1

Introduction
China-Pakistan Economic Corridor is a collaborative project created to set a collection
of infrastructure developments throughout Pakistan. CPEC is intended to rapidly
modernize Pakistani infrastructure and strengthen its economy by the construction of
modern transportation networks, numerous energy projects and special economic
zones. Originally valued at $46 billion, the value of CPEC projects is now worth $62
billion. The official website for China-Pakistan Economic corridor claims, “CPEC will not
only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India,
Central Asian Republic, and the region.” Deemed as a ‘game changer’ it is claimed that
this treaty has a potential to change entire outlook of Pakistan’s economy as we know it.
This guide will help delegates explore if there is any weightage to such claims. This
guide takes a holistic approach to help delegates understand the outcomes of such a
treaty by looking into previous Pak-China diplomatic relations, internal sociopolitical
issues in Pakistan – the host country and its relevance to international forum as UN.
What is expected from CPEC at HUMUN 2017?
HUMUN 2017 hence sets a committee that will assign all the delegates with stakeholder
personalities so that they can partake in the discussion. As representatives either of a
country’s government, an international organization, a private corporation or any
banned non-state outfit like an Islamic organization or a Baloch separatist union, the
delegates are expected to do a cost-benefit analysis for taking any stance on the
developments.

The topic for this committee is “Future Road Map to maintain Pakistan’s Strategic
Position for partaking CPEC.” Here both the Public and Private sector will come
together to:

1. To conduct a holistic Cost Benefit Analysis (CBA) in regards to the current

events of the country and changes in CPEC. The holistic analysis is to take into
consideration both the reservations of different factions of the public and different
industries in the Local Private Sector.
2. How to ensure mutual future value for the country in the short and long term
with special focus on Gwadar
3. To evaluate current and future security concerns in regards to CPEC (both
Baluchistan and Jammu Kashmir)
4. Provide recommendations for the Pakistani International relations policy for
both China and other countries in regards to CPEC

Therefore, you are expected to formulate rules and procedures like trade tariffs (if any),
how to divide geopolitical areas in zones, what sort of cooperation countries,
corporates, other unions or a nexus of such bodies reach on any agreement, the scale
and scope of the plan and how it benefits their cause in any possible way. The
committee aims to supervise the talks to draft out a resolution based on mutual consent
and compromises of involved parties.
Nature of the Committee
The committee in question would be run as a semi-crisis committee. Where it is
required to pass a resolution on one topic but the committee will still be getting updates
by parties not in the committee but still shaping its eventual outcome. There would be a
time freeze once the Study Guide is uploaded till the end of the committee. It is
important to remember that this is a resolution based committee and without a
resolution getting passed this committee will fail. It is also important to remember that
for a resolution to pass in this committee more than a 75% majority of the committee will
have to agree with it.

Future Road Map to maintain Pakistan’s Strategic

Position for partaking CPEC
Starting of a New Relation
The relationship of Pakistan and China can be noted 1963 onwards from two policy
documents. One of the early notes initiated for a new policy direction of seeking close
expanded relations with China was moved in mid-1963 by Agha Shahi, then additional
secretary in the Pakistan Foreign Office, on which, before its submission to the
president, the then foreign minister, Zulfikar Ali Bhutto added a prescient comment that
'in the vastness of Asia, buffeted by currents of history', Pakistan and China appeared to
be poised to forge a bond like that between India and the Soviet Union. The other is the
exchange of notes in early 1962 when Pakistan formally proposed to China negotiations
for a boundary agreement. After several days, the Chinese responded asking the
parameters of such a negotiation. The Pakistani response that drew a prompt
affirmative Chinese reply identified three elements: the ground situation, customary law
and practices, and mutual accommodation.
Negotiations for a provisional boundary agreement began in October and the
agreement ended up getting signed within six months in March 1963 which signified
close, friendly bilateral relations between the two. Despite the political situation around
that time, reports mention, “But 'friendship with China' roots in the popular ethos in
Pakistan when China stood unambiguously by Pakistan during and after the 1965 Indo-
Pakistan conflict… The events of 1971 were a test for Chinese diplomacy and its
relations with what was left of Pakistan. From a longer term perspective, it clarified and
set the political parameters of the relationship and, at the same time, underscored
realism rather than emotionalism in China's approach to its foreign relations under
Premier Zhou Enlai that continues to prevail in post-Mao Zedong China.”

