Research Paper Proposal

Research Methods And Techniques

Submitted To: Dr. Samreen Babar

Researchers: Hamza Abdul Rehman

Section: BBA 4-B

Date: 9th OCT, 2017

Topic: Impact On Pakistan’s Strategic Position And

Economy
 Sr.no Table of content

1 Introduction

2 Historical Background

3 China’s Interests

4 Pakistan’s Interests

5 Threats To CPEC

6 Recommendations To Encounter Threats

7 Salient Points

8 CPEC Routes

9 Pakistan’s Regional Standing

10 Pakistan’s Economy

11 Literature Review (Articles)

12 References

Since the evolution of mankind, people are in search of power and influence remains a
priority. In the present era, people have become more materialistic, thinking of money as a
tool for greatest influence considering that power comes with money. The story does not end
here, not only human beings but nations also desire influencing each other for supremacy
over other countries. Nations want to strengthen themselves by intensifying and improving
their economy. Considering the fact that in today’s world money makes a person powerful
and influential, there is no denial to the fact that strong economy and resources make the
nations powerful and influential too. There are mainly four M’s of power (Money, Military,
Media and Manpower), out of which the most important is money. If the economy of a
country flourishes, the remaining three flourish as well.

INTRODUCTION
The 3000-km CPEC (China- Pakistan economic corridor), is one of the massive economic
corridors which comprises of a set of projects under construction, costing $46 billion. These
construction activities consist of a network of highways, railways, pipelines, power projects
and much more. It is among the six economic corridors conceived under China’s Silk Road
Economic Belt and 21STCentury Maritime Silk Road. CPEC is an enormous project which
aims to aid trade, business and employment along a route that basically connects Xinjiang
(Kashgar) and Gwadar. It is proposed to speedily expand and improve Pakistani
infrastructure and deepen the financial links between Pakistan and China. It basically refers to
a clutch of major infrastructure projects currently underway in Pakistan. For both the
countries, CPEC project is a strong pillar of economic, commercial, regional and cultural
connectivity and it is expected that the impact would be very positive.

HISTORICAL BACKGROUND - CPEC

Pakistan and China’s strategic alliance was formed in the year 1972 and the economic
cooperation began in 1979. China’s interests in Pakistan’s deep sea harbor at Gwadar were
revived in 1998 and China began construction there in 2002 which was accomplished by
2006. The most essential part of this corridor is Gwadar, purchased by Pakistan from Oman.
The project was first proposed by General Pervez Musharraf, but was delayed due to political
instability in the country. CPEC was first proposed by Chinese Premier Li Keqiang during his
visit to Pakistan in 2013.The President of Pakistan Mamnoon Hussein in February 2014
visited People’s Republic of China and discussed the plan for an economic corridor
comprising of different projects in Pakistan. Finally, both the countries signed an agreement
on 20th April 2015 to start commence work on the mammoth $46 billion project.
WHY CHINA RESORTED TO CPEC?- CHINA’S INTERESTS
 China is an economically strong country and has enormous manpower. Middle-
Eastern countries including Saudi Arabia, Qatar, UAE and Oman are oil-rich
countries and China need a regular and steady supply of oil for its industry, which is
one of the most essential part of a country’s economy. The supply of oil from these
countries is only possible through “Strait Of Hormuz”, which is quiet close to these
oil-rich countries. China can only have access to oil through Gwadar Port in Pakistan.
CPEC project will also shorten route for China’s energy imports from Middle East by
12000-kms. Secondly, it can have access to the Arabian Sea which is a perfect trade
route.
 China currently use the South China Sea for trade and supply of oil but tensions can
flare up anytime in that region resulting in a halt to supply of oil to China – a disaster
for Chinese economy.
 China’s eastern province Xinjiang is underdeveloped and only 6% of China’s
population live in that region, due to limited development. Whereas, 94% of the
population lives in the western part of China. Therefore, China desire developing
Xinjiang province which will reduce its isolation from the developed region.
 Other reasons include easy access to markets, economic growth, foreign exchange
improvement and tourism development.
PAKISTAN’S INTERESTS
CPEC can be called as a blessing in disguise for Pakistan. There are a number of advantages
in favor of Pakistan due to this project. Salient interests are as following:-

 Development of Baluchistan province

Baluchistan is the biggest province of Pakistan which is mineral rich and has huge
reserves of natural resources that have been neglected for years. It has world’s fifth
largest reserves of gold and copper. This province has been ignored for reasons including
inattention by feudal aristocracy, corruption, poor literacy rate and neglect by the Central
Government. With the establishment of CPEC, Baluchistan can benefit in a number of
ways. In other words, it can be a game changer for Baluchistan as it would provide new
markets to the area and a number of opportunities for the local inhabitants. Due to the
infrastructure, roads, railways etc, the property value has also skyrocketed in the
province.

