China-Pakistan Economic Corridor: Win-Win for All

Published in Hilal English

Written By: Sardar Masood Khan,

President Azad Jammu and Kashmir


There is a strong feeling in Pakistan that Washington should not act as a proxy for India’s foreign policy because of its own wider security and economic interests in the region. After all, the U.S. has had a long alliance with Pakistan and, despite the cyclical pattern of this relationship, both countries have accomplished many shared goals from time-to-time. Now being totally partisan to Pakistan’s strategic adversary does not sound like good judgement. Some semblance of balance would be a very healthy choice.

In a testimony before the U.S. Senate Armed Services Committee on October 3, 2017, Defence Secretary Jim Mattis said that “... the One Belt, One Road also goes through disputed territory and, I think, that in itself shows the vulnerability of trying to establish that sort of a dictate.” It was an indirect and fleeting reference to the China-Pakistan Economic Corridor (CPEC) as his main onslaught was China’s One Belt, One Road (OBOR), saying, “In a globalised world, there are many belts and many roads, and no one nation should put itself into a position of dictating ‘one belt, one road’.”


The remark pertaining to the China-Pakistan Economic Corridor (CPEC) was hailed in India as an endorsement of India’s opposition to the CPEC and as an indictment of both China and Pakistan. Indian analysts said that Mattis had made this statement following his meetings with Prime Minister Narendra Modi and Defence Minister Nirmala Sitharaman during his recent visit to India.

 

chinapakecocoridor.jpgIn Pakistan, expectedly, this remark kicked up a furore and the United States’ stance was widely repudiated because it was seen as Washington looking at the CPEC, a seminal undertaking for Pakistan, through the Indian Government’s prism. Pakistan officially stated that the CPEC was a project for development, prosperity and connectivity and highlighted the gross and massive violations of human rights by India in the Occupied Kashmir. China chose to downplay Mattis’ comment and Indian hype about it by saying that it was not trying to impose any project and pointed out that its Belt and Road Initiative (BRI) projects were based on the concept of “discuss, build, share”. China has all along maintained that the CPEC is designed to promote economic cooperation and connectivity and that it has no links with the sovereignty issues.


Why did Defence Secretary Mattis make such a sweeping statement? To put things in perspective, he did so in response to a very pointed and detailed question asked by Senator Charles Peters regarding China’s policy on OBOR: “The One Belt, One Road strategy seeks to secure China’s control over both the continental and the maritime interest, in their eventual hope of dominating Eurasia and exploiting natural resources there, things that are certainly at odds with U.S. policy. So what role do you see China playing in Afghanistan, and particularly related to their One Belt, One Road?”


As is obvious from the context, the reference by Defence Secretary Mattis to the CPEC and Jammu and Kashmir is forced and gratuitous. This is also a departure from the United States’ traditional policy of not making public remarks about the CPEC, its reservations on it notwithstanding. Officially Washington has always been prudent in its pronouncements on CPEC and has in fact on occasions said that China and the United States’ interests converge in regard to Pakistan’s stability and prosperity. “Non-official Washington” of course has been concerned because of the perceptions that the project has made Pakistan more assertive, riled up India and left the U.S. disconcerted.

 

The inflows of investment in Pakistan will benefit China and other foreign investors, including from the United States. Under existing and new bilateral agreements, the U.S. should encourage its high-end corporate sector to participate in the CPEC projects, especially those related to energy, infrastructure, industrialisation and ICT. This would help create a win-win situation. The U.S. and Pakistan should revive their macroeconomic cooperation as part of their strategic engagement, as already agreed between the two sides.

In Pakistan, the reaction was neuralgic because the U.S. statement had touched a raw nerve and the Indian media celebrated that Washington had vindicated Delhi’s hostile stance towards Pakistan. This is no ordinary project; it is Pakistan’s Marshall Plan after being ravaged for nearly four decades by the toxic detritus of Afghan wars, terrorism, asymmetric warfare and slow economic growth. The project is to give a huge boost to Pakistan’s economy and put bread on the table for the poor and lower middle class people. More importantly, it would put Pakistan in the list of top twenty economies of the world, a place it deserves to secure because of its population of 200 million, pivotal geographic location, abundant natural resources and rich human resource. In that sense for all segments of Pakistani society, it is pretty much a bread and butter issue. By the end of 2016, all political parties of Pakistan and the provincial governments had forged consensus on the CPEC. Opposing CPEC amounts to snatching bread from Pakistan's table. Nobody would understand the strategy in this context.


There is no doubt that Jammu and Kashmir is a disputed territory and for the past 70 years its people have been waiting for a just and lasting solution on the basis of the UN Security Council Resolutions. Simultaneously, they have been demanding an end to India’s brutal repression in the occupied territory. The U.S. recognises Jammu and Kashmir as a disputed territory and late last year President Donald Trump volunteered to mediate on Kashmir, an offer which was quickly rejected by India. But by any standard, it is counterintuitive to dictate that there should be no economic development in a disputed territory or that no foreign entrepreneurs should participate in economic enterprises in that region.