The Gwadar Question

On 3rd May 2004, three Chinese engineers were killed and nine Chinese were injured
when a remote-controlled car bomb hit their van. The engineers had been traveling to
the Gwadar port in the South-West Pakistani province of Baluchistan. In response,
President Pervez Musharraf and then Prime Minister Zafarallah Jamali immediately sent
messages of condolences to their Chinese counterparts, giving assurance that they
would handle the case immediately and with serious concentration. Within a week,
armed escorts were assigned to the Chinese workers. Following the detention of
eighteen people, Pakistani officials declared that they had arrested the "key suspect"
behind the attack just a week later.
The incident mentioned above shows us a rather ‘strange’ response of the Pakistani
government with the Chinese. This strange response is instilled as a citizen who has
seen no such promptness by the
federal or local government in solving
national issues. The response shows a
two-way interest, not only from China’s
side but also from Pakistan’s side. Such
a relationship can be referred to as a
Symbiotic relationship. This is
described as a sort of relationship with
mutual benefit of both parties.
Symbiotic relationships are a special type of interaction between species. Sometimes
beneficial, sometimes harmful, these relationships are essential to many organisms and
ecosystems, and they provide a balance that can only be achieved by working together.
This idea of helping someone to get some help in return is the essence of a symbiotic
relationship.
Despite describing what sort of relationship is being established between the two
parties, we are still unaware of how each party was benefiting and what role Gwadar
specifically played to attract those benefits. For international countries, the location of
Gwadar is an open sea location, away from the disturbed area of Iraq and other Gulf
States for any sort of political hindrances during trade. Secondly, Gwadar acts as the
shortest possible route connecting South-West Asia to Central Asia to transfer energy
and other sorts of resources. According to Haider, “First, in light of the chronic instability
in the Gulf region, the Gwadar port will provide a stable and proximate point of access
to the Gulf ports. Just 25° miles from the Straits of Hormuz, through which nearly 40
percent of the world's oil supplies flow, the port is strategically located to serve as a key
shipping point in the region. Second, the port will provide the landlocked Central Asian
republics, Afghanistan, and the Chinese Xinjiang region with access to the Arabian
Sea's warm waters. The port will also enable the transfer of Central Asia's vast energy
resources to world markets, earning Pakistan significant profits in transit fees.
For Pakistan, the prominence of Gwadar leads to the development of Balochistan and a
way of funding the province with infrastructure and extracting many of the natural
resources present in the region. Alongside that, the Gwadar port has been highlighted
as Pakistan’s third naval base after Karachi and Ormara to act as deep sea water
defense for the country.
CPEC in detail
The construction of Gwadar port can be divided in two phases from 2003 onwards.
Phase I involves the construction of three multipurpose ship berths after providing $198
million out of $248 million. Phase II, estimated at $6oo million, will include the building of
nine additional berths, one bulk cargo terminal, one grain terminal, and two oil terminals.
According to a recent report that came out regarding CPEC has given us a detailed
insight of the whole project. The plan is limited not only to Gwadar but also to the whole
of Pakistan, dividing each area according to region. In terms of agriculture the report
suggests, “The plan outlines an engagement that runs from one end of the supply chain
all the way to the other. From provision of seeds and other inputs, like fertilizer, credit
and pesticides, Chinese enterprises will also operate their own farms, processing
facilities for fruits and vegetables and grain. Logistics companies will operate a large
storage and transportation system for agrarian produce” (Hussain, 2017). Industry is
divided into different zones for specific types of production. The West and Northwest
area of Punjab comprising mainly of Balochistan and Khyber Pakhtunkhua will be
used for mineral extraction while Central Pakistan and the area of Punjab will be used
for the extraction and production of cement, household appliances and textile. Lastly,
the Southern region of Sindh will be used for petrochemicals, iron and steel,
engineering machinery and for autoparts industries.

