China, OIC, allies summit at Islamabad need of hour: Time for Pakistan to step forward as gateway for regional peaceful development

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The just concluded UN General Assembly exposed global fault lines like never before, with the most glaring in our part of the world. These range from the nuclear stand-off between India and Pakistan over Kashmir, Afghan peace challenges, multiple wars in Middle East, home to USA Indo Pacific command with India in the lead in USA’s campaign against Chinese predatory economics and the energy wars.

The region also has the greatest potential as well with two of the world’s top five economies in it and full of human and mineral resources. For now, the challenges outweigh the opportunities as summarised by UN Secretary General during his address at recent General Assembly. Secretary-General Antonio Guterres warned global leaders of the looming risk of the world splitting in two, with the United States and China creating rival internets, currency, trade, financial rules and their own zero sum geopolitical and military strategies.

It’s a challenge for regional leadership to overcome these challenges. European Union is an example to emulate who gelled together despite two world wars. EU is now world’s largest trading bloc with trade volume of over USD 4 trillion and nearly 16% share in global trade. With territorial challenges, massive frictions, faltering economies, the Muslim countries in the region face the greatest challenge. In 2019 till now, India has caged 9 million Kashmiri Muslims, Israel annexed Golan Heights and has further plans. Major economies like Saudi Arabia, Pakistan and Iran are running budget deficits in excess of 5%. The simmering Saudi Arabia-Iran rivalry has exploded with Saudi Foreign Affairs Minister Dr Ibrahim bin Abdulaziz Al-Assaf in his UN General Assembly speech alleged Iran about firing 25 Cruise missiles to reduce its oil production by half and other fatalities in the last few years.

Iranian President Hassan Rouhani at UN had his own long list of grievances over the last 40 years by regional rivals and economic sabotage by USA for its positions against Israel. The Iranian president proposed that regional countries should resolve differences between themselves and made the remark “Neighbour comes first, then the house”. And that USA is not our neighbour and proposed a Coalition of Hope. Our prime minister rightly offered mediation between Iran and Saudi Arabia at UN events and expressed resolve in this regard.

It’s a very sad reality that due to wars for global and regional hegemony and Muslim frictions since 1980, over 4 million lives have been lost in Israel Lebanon Palestine wars, Iran- Iraq war, Gulf war, Soviet and USA/Allies Afghan war, Iraq war, Syria Civil War and Yemen War. The conservative estimates for economic and opportunity losses during these wars are over USD 3 trillion. With declining global demand and lower prices for energy products, the oil exporting countries in Middle East will find it extremely difficult to continue buying expensive weaponry or host USA/allied forces. Global annual demand for oil has slowed down to 1% from 3% in 2000 and Oil’s share in global energy mix will remain stagnant or drop due to massive uptake of renewable energy and expansion in natural and LNG based gas. Also, the share of electricity in final consumption moves up towards one-third, as almost half the car fleet goes electric by 2040 and electricity makes rapid inroads into the residential and industry sectors.

USA has developed energy independence and is not dependent on energy imports from Persian Gulf countries like before. USA is now world largest producer of energy products and will be a net exporter of energy products from 2020 after 70 years. USA imports nearly 40% of its energy requirements and half of that is procured from Canada, Mexico and Venezuela and less than 20% of its energy imports are from Persian Gulf countries mainly Saudi Arabia and Iraq.

Talking about the tensions in Middle East, Chinese Foreign Minister Wang Yi in his UN Speech proposed that Gulf countries should form a platform for dialogue and consultations and countries from outside should play a positive role. Mr. Yi said, China is willing to share its development model and in this global world, countries rise and fall together.

China has achieved one of greatest economic turnaround and poverty alleviation in a period of around 30 years without firing a bullet across its borders. The biggest lesson from the Chinese turnaround besides economic policies and hard work is keeping its borders secure and free of conflict. Muslim countries need to learn from Chinese development model to end internal strife to be better equipped to handle external challenges. And the challenges are only growing with unilateral annexation of Kashmir by India and Israel’s plans for greater expansion. Saudi Arabia is now China’s biggest oil supplier and China has signed over USD 300 billion energy infrastructure related projects with Iran over 25 years. Majority of Chinese oil needs are met by Persian Gulf countries and stability in Middle East is critical to meet China’s energy needs.

India may also learn from the Chinese model of peaceful development. Its dream of a USD 5 trillion economy and beyond will be easier to meet if its borders with Pakistan and China are calm, trade flourishes and investments pour in. Ever since its jingoistic position since Balakot attack, Pakistan response and now Aug 5, investors are quitting. As per a Bloomberg report this month, after pouring $45 billion into India’s stock market over the past six years, investors have sold $4.5 billion of Indian shares since June 2019, on course for the biggest quarterly exodus since 1999. If tensions persist and increase between India and Pakistan, many potential investors will walk away and India’s latest quarterly growth is now lowest in 5 years. India has done well economically in last few years but has still not reached a stage where it can sustain an ultra-aggressive security agenda with economic expansion. Pakistan may have internal political and economic problems but its defence capabilities are strong enough to ward off any Indian aggression. Pakistan and India rank 130 and 116 in 2019 ranking of UN Sustainable Development Goals and a sizeable number of their population still live in extreme poverty. Sooner or later regional and global stakeholders, Corporate India and political rivals will make Mr. Modi rethink his positions on Kashmir and Pakistan.

It’s good that the Chinese President Xi Jinping is likely to visit India for 2nd informal summit with Prime Minister Modi in middle of October. The perils of Kashmir impasse and regional potential will definitely come up for discussion. Chinese foreign minister expressed intent to play a role in a global order based on peaceful development and the opportunity and need is right next door. With deteriorating situation around its border with India and Pakistan, the tensions in the larger Middle East and South Asian corridor is likely to impact China’s growth as well. China’s rivals have worked for decades to contain its influence. For lowering the tensions in Middle East and South Asia, Pakistan may well step forward as a gateway for peaceful development and host a Regional Summit in Islamabad including OIC members and China. Countries with direct stakes in the region may also be invited to the summit as well. Pakistan prime minister has been against wars in the region and as a pacifist and pro-development, will be a good host.