 Generation of revenue

Just as Karachi is the economic hub of Pakistan, Gawadar, which is said to be a gift from
nature in the shape of deep sea port, will generate numerous revenue due to the
infrastructure and mega projects which will connect China, the land locked country, to
Afghanistan and Tajikistan, providing opportunities for the provincial governments as
well, to develop industrial estates along the route. This all development would result in
generation of revenue in the shape of taxes and duties from the moving goods.

 Higher GDP

The mega project is expected to increase the GDP of Pakistan from 4.71% to
approximately 7.5%, which is extremely good for development of Pakistan.

 Employment

It is expected that CPEC will provide over 2 million direct and indirect jobs to people in
Pakistan thereby boosting its economy. According to statistics, the project will create
about 700,000 jobs in 2015-2030. The growth of employment rate will flourish the
country from each and every aspect. The China-Pakistan Economic Corridor will open
doors to enormous economic opportunities in Pakistan and will physically connect the
markets of China to Asia, Europe and further. Following are some other benefits of
CPEC project to Pakistan;

 Increase in foreign exchange

 Infrastructure/ Industrial development
 Tourism development
 Easy access to the markets
 Gateway to Central Asian countries
 Overcoming energy crisis
THREATS TO CPEC
Being a mega project for a developing country like Pakistan which is an Islamic country as
well, threats are imminent, both internally and externally which must be addressed with
foresight. Pakistan being a Third world country, is facing innumerable challenges currently
including terrorism, over population, pollution, bad governance, corruption and many more.
With such enormous infrastructural and economic development, adversaries like India or
Afghanistan will leave no option/ opportunity to inflict damage to the massive economic
corridor.

 India’s concern

For India, CPEC is a thorn in its paw. India being the enemy of Pakistan since its
independence, objected to the project providing reasons such as, the corridor passes
through Pakistan Occupied Kashmir (PoK). Since India has always been in bad terms
with Pakistan and China, it cannot absorb the fact that both the countries are benefitting
from the economic corridor. PM Modi has opened a special office in Delhi to disrupt the
working of CPEC.

While some say that India has objected to it, experts say that India has no worry over the
construction of CPEC as Pakistan as a neighbor will become economically strong which
will bring stability in the whole region. However, Pakistan need to stay alarmed as India
can be a big threat to CPEC as India would never accept prosperity of its adversary.

 Terrorism

Terrorism being a common activity in Pakistan is one of the biggest threats to CPEC
project and can be greatly expected. China demanded deployment of Pakistan Army in
the entire region of construction to protect its workers from terrorist attacks for which two
military divisions will be raised.

 Other provinces

CPEC pass through selective regions and therefore other provinces feel alienated.
Objections are raised on selection of route of the project. Recently, AsfandYarWali
remarked as CPEC neglects Pukhtoons, MQM’s anti-Pakistan slogans and Achakzai’s
anti-state speech are creating unrest in the country which has the potential of disrupting
CPEC.

 United States

United States of America is also a big hurdle in the execution of CPEC project as it has its
own concerns. It is impressing upon the Government of Pakistan to discontinue the
project.
 HOW TO COUNTER THESE THREATS (RECOMMENDATIONS)
 Political Front: All political parties must show full interest in the project by
supporting it instead of criticizing it, as the project will result in the betterment of the
whole country. The political parties need to resolve their internal issues within
themselves and make endeavor towards mutual benefits.
 Security Concerns: The government need to provide full security including aerial
support/ reconnaissance in the areas where the project is being executedto ensure
safety and security of the workers to make the project a success. Working in a
threatening environment is demoralizing.
 Unity is Strength: All four provinces and the Federal Government must join hands
for economic, cultural and commercial development of the country and for
maintenance of peace and harmony within the country. Coordination and sharing of
information between all the stakeholders is key to successful execution of the project
as isolation create suspicions and uncertainties which is undesirable for a project of
such large scope.
 Timely Initiation: Government must ensure that work on the project is not
delayed due to any reason especially bureaucratic procedures rather it should
concentrate on one-window operation. Delay will bring no dividends rather it would
provide space to the terrorists and other anti-state actors to create hurdles in the
successful completion of the project.

Salient Points
The salient points, the review meeting are as under:-

 Historically, the very concept of a corridor, has been a cause of development in different
parts of the world. In the post-1945 period, European Economic Community was formed
(1957). Later, European Union (EU) was created in November 1993. Currently, the free
movement of people, goods, services and capital are the pillars of EU.