The map below identifies the sort of area distinction made by the Chinese to gain the
best out of the projects:
Agriculture
For agriculture, the plan outlines an engagement that runs from one end of the supply
chain all the way to the other. From provision of seeds and other inputs, like fertiliser,
credit and pesticides, Chinese enterprises will also operate their own farms, processing
facilities for fruits and vegetables and grain. Logistics companies will operate a large
storage and transportation system for agrarian produce.
Enterprises entering agriculture will be offered extraordinary levels of assistance from
the Chinese government. With the aid of free capital and loans from various Chinese
ministries and the China Development Bank, the agricultural plan is concentrated
towards the opportunities for the Kashgar Prefecture and Xinjiang Production Corps,
coupled with the opportunities for profitable engagement in the domestic market.
The plan proposes to harness the work of the Xinjiang Production and Construction
Corps to bring mechanization as well as scientific technique in livestock breeding,
development of hybrid varieties and precision irrigation to Pakistan. It sees its main
opportunity as helping the Kashgar Prefecture, a territory within the larger Xinjiang
Autonomous Zone, which suffers from a poverty incidence of 50 per cent, and large
distances that make it difficult to connect to larger markets in order to promote
development. The prefecture’s total output in agriculture, forestry, animal husbandry
and fishery amounted to just over $5 billion in 2012, and its population was less than 4
million in 2010, hardly a market with windfall gains for Pakistan.
Ten key areas for engagement are identified along with seventeen specific projects.
They include the construction of one NPK fertilizer plant as a starting point “with an
annual output of 800,000 tons”. Enterprises will be inducted to lease farm implements,
like tractors, “efficient plant protection machinery, efficient energy saving pump
equipment, precision fertilization drip irrigation equipment” and planting and harvesting
machinery.
 Location Project Aim
Asadabad, vegetable processing plant, with annual output of 20,000 tons, fruit
Islamabad, juice and jam plant of 10,000 tons and grain processing of 1 million
Lahore and tons. A cotton processing plant is also planned initially, with output
Gwadar of 100,000 tons per year.
Meat processing plants are planned with annual output of 200,000
Sukkur tons per year, and two demonstration plants processing 200,000
tons of milk per year.
Karachi,
Lahore, Storage bases built over two phases for grains, vegetables and
Islamabad, fruits.
Gwadar and
Peshawar

Industry
For industry, the plan trifurcates the country into three zones: western and
northwestern, central and southern. The western and northwestern zone, covering most
of Balochistan and KP province, is marked for mineral extraction, with potential in
chrome ore and diamonds. One big mineral product that the plan discusses is marble.
The central zone is marked for textiles, household appliances and cement. Four
separate locations are pointed out for future cement clusters: Daudkhel, Khushab,
Esakhel and Mianwali.
In the southern zone, the plan highlights Pakistan’s development in petrochemicals, iron
and steel, harbor industry, engineering machinery and auto parts assembly. As Gwadar
is also a part of the southern zone, it is imminent to act as a base of heavy chemical
industries. Evidently, some Chinese investors have already started investing in the
development of Gwadar due to the cheap shipping costs to import crude oil from the
Middle East and iron ore and coking coal resources from South Africa and New Zealand
Tourism
To promote Tourism under the CPEC project, the plan speaks of a long belt of coastal
enjoyment industry that includes yacht wharfs, cruise homeports, nightlife, city parks,
public squares, theaters, golf courses and spas, hot spring hotels and water sports. The
belt will run from Keti Bunder to Jiwani, the last habitation before the Iranian border.
For Gwadar, international cruise clubs are highlighted to develop coastal vacationing
and to develop various cultures in the region. Recreational activities are also planned to
be developed in Ormara while Keti Bunder concentrates on botanical gardens, wildlife
exposure and aquariums.
Alternatives to CPEC
Granted that Pakistan can benefit from a trade deal such as CPEC, it is also important
to look at the alternatives Pakistan has at hand.
Firstly, it is important to question that why should Pakistan not choose to collaborate
with China? The answer lies in the power dynamics shared between the two countries.
Pakistan could open itself up to a range of possible consequences such as a cultural
and/or entrepreneurial takeover and loss of agricultural land just to name a few. Let us
not forget, a possible threat of a much larger takeover, that of a nation, can possibly
take place reflecting back at how the East India Company also came to India as a mere
trading company but later took over.