 

chinapakecocoridor1.jpgThis is skewed logic; because if that were an accepted political or legal norm at the international level, in the 1960s, Bennie and Partners of London would not have designed the Mangla Hydropower Dam, located in the territory of Azad Jammu and Kashmir, and it would not have been built by a U.S. consortium led by Guy Atkinson Company.


Neither international law nor judicial precedents and decisions nor practices in the disputed territories proscribe or limit economic transactions by third countries or nationals. Such activity is one hundred percent legitimate as witnessed in other disputed territories – Northern Cyprus, Nogorno-Karabakh, Abkhazia, Crimea, Western Sahara, Palestine and the Falklands/Malvinas, to name a few. Foreign investment flows to these disputed lands have not been blocked. International law and state practices allow a permissive rather than a restrictive approach to third countries, international consortia and multilateral development banks. Pending resolution of a dispute, the people of the territory have their recognised rights to receive foreign investment and enter into economic and commercial agreements.


Raising his concerns about the China-Pakistan Economic Corridor (CPEC) with President Xi Jing and Premier Li Keqiaq during his visit to Beijing in May 2015, Prime Minister Narendra Modi had termed the project “unacceptable” because it was passing through a disputed territory. At that time, Mr. Modi sounded petty and his objections were brushed aside by the Chinese leaders by responding that it was only an economic project. Since then, India’s visceral and tenacious opposition to the project leads one to conclude that India does not want Pakistan or any other country in the region to prosper and succeed economically. After all, the Karakoram Highway passing through the same territory has been operational since the late 1970s but India’s hostility to it was never so vehement as it is for the CPEC. The only difference between the Highway and the Corridor is that the latter promises more prosperity for Pakistan and has the potential to make Pakistan a regional investment and commercial hub.


The U.S. has a robust trade relationship with China; and it officially attended the Belt and Road Initiative Forum hosted by Chinese leadership in Beijing in May this year. Prior to attending the Forum, the U.S. Government said that it recognised the importance of the Belt and Road Initiative. Besides, the UN Security Council in March this year endorsed OBOR and the U.S. went along. Ambassador Liu Jieyi, the Chinese permanent representative to the UN, after the adoption of the resolution in New York, said that support to the “Chinese concept” of OBOR by the Security Council showed “consensus of the international community” and recognised “huge Chinese contribution to the global governance”. The CPEC is the flagship project and an integral part of OBOR and it too would contribute to global economy. Disaffection with both of them seems to be an afterthought which would not serve long-term U.S. interests.

 

Pakistan and China are leveraging their economic geography to make Pakistan a part of regional logistical value chains, but India invokes the disputed nature of Gilgit-Baltistan, while itself obdurately impeding a resolution of the Kashmir dispute. Pakistan should steer clear of this provocation and indeed a trap, stay the course, and not be distracted by India’s attempts to embroil it in a conflict with the malign intent to deny Pakistan a historic opportunity to realise its full potential as an emerging economic power.

It is not appropriate for Pakistan, or for that matter Gilgit-Baltistan and Azad Kashmir, to tell major global powers what is in their best interest, but neither should Pakistan be hectored about what development projects it should implement for its people and what foreign development partners it should choose. Pakistan has not been directly criticised by any country except India for embracing CPEC. Europe, the Middle East, Africa and Far East see huge opportunity in it. India is in the habit of blowing out of proportion even the slightest critique of OBOR and CPEC.

To show the significance it attaches to the BRI, in October this year the Communist Party of China incorporated it in its constitution. This should bring some relief to the Pakistanis distressed after the U.S. statement on the CPEC.


The real value of the CPEC is that it will help usher in an era of social stability and help Pakistan put itself firmly in the league of emerging economies. Pakistan has transitioned from being a frontier market to an emerging economy, as per a determination made by the Morgan Stanley Capital International (MSCI) early this year. The CPEC provides space to Pakistan to grow to its potential. Pakistan’s private sector will gather mass and traction, which in turn would help eliminate poverty and wean elements in the youth of violence and extremism. Economic progress, coupled with enhanced good governance, will bolster Pakistan as a pillar of peace and security in the region; and Pakistan would become a connective node for adjoining neighbourhoods.


These developments should in fact create a new convergence between Pakistan, China and the U.S., as well as between South Asia and Central Asia. Pakistan is important for the U.S. as a positive force in the region and in the Muslim world, not just as a stakeholder in regard to the situation in Afghanistan.


