CPEC: The Next Big Thing in the Neighbourhood?

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Image Courtesy: Pakistan Today

(Published in The Assam Tribune, July 29, 2016) 

At a time when the construction of economic corridors has come up as an effective means to strengthen regional cooperation and promote development, the China-Pakistan Economic Corridor (CPEC) has been making headlines of late in the South Asian context. After the considerable success of such corridors in the neighbourhood – the Greater Mekong Sub-region (GMS) – CPEC is a significant attempt to accelerate economic growth in South Asia by linking remote and less developed places. The idea is to connect Kashgar in China’s Xingjiang Uygur Autonomous Region to the Gwadar port in Southwest Pakistan through a network of expressways, rail networks and pipelines. The initial proposal for a CPEC was floated in May 2013 during Chinese premier Li Keqiang’s visit to Pakistan. Pakistan welcomed the proposal with great enthusiasm and the two sides signed a MoU to cooperate on a ‘long-term’ plan. During the visit of Chinese President Xi Jinping to Pakistan in April 2015, the proposal took concrete shape with the signing of several agreements and MoUs between the two sides. The initial layout of the proposed project is breathtaking in itself. According to sources, the broad plan is to construct various industrial parks and economic zones, dams and energy stations across the length and breadth of Pakistan to be ultimately connected through an extensive network of expressways, railway networks and pipelines. The estimated cost of the project is to be around USD 46 billion and is due for completion by 2030.
Implications of the CPEC for Pakistan, China and India
Described as the “fate changer”, the CPEC is expected to bring to Pakistan the much needed economic leap. At a time when the domestic economy of Pakistan is not keeping up well in comparison to neighbouring India, CPEC is expected to bring economic heydays for Islamabad. While expecting the CPEC to transform Pakistan into the next ‘Asian Tiger’ shall be an overstatement as of now, the project undoubtedly shall have a cascading effect on the overall economic and security dynamics in the region. With the main thrust of the project on energy and infrastructure, it is expected to bring investments equaling to three times the total FDI received by Pakistan in last decade. On the face of rapid urbanization of the economy, Pakistan is facing an acute energy shortage and the CPEC is expected to help Islamabad redeem itself of all power shortages. In March 2016, the Federal Petroleum Minister of Pakistan expressed that gas shortage in the country has grown up to 40 per cent of the total demand. Pakistan needs around 15,000 to 20,000 MW electricity per day, however, currently it is able to produce only 11,500 MW per day hence there is a shortfall of about 4000 to 9000 MW per day. As much as 17,045 MW of energy is expected to be generated through various CPEC projects in total. Given the history of fierce military takeovers of civilian governments and the ever existing tussle between the army and the civilian establishment, the CPEC is of even more relevance for the current civilian dispensation led by Nawaz Shariff. As the parliamentary elections in Pakistan are round the corner in 2018, the successful implementation of the project shall be essential to establish the legitimacy of the civilian establishment as a whole.   
In the newly emerging global order where the onus on China is to effectively shift the power alignments and the centre of economic gravity, CPEC appears to be a crucial move. Beijing’s approach of deploying geo-economic strategies by investing heavily in ambitious projects across regions and continents has already been manifested through the “One Belt One Road” project and CPEC is expected to be a part of China’s grand strategy. While further strengthening the Sino-Pak camaraderie the CPEC is expected to better position China strategically in South Asia in particular and the greater Indo-Pacific region in general. The CPEC shall redeem Beijing of the connectivity bottlenecks in its landlocked Western provinces (Xinjiang in particular) by ensuring a direct access to the Gwadar port. The project shall in a way woo the Uyghurs by assuring them of greater economic prosperity. Successful completion of the CPEC shall provide China a shorter and cheaper access to the oil reserves of the Middle East. China thus will be able to bypass the long distance and strategically critical route through the Strait of Malacca which anyways has eventually come to witness greater and greater US presence.
As for India, the major concern of course is the fact that the proposed corridor shall pass through the Gilgit-Baltistan (GB) region of the Pakistan occupied Kashmir (PoK) which India claims to be a part of the erstwhile princely state of Jammu and Kashmir. There are expectations for investments in GB on industrial parks, hydropower projects, roads, railway lines etc where China already has a history of investments. India thus faces this dilemma of whether to get on board this promising project because participating in the project shall require a major shift in India’s policy on GB. India’s participation may in a way appear as acquiescing to the Sino-Pak bonhomie and shall accord legitimacy to Islamabad’s claims over GB. As reported by NDTV on 13 March 2016, Chinese troops will be positioned in Pakistan to protect the 3000kms long proposed corridor. In addition, Pakistan has raised three independent infantry brigades – each brigade consisting of about 1000 soldiers to protect the highway. As reported by the Financial Times on 21 July 2016, China wants the Pakistan Army to play a greater role in the administration of the CPEC. The rapid securitization of Pakistan in the name of securing economic interests and the presence of Chinese troops just across the border is of course not a welcome situation for New Delhi. The growing influence of the Pakistani Army in respect to the CPEC leaves open possibilities that the so called economic corridor might be used as a strategic and military venture to contain and balance India in South Asia. While on the one hand the ongoing alteration in Pakistan under the banner of CPEC might turn up as an alarming situation for India, on the other hand a stable and economically strong Pakistan is a prerequisite for stability in the South Asian region and CPEC undoubtedly has the potential to help attain all this.

Uddipta Ranjan Boruah
Doctoral Student
Department of International Relations
South Asian University


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