Secondly, it can be argued that to operate in the global society a country must form
relations with other countries in order to be competitive as well as progressive. Below
are a few alternatives that Pakistan could opt for, other than CPEC:

 Tajikistan is “137th largest economy” and is known for its trade in energy
resources. Pakistan has had its fair share of problems with shortfalls of energy
supply; therefore, a trade deal with Tajikistan would be a great opportunity. In
recent years there has been talk of trade between the two countries as well as by
forming road links. This would also allow Pakistan to possibly partake in the
disaster prevention projects being looked into in Tajikistan.

 Mauritius and Pakistan would also be able to benefit from a potential trade deal
which would in turn boost both of the country’s economies. This can be done by
the two trading in mostly primary goods such as agricultural based products,
meat, fish, textiles and rubber. This would aid Pakistan gain an international
competitive advantage as well as another trade deal outside of South Asia.
  Kyrgyzstan is another alternative for Pakistan. Pakistan and Kyrgyzstan have
had previous deals made to promote communication as well as disaster relief
aid. A trade deal with Kyrgyzstan would work in Pakistan’s favor due to
Kyrgyztan’s booming economy. It has gold mines, energy resources as well as a
good service sector, which could help boost Pakistan’s economy, to develop into
a much more refined version of itself.

CPEC seems to be a great deal for Pakistan as its developmental projects would boost
both economies. There are other alternatives which Pakistan can opt for, weighing the
costs and benefits. It depends from country to country weather they would be willing to
collaborate with Pakistan for a trade partnership as well as developmental projects.

Stakeholders other than the Government

Balochi Tribe Leaders
The Gwadar Port project may not be as smooth as told by the media. From local
hindrances, the Balochis play a major role. Acting as a breach of their national security,
Balochi’s have struggled with the federal government in many instances where they
have stopped ongoing or future projects. By not involving local participation, residents
have viewed projects as a way to colonize them. According to Riaz Muhammad Khan,
“Some observers share the view that the Gwadar project is one of the biggest land
boondoggles in Pakistan’s history… [T]he local people owned the land through
generations but lacked documents of ownership. The elite have bribed revenue clerks to
register Gwadar land in their names; the land was then resold at rockbottom prices to
developers from Karachi, Lahore, and other major cities… illegally allotted to civilian
and military bureaucrats living elsewhere… [T]he poor and uneducated Baluch [i.e.,
Baloch] population had been shut out… Gwadar became a lightning rod for Baluch
hatred of Punjabi-ruled Pakistan.”
Afghanistan
Afghanistan strongly supports the corridor and expresses desire to enter a trilateral
cooperation with Pakistan and China over the scheme. Afghanistan’s ambassador to
Pakistan, Dr. omar Zakhilwal stated that a cooperation would also benefit the entire
region. Talking to Pakistani media agencies, he deemed the scheme ‘equally relevant to
Afghanistan’ maintaining that anything that benefits Pakistan, benefits the entire region.
China has already shown interest in tapping vast mineral resources in Afghanistan but
regional security of the country has prevented any agreement that the two countries
could make. Afghanistan looks to diversify its export of products to include minerals like
copper and iron and to unlock trading routes to Europe. Improved roads and
communication can help achieve the desired aim. China can also utilise Afghanistan’s
geopolitical location at crossroads of South and Central Asia and since 2014, with
increased counter-terrorism military cooperation with Afghanistan, China can set
precedent for economic investments in the region with improved security conditions.

Saudi Arabia
Saudi Arabia has shown interests in investing in projects relevant to the Gwadar Port.
According to the Saudi ambassador to Pakistan, Nawaf Saeed Ahmed Al-Malkiy,
Pakistanis have played a crucial role since the past few years in the progress and
prosperity of Saudi Arabia. The country would like to give back to Pakistan and CPEC
opportunities play an evident role in forming similar acts, only with roles reversed.

With means of military kinship, the Islamic Coalition force led by General Raheel Sharif
has also been highly regarded by Saudi officials due to the similarity in opinions. These
Saudi officials regard the act and step because of the need to eradicate forces acting
towards terrorism. Similarity in opinion lies in the fact that Islam is believed to be a
religion of peace which has been misunderstood by many European millennials and the
aim of the force is not only to eradicate the threatening factors but also so maintain the
original notion of Islam.

