Money Matters

Connectivity for collective growth

Money Matters
By Shahzada Irfan Ahmed
Mon, 03, 21

Q. What exactly is CAREC programme and what are the goals it aims at? What function does CAREC Institute perform?

Q. What exactly is CAREC programme and what are the goals it aims at? What function does CAREC Institute perform?

A. The Central Asia Regional Economic Cooperation (CAREC) Programme is a partnership of 11 countries - Afghanistan, Azerbaijan, the People’s Republic of China, Georgia, Kazakhstan, the Kyrgyzstan Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan and development partners working together to promote development through cooperation, leading to accelerated economic growth and poverty reduction.

Since its inception in 2001 and as of September 2020, CAREC has mobilised $39.2 billion in investments that have helped establish multimodal transportation networks, increased energy trade and security, facilitated free movement of people and freight, and laid the groundwork for economic corridor development.

The CAREC Institute is an intergovernmental organisation contributing to the CAREC programme through knowledge generation and capacity building. Its mission is to enhance the quality and effectiveness of the CAREC programme by providing evidence-based research, capacity building services and networking with research institutions.

Q. How do you think CAREC cooperation framework is different from other economic cooperation frameworks where Pakistan participates?

A. I think CAREC is different as it focuses on our region and Central Asia and there is no regional arrangement in which Pakistan is a member which exclusively deals with this region. There is ECO, SCA etc but these are driven by multiple work agendas whereas this programme is focused on regional integration, connectivity and collective economic growth. The best part is that this programme has a very strong partner in the form of ADB which can fund different projects proposed under it. While SAARC and SAFTA faced challenges affecting their progress at desired pace, this programme has the nod and support of all the partners. Besides, its focus is not only on this region; it connects Europe and other regions as well.

Q. What is Pakistan’s cooperation potential with the rest of CAREC (other than China and CPEC)? Do you see potential for agriculture, footwear and apparel, and energy trade?

A. There is potential in two areas, transit and trade of goods and services. Most of these countries are landlocked and shortest route to them is available through Pakistan. Afghanistan is already using this facility and Uzbekistan has requested to Pakistan for a similar facility. The potential for export exists in different sectors such as sugar, rice, ethanol and other products. I would like to share that there is Central Asia South Asia (CASA) 1,000MW project benefitting Pakistan, Afghanistan, Tajikistan and Kyrgyzstan and the Tajikistan Afghanistan Pakistan India (TAPI) gas pipeline that show the potential of joint energy projects in the region. No doubt energy is a major area of cooperation and hence a priority thematic area of CAREC programme.

Q. Which Pakistani goods or services could prove competitive in the CAREC region? And why do you think Pakistan shall target CAREC markets?

A. You know the modern working of trade is through value chains and no country produces all the goods and the components are sourced. Besides, intermediary goods are produced and all these are used to make the final product. Pakistan has several comparative advantages it can capitalise on. Pakistani food products, sports goods, textiles, textile made-ups etc have a ready market in the region. Even, I would say that in light engineering products Pakistan has an edge.

Similarly, Pakistan can import goods, which it is buying from other countries, from CAREC region at a better price. If this region develops on the pattern of ASEAN and EU, I am sure heavy investments from other regions would also flow here.

Q. What is your take on the rail connectivity project conceived by the government of Pakistan to link Pakistan, Afghanistan, and Uzbekistan?

A. I think it an excellent initiative and in some ways I would say it shows the greater understanding and realisation of CAREC region’s potential at the highest level of governments. The region’s countries have signed a framework agreement for this 573 kilometres long rail network that links Tashkent with Kabul and from there with Peshawar and onwards the rail networks and ports that exist in Pakistan. The financing required for the execution of this project is $4.8 billion.

As I said earlier, CAREC programme has sectoral strategies in different sectors like trade, energy, tourism, etc. Railways is also a priority area here. I would say the initiative fits well into the CAREC strategy on railways. It is worth appreciation that these countries have taken this initiative and shown intent to materialise it.

Q. The CAREC Tourism Strategy has identified recently seven priority regional tourism clusters, which includes Karakorum–Wakhan cluster with participation of Afghanistan, Pakistan, China, and Tajikistan. How do you see these tourism clusters operational in terms of security, visa, facilities, and other issues influencing tourism development?

A. Tourism strategy is the latest framework developed under the CAREC programme and approved by member countries. It brings dividends to the people of areas and communities that are otherwise far away from major activities of economic importance.

Here I would talk about the cluster comprising Pakistan, China, Afghanistan and Tajikistan which is an interesting area with a rich cultural and traditional shared past. No doubt challenges are there, but over the years things have changed and security situation in Pakistan has remarkably improved. Then Pakistan has introduced visa on arrival policy and suggested introduction of a CAREC visa valid for all the regional countries. This is a very enterprising proposal as foreigners who come here for tourism want to visit different neighbouring countries and not only one.

It was quite encouraging that tourism had picked up pace in Pakistan but things got bad due to Covid-19. It is hoped that it will rebound once the pandemic is over. I would suggest that Pakistan must take this time to prepare itself to improve tourism facilities, marketing the touristic spots to the world etc.

Q. Finally, how do you think CAREC countries can overcome language barriers, cultural differences, certain historical disconnectedness, lack of familiarity, and other similar issues which impede cooperation? What do you think shall be the CAREC identity?

A. This is an important question in terms of regional identity. Whichever region you look at they carry a type of historical baggage. There are cultural and political differences but it is time to look for a shared common future. At times, countries realise they have had feuds among them and there should be a new beginning.

For example, Europe has fought world wars but ultimately it settled for peace and regional cooperation. In CAREC region we have many things in common and we are a continent. We can promote movement of people and capital within the region. Fortunately, here we do not have a bitter past or any major political conflict. There may be issues like water and that is why it is also a thematic area under the CAREC programme. This region was part of the silk route road and places like Samarqand and Bukhara are well known to all of us.

Lastly, you asked about CAREC identity. The CAREC identity is basically an initiative for development through better connectivity. Good neighbours, good development and good prospects are what it envisages.

The writer is a staff member