosting manufacturing across the energy-short region drastically changing the economic landscape. Providing cheap labour and the shortest secure land opening to the markets the Chinese are already looking for, Chinese factories relocating along the CPEC in clusters of economic zones will add to our economic boom. For China and Pakistan the CPEC factor is positive in both ways and the strategic force multiplier impact of the China crossroads is immeasurable for both countries.
The writer is a defence analyst and security expert