Iran
The Islamic republic of Iran has expressed a keen intererst in joining the mega project.
Iranian president, Hasan Rouhani first expressed the desire in a meeting with Pakistani
ex-prime minister, Muhammad Nawaz Sharif on a UN assembly session in 2016.
However it is interesting to note that policy analysts fear that on account of Iran-India
ties and Saudi Arabia’s objections on Iran joining the plan will make things difficult for
the country in entering the trilateral agreement for the project. Particularly an envoy to
Islamabad pointed that given the structure of diplomatic ties where India is believed to
be actively opposing the deal, it would be very difficult to get Tehran on board.

An agreement with Iran is believed to benefit all three major stakeholders: Pakistan,
China and Iran and even the Persian region as a whole. Iran, although the reservoir for
world’s 10% of the oil had been seeing its development heavily tampered by sanctions
in world market due to its advancement in Nuclear projects. Although the new deal with
p5+1 is expected to repeal sanctions which in turn will give Iran an opportunity to further
its business interests in the world market. Many nations are eyeing for a financial deal
with Iran which economic experts says has the ability to alter the oil economy once it
enters the global market. Since China is already looking for alternative routes for oil
import, this will not only help China and Iran strike a deal, but the long standing plan of
Iran-Pakistan pipeline project can be recognized.
India
The CPEC project has raised apprehensions in India. The main concern Indians
withhold is the fact that the corridor passes through Pakistan-occupied Kashmir. Earlier
this year, Prime Minister Narendra Modi criticised the belt-road initiative, saying
connectivity could not be allowed to undermine the country’s sovereignty. The finance
minister Arun Jaitley reiterated the same concerns. The Chinese envoy argued that the
country had no intention to get involved in the sovereignty and territorial disputes
between India and Pakistan. He confirmed and emphasized on how CPEC is for
promoting economic cooperation on the connectivity between China and Pakistan. To
mitigate the Indian concerns, a new offer was proposed to change the name of CPEC.
However, no serious measures were taken on this matter.

Washington Consensus vs Beijing Consensus

Pakistan is in a bilateral relationship with US since October 1947 and this relation was
strengthened when Pakistan formed allegiance with United States of America during
Cold war era. Pak-US relationship has been through ups and downs in past but today
US is a major stake holder in Pakistan’s affairs and this makes CPEC, a point of world’s
interest. Obama’s administration attempted to obstruct Chinese’s political and economic
growth and formulated “pivot to Asia”. Consequently, China looked for many other
opportunities to invest and trade across the continent and CPEC became one of the
major projects in Xi Jinping’s One Belt-One Road (OBOR) initiative. There may be an
unrest in Washington as Pakistan grows closer to China and this raises China as strong
contender to establish its influence in Islamabad. Pakistan needs to find best ways to
encounter this competition because it harms the interests of each involved party and US
should also seize this opportunity to gain its lost domination in the continent.
The transition of Pakistan’s foreign policy from geo-politics to geo-economics seems
though still incomprehensible to the newly elected president of United States Donald
Trump. With the advent of CPEC and the Beijing Consensus the United States may
already seemed threatened and would begin to bolster its on strategic position in the
region.
The last few months saw a flurry of engagements between Pakistan and the United
States. First Prime Minister
Shahid Khaqan Abbasi met
US Vice President Mike
Pence in New York. Then
last week, Foreign Minister
Khawaja Asif had detailed
discussions with Secretary
of State Rex Tillerson in
Washington.