The inflows of investment in Pakistan will benefit China and other foreign investors, including from the United States. Under existing and new bilateral agreements, the U.S. should encourage its high-end corporate sector to participate in the CPEC projects, especially those related to energy, infrastructure, industrialisation and ICT. This would help create a win-win situation. The U.S. and Pakistan should revive their macroeconomic cooperation as part of their strategic engagement, as already agreed between the two sides.


In the past, the U.S. has shown interest in helping Pakistan enhance its economic connectivity in the region through the Afghan-Pakistan Transit Trade Agreement, the Central Asia-South Asia Electricity Transmission and Trade Project (CASA) and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project, among others. The CPEC and all these projects are complementary and in fact the CPEC will not only buttress them but open new avenues for growth, investment and prosperity.
Let India remain a spoiler for the time being, until it realises that this game-changing mega-project, the CPEC, will benefit her too in the long run.


The CPEC is driven by geoeconomics, not geopolitics. Yet, some would say that this mega-project tends to obscure the distinction between the two. Pakistan and China are leveraging their economic geography to make Pakistan a part of regional logistical value chains, but India invokes the disputed nature of Gilgit-Baltistan, while itself obdurately impeding a resolution of the Kashmir dispute. Pakistan should steer clear of this provocation and indeed a trap, stay the course, and not be distracted by India’s attempts to embroil it in a conflict with the malign intent to deny Pakistan a historic opportunity to realise its full potential as an emerging economic power.


It is not appropriate for Pakistan, or for that matter Gilgit-Baltistan and Azad Kashmir, to tell major global powers what is in their best interest, but neither should Pakistan be hectored about what development projects it should implement for its people and what foreign development partners it should choose. Pakistan has not been directly criticised by any country except India for embracing CPEC. Europe, the Middle East, Africa and Far East see huge opportunity in it. India is in the habit of blowing out of proportion even the slightest critique of OBOR and CPEC. Defence Secretary Mattis’ remark got Pakistan worried only because of the United States’ growing India-centric policies which hurt Pakistan’s interests.


There is a strong feeling in Pakistan that Washington should not act as a proxy for India’s foreign policy because of its own wider security and economic interests in the region. After all, the U.S. has had a long alliance with Pakistan and, despite the cyclical pattern of this relationship, both countries have accomplished many shared goals from time to time. Now being totally partisan to Pakistan’s strategic adversary does not sound like good judgement. Some semblance of balance would be a very healthy choice.


China’s counsel in regard to the new international order is sound: major countries should cooperate rather than confront each other. Talking to digital economy entrepreneurs in September 2015, President Xi Jinping had said, “There is no such thing as the so-called Thucydides trap1 in the world. But should major countries time and again make the mistakes of strategic miscalculation, they might create such traps for themselves.” China has no appetite for building an empire; and the days of empires, even of virtual empires, are long gone.

 

Pakistan’s friendship with China will remain resilient as ever; and Pakistan is on the right track to explore more partnerships in the region and beyond, not just to safeguard CPEC, but to reach its destination of a developed economy and optimum human development.

A confrontation between the U.S. and China is by no means inevitable nor desirable. No doubt there is turbulence in the South China Sea and the Korean Peninsula. But China is cautious and the U.S. is decreasing its fixation with the pivot to Asia. A delicate nuclear balance makes an all out war unimaginable. And yet a catastrophe is looming and it can be averted not by opposing but by backing One Belt, One Road which creates jobs and businesses for the most marginalised segments of society across Asia and Africa by developing infrastructure and investing in energy, industry, agriculture and telecommunications. The project itself is a catalyst and a roadmap for transformation. It does not foist a single country monopoly or ownership. It is not exclusive; it is inclusive and it does not preclude, nor it can, construction of new transportation corridors by other countries.


To the opinion leaders and analysts in Pakistan, I would say that while remaining vigilant, they should not torture themselves by building wild and doomsday scenarios. The CPEC is there to stay and will reach fruition. Let’s also remember that, despite being a transformative project, the CPEC is a building block and a massive stimulus in Pakistan’s economy, but it is not the whole economy, which will have a much larger scale in the decades to come. Keeping this larger picture in mind, it would be judicious to have a working and workable relationship with the U.S., which Pakistan, as an emerging major economic and political power, would need to operate in the international milieu. Pakistan’s friendship with China will remain resilient as ever; and Pakistan is on the right track to explore more partnerships in the region and beyond, not just to safeguard CPEC, but to reach its destination of a developed economy and optimum human development.

 

The writer is the President of the State of Azad Jammu and Kashmir and former Permanent Representative of Pakistan to the United Nations in New York and Geneva.

E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

1 When a rising power emerges and is perceived to be threatening the interests of a rival existing power (or powers), the most likely outcome is war. “It was the rise of Athens, and the fear that this instilled in Sparta, that made war inevitable.” - Thucydides

 
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