Tuesday September 28, 2021

CPEC Phase II

Three things about the Pak-China relationship: China has a ‘strategic partnership’ with Pakistan. The China-Pakistan Economic Corridor (CPEC), a $62 billion agglomeration of energy and infrastructure projects, has become a dependable economic lifeline for Pakistan. And, China has also become the ‘lender-of-last-resort’ to Pakistan.

By the end of 2018, Pakistan’s domestic politics and economics had visibly slowed down the progress of CPEC projects. Yes, there was a shortage of support funds from the Pakistani side. Yes, the IMF – and its powerful backers – were creating hurdles. And,Pakistan’s bureaucracy had woven its own webs of lethargy and incompetence. Yes, China has been overzealous about CPEC all along.

On the 5th of October 2019, the China Pakistan Economic Corridor Authority (CPECA) Ordinance was promulgated. On November 26, the government appointed retired Lieutenant-General Asim Saleem Bajwa as chairman of CPECA. Lt-Gen (r) Asim Bajwa has imbued CPEC with new life and vitality. CPEC Phase II, according to Gen Asim Bajwa, is about three things: dividends to masses; connectivity and spreading prosperity to remote areas.

The long-delayed ‘Rehabilitation & Up-gradation of Karachi-Lahore Peshawar (ML-1) Railway Track’ is now back on track (imagine, the Framework Agreement was signed more than three years ago in May 2017). ECNEC finally approved it on 5 August 2020. This entails the doubling of the entire track from Karachi to Peshawar; speed of passenger trains from 65km/h to 160km/h and a computer based signaling and control system. Cost: $6.8 billion. Source: Chinese Government Concessional Loan.

The Technical Support Agreement (TSA) for the 878km Matiari-Lahore transmission line was signed in 2016. On 8 August 2020, Gen Asim Bajwa told the press that 85 percent of the work has now been completed. Cost: $1.6 billion. Executing company: China Electric Power Equipment and State Grid Corporation of China.

CPEC is the crown jewel of the Belt and Road Initiative (BRI) – and Gwadar is the jewel in the crown of CPEC. Under CPEC, Gwadar has at least half a dozen individual projects including Gwadar East-Bay Expressway, New Gwadar International Airport and $100 million Pak-China Friendship Hospital. On July 31, Gen Asim Bajwa told us that a ship carrying 17,000 tons of DAP arrived and that for the first time bagging of bulk cargo took place (DAP is destined for Afghanistan).

CPEC has a total of nine Economic Zones but nothing much has moved on the ground. The latest update is that “all formalities for the operationalization of Rashakai SEZ, the 1st CPEC SEZ, have been completed” and that the groundbreaking is planned during the visit of President Xi Jinping this year.

In December 2017, the National Security Strategy of the United States of America declared ‘China’s trade and economic policies’ as the major threat to the US. In March 2018, the US Trade Representative declared that China’s industrial and technology policies are “unfair and inequitable”. In August 2019, the US Treasury Department accused China of “currency manipulation”. China has become ever more assertive in the South China Sea, Hong Kong, Taiwan, the Himalayas, the Middle East and cyberspace. Cold War II has taken roots.

Major realignments are taking place in our region. Chinese influence in our region – and the Middle East – is on the rise and China is creating new spheres of influence. Our relationship with the US is no longer strategic in nature – it is purely transactional. In this era of major realignments, Pakistan must safeguard its security interests and protect her economic interests-both at the same time.

The writer is a columnist based in Islamabad.

Email: [email protected] Twitter: @saleemfarrukh