Testifying before the Senate

Arms Services Committee,
Defense Secretary Mattis said the Trump administration opposed the OBOR policy in
principle because, in a globalized world, there were many belts and many roads, and no
one nation should put itself into a position of dictating OBOR. Another reason for the
opposition was that it passed through the disputed territory of Kashmir. The Secretary
apparently tried to appease India, which has long claimed that Gilgit-Baltistan region of
Pakistan is part of the disputed Jammu and Kashmir state.
In his policy speech on August 21, Trump singled out Pakistan as a country which was
supporting the “agents of chaos”. He then threatened Pakistan to change that approach
immediately.
The Security Question
Security matters endure a significant challenge to the CPEC as a whole. The security of
the corridor is critically important for both Pakistan and China in order to further support
trade and development related ties. It is also a challenge for both countries to develop
the CPEC in the specified time frame [5]. As a security point of view, Gwadar and
Kashgar are two central points, which are going to be linked through the CPEC, but
there are further several security challenges. It is anticipated that reducing the risks of
nationalist and militant movements of the Uighurs, China is making five economic zones
in Kashgar which can transform the region into an economic hub, a similar view is
articulated about the nationalist movements in Balochistan. In fact, their aim is to defend
security related matters of CPEC such as routes and workforce on short and medium-
term bases. Certainly, the terrorists ‘activities are being condensed by the military action
and there are decreasing tendency in terrorist activities in Pakistan, but there is still the
possibility of threats. Gawadar seaport is located in Balochistan, which faced instability
and terrors which is being publicized after starting the work on CPEC. The protection of
the Chinese labor force is likewise a matter of concern for Pakistan. The Pakistan
military has created a force of 10,000 to protecting the Chinese workforce who work
under CPEC, this force is known as Special Security Division (SSD), they have six
wings of paramilitary forces and nine army battalions, the Frontier Corps and the
Rangers. So far most prevailing threats experience by the CPEC from militant’s groups
such as Nuristan and Kunar provinces of Afghanistan along with Al Qaeda and
Tehreek-i-Taliban Pakistan, the Turkestan Islamic Party and the Movement of Islamic
Uzbekistan etc. There are a number of internal and external factors posing threats to
CPEC.
Internal Challenges
There are certain internal challenges which should be faced by Pakistan regarding
internal security point of view.

The first challenge is the most progressive Talibanisation of Pakistan, especially in the
FATA and western parts of the country. Pakistan confronts prospective security threats
from Tehreek-e-Taliban Pakistan (TTP) and different other militant groups in the tribal
areas and Khyber Pakhtunkhwa, although separatist insurgency in Baluchistan,
religious and ethnic violence in Punjab and Karachi (Sindh). The militancy groups and
insecurity will become serious threats for the construction of China-Pakistan Economic
Corridor (CPEC).

The second challenge is the religious extremism and terrorism that also become serious
threat China-Pakistan Economic Corridor (CPEC) as a society and the country as a
whole. Meanwhile, 9/11 incident more than 30,000 citizen and also different security
workers have lost their lives in terror attacks. Likewise, Pakistan has been taking a
serious stance to control the threat of terrorism and its main uproot causes, i.e.,
religious radicalism.
The third one challenge is faced by Pakistan like Indian involvement. Several countries
cogitate that CPEC has a strategic threat to their military and economic interests and
penetrating effect on the state. India violently substances to CPEC, specified the
atmosphere of a forceful geostrategic struggle it put into the hands of Pakistan an
advantageously favorable position along the Arabian Sea. Furthermore, reliable
evidence exists that divulge RAW run a special cell set up to sabotage CPEC in
Pakistan.

On another level, for the UAE; in the meanwhile, Gwadar is also another perceived
challenge to its virtual monopoly over trade in the gulf countries. On the other hand,
India is also diligently promoting their own port with the name of "Chabahar Port"
initiative as an alternatively to connect Central Asia and Europe, having more of an
upshot on the UAE than Gwadar.

The fifth one is that the Pashtun tribes of Afghanistan has provided nonstop support to
the insurgents and has backed the insurgency, It has a close connection with the
Norzais, Ghilzai Alekozai, Durrani and Eshaqzais tribes. Moreover, Wazirs, Ahmadzai,
and Mahsuds in North and South Waziristan have also backed the insurgent cohort by
organizing their variant happenings in Afghanistan that can also upshoot on CPEC.

External challenges
Since its genesis, Pakistan has encountered extreme threats on its integrity and security
from its west borders align to Afghanistan. Along with NATO invasion of Afghanistan,
India, Russia and Iran has been trying utter best to destabilize Pakistan. The rise of
greater interest of India in Afghanistan compelled to establish an AF-PAK alliance to
hinder the challenges. Moreover, the Chinese investment and curved eye of Iranian and
Russian has further brought security implication.

