CPEC - Truth Dawns On Pak

All weather friendship: Pakistan sees CPEC as a magic wand that will make all its economic wo...
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All weather friendship: Pakistan

sees CPEC as a magic wand that will
make all its economic woes
disappear overnight
Economic Times
By Tilak Devasher
There has been much jubilation in Pakistan over the formal launch
of the $46-billion China-Pakistan Economic Corridor (CPEC) from
Gwadar in Balochistan to Kashgar in Xinjiang during the visit of the
Chinese President Xi Jinping to Pakistan in April 2015.
Despite the euphoria, no doubt aimed partly at the US and partly at
India, six months later, as more details of the game-changing
project have come to light, it is clear that more than CPEC this is
going to be Chinas Pakistan Corridor (CPC).
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China has specific objectives. First, the Corridor, part of President

Xi Jinpings pet project of the Silk Road Economic Belt and the
21st-Century Maritime Silk Road, exploits Pakistans strategic
location to bypass the chokepoint of the Malacca Straits. Rerouting
part of its energy supplies to Xinjiang from the Persian Gulf via
Gwadar shortens the distance by several thousand km and lessens
the transport time by about 10 days. Second, the Corridor will
unlock the potential of landlocked western China, especially
Xinjiang. Third, by establishing its physical footprint in Gilgit
Baltistan, China hopes to cut off the ingress and egress of Uighur
militants enroute to Afghanistan and Pakistan for jihadi training.
Pakistan sees the project as a magic wand that will make all its
economic woes, especially energy, disappear almost overnight. The
biggest chunk of the investment of approximately $35 billion will be
allocated to expensive thermal energy projects based partly on
imported coal and LNG. These are expected to create about 17,000
MW of power. The energy crisis in Pakistan is not due to generation
but productivity, distribution and line losses. Thus, additional
generation will not solve the long-term issues plaguing the energy
sector.
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Moreover, Pakistan is yet to get its act together. First, barely had Xi
Jinping flown away, Balochistan and Khyber Pakhtunkhwa accused
the federal government of changing the Corridor route to benefit
Punjab and have threatened protests. Some are even calling it
China-Punjab Economic Corridor. The Balochistan government has
held the eastern route through Punjab to be longer and more
expensive than the original, making it economically unviable. Stung
by such criticism a cabinet minister has called those opposing CPEC
as traitors.
Second, Pak-China all weather friendship does not extend to
economics. For example, Pakistans attempts to reduce the tariff
from 14.15 cents to 9.25 cents per unit for the $1.5-billion 900 MW
solar power project being built by a Chinese company Zonergy has
put this project on hold and could adversely impact other Chinese
companies involved in CPEC. Another example is the 6,600 MW
Gadani energypark announced with much fanfare in August 2013.
By March 2015 it was shelved because the government failed to
provide profit guarantees to Chinese investors who wanted to take
up the project on their own terms.
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Third, apart from Pakistans large trade deficit with China for lack
of goods to export, the total trade between Xinjiang and Pakistan
was a paltry 2.6% of the total trade of around $12.35 billion in 2014.
For China, a major worry is the security of their 10,000-strong
workforce that will increase as the CPEC projects get online.
According to Pak media reports, over 200 security-related incidents
have taken place on the Balochistan stretch of the Corridor. The
statement of the Vice-Chairman of the Central Military Commission
of China, General Fen Changlong, during his mid-November visit to
Pakistan that China looked forward to close cooperation with
Pakistan to ensure security of CPEC was a clear signal that security
was a continuing concern.
Despite this, given the personal interest that Jinping is taking in the
project, China is likely to ensure that its objectives are met. With
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Pakistan seeing the project through the prism of Punjab, the

mega-project is becoming Chinas Pakistan Corridor rather than
China Pakistan Economic Corridor
(The author retired as Special Secretary, Cabinet Secretariat,
Government of India)
DISCLAIMER : Views expressed above are the author's own.
29/Dec/2015 1:57 PM

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All weather friendship: Pakistan sees CPEC as a magic wand that will make all its economic wo...

All weather friendship: Pakistan

China has specific objectives. First, the Corridor, part of President

Pakistan seeing the project through the prism of Punjab, the

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