It was in May 2017 that the Pakistani Prime Minister Mr. Nawaz Sharif attended the Beijing conference on the One Belt One Road (OBOR) initiative. Beijing aims to implement its vision of global connectivity and cooperation in order to instigate increased trade among nations. China-Pakistan Economic Corridor (CPEC) project which is a part of OBOR is of special significance to Pakistan. Analysts go as far as terming it a game changer for Pakistan. Although ambitious in nature, the initiative has injected a wave of optimism and expectation in the local populace who see it as a salvation from their economic strife.
Beijing aims to implement its vision of global connectivity and cooperation in order to instigate increased trade among nations. China-Pakistan Economic Corridor (CPEC) project which is a part of OBOR is of special significance to Pakistan.
The congruent nature of both, CPEC and OBOR, necessitates a clarification of how these projects differ and what is the importance of one to the other. From a general perspective, OBOR is part of China’s grand strategy to expand its geopolitical footprint on the heels of geo-economics. It is their bid to morph the World Order in their own image, and all the while to gain an economic foothold by connecting China to Europe, the Gulf States, and the treasures of Africa. The main goal behind all of this is to have a larger share of the trade and commerce pie worldwide. The secondary objective, meanwhile, is to introduce Chinese goods in the newly formed land and sea routes. Additionally, the last objective is to manage cheap energy reservoirs across the routes to and from China according to its thriving economic base.
As for CPEC, it is one of the projects introduced as a part of the OBOR initiative in Pakistan. It is estimated that about 60 countries will be connected to China directly for trade purposes. The increased reliance of these countries on Chinese goods and services will, in turn, be paid by China in terms of development projects in the linked countries. However, its importance and dividends to both Pakistan and China may turn out to be far greater than the other projects under OBOR. Gwadar has taken the spotlight in the CPEC project due to its geostrategic benefits. For one, China now faces 12 thousand kilometres fewer than it did before to reach the warm waters that Pakistan enjoys. This could not have come at a better time for China since its economy had started to shrink after a decade of double-digit growth rate. In economic terms, every country reaches a particular point in its development curve at which point, either the country takes a plunge or it reenergises itself and achieves further growth. Observers point out this stage in China’s development and maturity curve as that very point, from where they believe it can achieve new heights of economic growth and development.
The initial investment of $46bn has been increased further to roughly $54 bn.
Pakistan does not take a backseat in this episode. The initial investment of $46bn has been increased further to roughly $54 bn. The much-needed investment would serve as the first step towards an era free from the clutches of the IMF and World Bank for Pakistan. Furthermore, it is estimated that about 70 to 90 thousand jobs will be created in the country. Not only this, the CPEC also holds promise to provide a relative relief from the national energy woes via multiple coal-powered energy plants. Meanwhile, the benefits in terms of infrastructure development and expanded international market for exports are additional perks of this “game changing” project.
It is entirely possible though that while gaping at the economic side of the benefits; one might so easily overlook the larger picture. The congruency between CPEC and OBOR is not only in terms of trade and economic terms but in strategic and geopolitical aspects too. Pakistan is already engaged in fending off militant organisations operating allegedly with Indian support, within its borders. A prudent view of the matter would suggest that there is a significant danger of the spillage of terrorism into the neighbouring borders. Beijing would be wary of this threat especially since it would not be a hard task to fuel anarchy in a communist society marred with separatist tendencies and characterised by aversion from religious beliefs. CPEC provides China an increased stake in the situation and makes a stable Pakistan an interest of Beijing. Furthermore, China’s involvement may also discourage Delhi from interfering in Pakistan for it might not want to irk Beijing in any way.
CPEC provides China an increased stake in the situation and makes a stable Pakistan an interest of Beijing. Furthermore, China’s involvement may also discourage Delhi from interfering in Pakistan for it might not want to irk Beijing in any way.
On a broader spectrum, China would gain a significant advantage in its bid to gain regional and global hegemony. With the USA leaning towards more isolated and protected policies under Trump, the windows of opportunity for Beijing are wide open and are begging to be cashed in. Over the better part of the century, free trade and fair competition could fix the evils of economic inequality. However, as both the USA and the UK look inwards rather than outwards, the time is ripe for Beijing to spearhead the campaign for international trade and mutual cooperation.
The OBOR initiative is too good an initiative to be hindered by institutional drawbacks, trivial administration and rent seeking.
With all this in mind, it is hardly surprising that more investment was promised to add to an already humongous $46 billion dollar project. Now for Pakistan, the need of the hour is to form even stronger bonds of friendship with its “iron brother” China. The commitments made under the MoUs signed with China need to be honoured and fulfilled. The OBOR initiative is too good an initiative to be hindered by institutional drawbacks, trivial administration and rent seeking. Both the parties will gain a lot from this initiative, but for a developing country like Pakistan, it is even more pertinent that this opportunity is grasped with both hands and its fruits reaped gratefully.
is a graduate of School of Economics, Quaid-i-Azam University, Islamabad (QAU). His field of expertise is Pure Economics. Currently, he is working at the CSCR. He has also volunteered at World Peace Organization in the Research Section.