In addition, to list the internal set of confrontations, strong external oppresses on CPEC
is obvious. Since after 9/11, cooperation level between Pak-Iran has attained its height
in naval cooperation in the Indian Ocean. There existed the tight level of strategic and
economic competition level with India and Iran because of amendment of China-
Pakistan economic corridor. Instability in politics and disturbed security state of Pakistan
may carry backlashes in the advancement of CPEC infrastructure near the Afghan
border. The biggest challenge is existing proxy war with neighbor India and its strong
influence in Afghanistan at the same time recently bettering hostile relations with its
west.So far Caspian region Russian monopoly status quo standby decision on oil
pipeline is concerned which extending to Europe and beyond has a threat from the
construction of new pipe line as per CPEC. Chinese design in the Indian Ocean is yet
another complication in India-China geo-politics. Not only this to counter the corridor,
‘Chahbhar Port’ is another grand design of India with Iran and Afghanistan strategically.
Advantageous geographical and socio-cultural strategic location of Iran has created a
shortest link between Central Asia and the Indian Ocean at the same time Iran has
several projects with central Asian counterparties like Anzob Tunnel with Tajikistan and
Amu Darya Bridge. Heavily dependent on central Asian nations on Russian
communication networking infrastructure and Russian energy resources’ linkages with
Kazakhstan has entangled Pakistan corridor dream. However, Common wealth
independent states (CIS) like Azerbaijan plays a supportive role so far corridor success
is concerned. The struggle for power influence in Afghanistan by different regional
actors in the wake of US withdrawal has a grace threat on the sustainability of proposed
CPEC. Most ignored factor is the cost of production. Heavy demand from industrial
clusters for raw materials brings price hike and hurts the major motive of CPEC
economic prosperity. At the same time result in resource depletion, environmental
pollution and changing climatic patterns.
Long-term political stability in Pakistan is vital to smoothly implement the projects like
the China-Pakistan Economic Corridor. In the past, Pakistan has gone through phases
of political instability and turmoil that weakened the country’s development roadmap and
also affected policy consistency. Similarly, if now or later, some prolonged political crisis
and economic meltdown grip the country, the yearly and periodic budget allocations for
the CPEC project could be disturbed causing delays to the project outcome beyond set
targets.
Although the prevailing environment of insecurity, militancy and violence in Pakistan can
pose serious threats to the construction of the China-Pakistan Economic Corridor, the
level and nature of this threat is not uniform across Pakistan. It is encouraging that the
areas through which the finalized eastern alignment of the corridor will run are relatively
more secure than those of the earlier planned western alignment, though with few
exceptions. The level of threat to the security of the CPEC project, including sites and
personnel, is low along most areas of eastern alignment with the exceptions of Gwadar,
the Makran Coastal Belt and Karachi, where threat level is assessed to be medium. At
the same time, it is imperative to ensure stringent security measures along the entire
CPEC alignment.

Pakistani Business Community

So far 59 projects have been identified (17 in energy, 11 Gwadar, eight infrastructures,
two digital, four rail-based transit, six provincial road, port, water, mining, nine special
economic zones, and two related to social development).

Of all, four projects in the energy sector are operational, with Sahiwal coal-fired power
plant contributing 1,000 megawatts, Sachal wind farm in Jhimpir 50MW, UEP wind farm
in Jhimpir 100MW, and HydroChina Dawood wind farm in Gharo 50MW.

The remaining are at different stages of progress monitored closely, according to details
available on the dedicated government website.

China clearly appeared determined to push through investment in the agreed projects
with or without private companies. It was not ready to wait for private investors to digest
the initiative and neither did it seem to have an appetite for private sector tantrums.

For the Pakistani business community, therefore, it was a paradoxical situation.

Cognisant of the scale and value of the gigantic investment drive under CPEC, they
understand that they can’t afford to watch from the sidelines but the challenges of
dealing with Chinese investors look insoluble.

It is important to note here that China, though not explicitly hostile to private sector
participation in CPEC projects, implicitly prefers dealing with the government. Along with
this, Pakistani companies in joint ventures with Chinese reported a lack of warmth in
partners. It has been reported that the Chinese are just keen to complete the project on
hand. They don’t seem to care about capitalizing on subsequent business opportunities
unraveled over the course.

While considering a rigid economic system being developed die to CPEC and threat to
Private business from CPEC it is also important to understand there are also companies
which are benefiting greatly. Talking about joint ventures with the Chinese, companies
like Descon, Gatron and Al-Haj Group as leading the trend in power generation,
engineering and the chemical sector. Outside CPEC, the Al-Haj FAW Motors rolled out
its first car from their plant at Port Qasim in Karachi this year.

