Tuesday, April 28, 2015

A Strategic Game Changer

With hardship comes ease: Hopefully, Pakistan is poised for good economic times ahead: It has Saudi Arabia and China as reliable allies. The fact is both China and Saudi Arabia are also strategically important to each other. No doubt, China being “an all weather friend of Pakistan” wants to further strengthen its existing relationship through investing there heavily in pursuit of long-term gain. The recent CPEC (China-Pakistan Economic Corridor) agreements clearly show China’s intent to deepen its ties with Pakistan in the long run. There is an unprecedented state of joy after the successful conclusion of the Chinese president’s visit. Investment of over $46 billion in the energy sector, infrastructure and the projected economic corridor can be a real game changer in the making. The huge Chinese investment is indicative of Pakistan’s sovereignty is safe from all pressures.

Unpleasant facts:

Firstly, Pakistani people welcome the above said investment but it’s painful for them to learn that some members of the elite class of Pakistan have deposited a huge sum totalling around $97 billion in the Swiss banks. Even the ruling elite (current and the former) have deposits in London banks and Dubai banks as well. Most of the money belongs to the national exchequer of Pakistan. Upon re-investing all such money back in Pakistan instead, would serve the interests of Pakistan for sure.

Secondly, discriminating against provinces set a bad example: During the state visit of Chinese president, taking only the Chief Minister Punjab on board while ignoring all other chief ministers altogether is unfair; this sets a bad example. The silly ruling elite are responsible for the resulted irritation, indeed.

Good News: Democratic thoughts are taking over; the security threats against Pakistan are dying down.

And, there is another positive development: The Supreme Court ordered LG polls have been conducted transparently. All of this gives a real boost to the current government.

Furthermore, China’s partnership with Pakistan is said to be hinging on the assumption that there would remain calm from now on; that would open doors for smoother business.

Chinese want smooth sailing through this route while earning profit on their money. The burden of maintaining long-term order clearly lies with Pakistan.

Pak re-positioning:

The fact is Pakistan security forces are already too engaged on many fronts to make Pakistan fully secured from all internal and external threats.

As said above, President Xi Jinping visited Pakistan with huge investment to build an economic corridor from Western China to the Persian Gulf. The Sharifs promised Xi that Pakistan would create a new special division of the Pakistani Army to protect Chinese workers in Pakistan. A special security division consisting of 10,000 troops including 5000 SSG commandos. There are no troops for Saudi Arabia at this time.

Of course, Pakistan’s handling of Yemen factor did irk Saudi Arabia initially, however, Pakistan’s re-assurance eased tension as Prime Minister Nawaz Sharif and the army chief Raheel Sharif visited Riyadh for a timely damage control. Nevertheless, Saudi Arabia has rightly realized that even close allies often have other priorities.

The PM Pakistan and Pak army Chief had to fly to Saudi Arabia to explain to the Saudis why Pakistan won't join the war in Yemen.

The corridor: The importance of long awaited development can’t be over emphasized. Certainly, the China–Pakistan Economic Corridor (CPEC)[a] is a development megaproject that aims to connect Gwadar Port in southwestern Pakistan to China’s northwestern autonomous region ofXinjiang, via a network of Highways, Railwaysand pipelines to transport oil and gas.[1]"Pakistan-China friendship is higher than the mountains, deeper than the oceans, sweeter than honey, and stronger than steel." [14]

Hong Kong’s South China Morning Post has described the project in an editorial as the most significant and far-reaching project China has ever put forward. It seeks to expand the Chinese economy by first creating mega project construction opportunities for Chinese firms and then by spreading out markets for its manufactured goods. The plan is to accelerate growth in China’s western regions and then integrate China’s markets with Eurasia, the Middle East and Africa.

Its one component, the Silk Road Economic Belt would connect Western China to Central Asia and Europe overland, while the other, the 21st-Century Maritime Silk Road would substantiate the link between Chinese seaports and the Middle East, Africa and the Mediterranean.

Two kinds of projects are to be implemented under the proposed economic corridor:

A - Infrastructure projects (Gwadar Port, KKR highway, road and rail development (government to government).

B - The 10,000MW of power projects, (most of them to be sponsored by private Pakistani companies).

Chinese state companies do possess a“demonstrated ability” to execute the infrastructure projects efficiently on time.

Security situation: Pakistan Army will provide dedicated security.

The fear: Pak bureaucratic incompetence or corruption may hinder the implementation of these projects.

Benefits: The successful implementation of the economic corridor projects would create ancillary opportunities and benefits as follows:

1.     Energy availability would revive existing industries, such as textiles, to full production and add an estimated 2 percent to Pakistan’s GDP growth.

2.     The improved transportation network would accelerate and expand internal and external trade.

3.     The areas adjacent to the corridor would become attractive locations for manufacturing, agricultural and services industries. Small and medium enterprises included as special beneficiaries.

4.     Employment and economic growth would expand significantly.

The Chinese commitment to the economic corridor has created a significant opportunity for Pakistan to revive its economic and political stability leading to its renewed international image.

Most of the Pakistanis are on the same page with the government for having made a strategic calculation to go all the way with China on this path of prosperity. It is a step in the right direction that can potentially shake regional politics making enough room for geo economics.



www.Dawn.com, www.thenews.com,pk,www.nation.com.pk http://www.wantchinatimes.com/news-subclass-       cnt.aspx?id=20150426000082&cid=1101, http://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor

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