CEO of Engro Power-gen and Sindh Engro Coal Mining Company Shamsuddin Sheikh,
who is partnering with two Chinese companies, State Power International Mendong and
China Machinery Engineering Corporation, was perfectly satisfied with the progress and
the relationship.

Thus, one could say there are a variety of viewpoints within the Pakistani business
community regarding CPEC which is closely knit to the governments implementation of
it.

CPEC Timeline
2013: Premier Li Keqian visits Pakistan and proposes China and Pakistan to merge for
cooperation in energy, infrastructure and to formally initiate the China Pakistan
Economic Corridor (CPEC). This speech is formally taken into consideration when
Prime Minister Nawaz Sharif makes his trip into Beijing to discuss further on the matter.
The same year the Joint Cooperation Committee (JCC) is formed and meets for the first
time after which major banks are brought forth. National Development Reform
Commission (NDRC) and China Development Bank (CDB) get on board and propose
plans for the priorities and steps to be taken for CPEC to transpire.

2014: CDB hold a symposium on national conditions of China and Pakistan to build the
research plan. Two versions of the plan are proposed to be formed; one by China and
the other jointly made by both parties. CDB and NRDC work together to assess
domestic planning and to complete the report. The plan outline is presented in the third
JCC meeting which is passed by a majority vote. The CPEC agreement is finalized by
Prime Minister Nawaz Sharif and President Xi Jinping which is to last for six years with
investments up to 17,000 MW of power in Pakistan.

2015: This year concentrates on CDB, Department of International Cooperation of

NRDC,
Department of Asian affairs of Ministry of Foreign Affairs of China and the Ministry of
Transport in China to work together to finalize the plan to present to Pakistan. Six
special fields are discussed with regards to the plan in terms of energy, tourism,
Gwadar Port, transportation etc. The report is finalized at the end of the year after
Pakistan’s feedback during the fourth JCC meeting.

2016: Not much work had been done during this year except for the fact that the Joint
Energy Working Group met up in Lahore to discuss energy sector investment plans
followed up similar discussions being held in Beijing.

2017: Even though the plan had been finalized by the end of 2015, the current year has
been dedicated towards finishing the long term plan of CPEC which is a hefty document
containing important factors such as the aim, goals, vision, financial and supporting
mechanisms etc. of the project. In April, this final draft was sent to Prime Minister
Nawaz Sharif for signature.
 CPEC Investment Tree

Conclusion
It is clear that CPEC brings in a great amount of benefit and return for Pakistan in both
the short and long term but the question Pakistan should ask itself is at what risk. There
are a number of things this committee has to consider starting from a complete
economic and social analysis of the costs and benefits the Chinese Partnership under
the banner of the Beijing Consensus brings and then move towards coming about a
Private and Public solution to future benefit and growth. In this regard the position of
other international partners, domestic entities and the concerns of the military will also
have to be taken into consideration if Pakistan is to establish a robust position in the
competitive international economic circle of the future. What has lacked so far in
Pakistan in regards to CPEC is a multidimensional dialogue on CPEC and this is what
the following committee aims to accomplish. The process of establishing a collective
Pakistani position on CPEC from the bottom up will be most beneficial for the organic
development of Pakistan’s International position on Trade, Commerce, Finance and
ultimately Economics.
Questions A Resolution Must Answer (QARMA):
1) What are the short and long term benefits of CPEC for the common Pakistani?
2) What role does Gwadar have in the transfer of energy resources between
Pakistan and China?
3) With the colonial sentiment in mind, how can the Balochi populous and other
local’s in the region be accommodated to benefit from CPEC?
4) What are the financial obligations and terms of repayment?
5) What will be the job distribution and employment opportunities for the people of
Pakistan (Gwadar mostly)?
6) Does CPEC hinder other more strategic economic partnerships for both large
and medium sized business in Pakistan?
7) What can be possible prospects of improved Pak-Afghan relations if the three
countries enter a trilateral cooperation?
8) How will stakeholder countries entering an agreement divide areas into
designated zones?
9) What relations will the Private sector establish with the Military to maintain
security of infrastructure and future long term Investment?
10) What existing frameworks can be adopted and updated to establish one standard
and united economic framework to maintain Pakistan’s strategic position in
partaking CPEC?
References:

https://www.dawn.com/news/1333101
http://www.jstor.org/stable/43134078
http://www.jstor.org/stable/24711187
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