 The CPEC will be a channel for the Maritime Silk Route that imagines connecting three
billion people in Asia, Africa and Europe. As stated by President Xi Jinping: “The
China-Pakistan Economic Corridor is located where the Silk Road Economic Belt and
the 21st Century Maritime Silk Road meet.”
 The construction of CPEC would be along the Karakorum Highway build during the
1970s from the Pakistani town of Havalian in Hazara division to Khunjerab Pass, the
border of China and Pakistan.

 CPEC is equally beneficial to China. The port of Shanghai is 10,000 kilometres from the
Strait of Hormuz by sea via the Malacca route while Kashgar, the capital of Xinjiang, is
about 4500 kilometres from the port of Shanghai. However, Kashgar is 2800 kilometres
from Gwadar via the envisaged CPEC and hence just over 3400 kilometres from the
Strait of Hormuz. It makes plain economic sense for Beijing to prefer this route only on
the basis of the time distance equation. However, besides economy China also faces
security issues which make the Gwadar-Kashgar route important. The ships travelling
from the Persian Gulf or the Red Sea have to pass close to the Indian territory as well as
through the Malacca Strait. China is fully aware of the vulnerability of the ships
throughout the long sea passage and particularly through the Malacca which is termed by
the Chinese as the “Malacca Dilemma”. China is, therefore, looking for alternative
options to safeguard its supplies and Gwadar provides the most secure and economically
feasible alternative to link with this side of the world.

 The four main pillars of CPEC are Gwadar port, communication infrastructure, energy
infrastructure and industrial zones.

 China has made commitment to invest around US $ 46 billion in the developmental

projects (which is roughly 20 percent of Pakistan’s annual GDP, with approximately US
$ 28 billion in immediate projects and the rest allocated for projects in the pipeline). In
total, the energy projects will add 17,000 megawatts of electricity generation at a cost of
US $ 34 billion.The rest of the money will be spent on transport infrastructure, including
upgrading the railway line between the port megacity of Karachi and Peshawar. Major
infrastructural projects to be constructed under the CPEC include Gwadar East Bay
Expressway, Gwadar International airport, up-gradation of KKH phase-II, parts of
Karachi–Lahore Motorway and Muzaffarabad–Mirpur Expressway.

 The amount spent on the projects will be in the form of concessional loans, mainly from
Chinese banks to Chinese companies for specific projects. These projects will take three
to fifteen years to complete. Chinese engineers, technicians and labour will come to
Pakistan for construction of these projects. The Pakistan’s Army (principally the Frontier
Works Organization) and civilian personnel will also be working on some of these
projects.
CPEC – Routes:
There are three routes of CPEC when it enters to Khyber-Pakhtunkhwa from the Khunjerab
Pass and Gilgit-Baltistan:-

 The first (Western) route suggests that the CPEC will enter Balochistan via Dera Ismail
Khan to Zhob, Qila Saifullah, Quetta, Kalat, Punjgur, Turbet and Gwadar.
 The second (Central) route goes from Dera Ismail Khan to Dera Ghazi Khan and
onwards to Dera Murad Jamali, Khuzdar, Punjgur, Turbet to Gwadar.
 The third route (Eastern) enters the Punjab province from Khyber Pakhtunkhwa, going
through Lahore, Multan and Sukkur, from there it takes the traditional highway to enter
Balochistan, passing through Khuzdar, Punjgur, Turbet and Gwadar.
 An alternate route will go from Sukkur to Karachi and from there take the coastal
highway to Gwadar. The first route is the shortest of the three routes. It will pass through
very underdeveloped areas (that have security problems). The third route (Eastern) is
already functional, and requires upgrading.
 Pakistan’s Regional Standing :
 The regional states can increase their mutual relevance and build a cooperative and
positive environment by engaging in greater economic activity, especially trade
cooperation. Pakistan, located at the crossroads of resource rich Central and West Asia,
the Persian Gulf and the oil rich Middle East holds a strategic position. But, due to the
factors like volatile geopolitics, inadequate transportation systems and energy shortage,
Pakistani economy has remained short of using its full potential. With the
implementation of CPEC, Pakistan will be able to enhance its strategic importance.
CPEC would link South Asia, Central Asia, North Africa and Gulf states with economic
and energy cooperation ties. Pakistan’s Ambassador to China Masood Khalid said: “The
territory of Pakistan is like a corridor which connects China and Arabian Sea and
Pakistan is a bridge between China and the world.”

 The Gwadar Port located at the Arabian sea, has the capacity of handling up to 19 million
tons of crude oil per year, after putting the required infrastructure in place. Through the
construction of CPEC, China is interested in developing a direct crude oil pipeline from
Gwadar to Xinjiang.

 With the development of Gwadar Port, all trade to and from Central Asian Republics is
going to adopt the shortest available route via Gwadar and the trade benefits to Pakistan
are expected to multiply. Pakistan could become a major world channel for petro-
chemical trade and greatly stimulate its economic growth. Moreover, the province of
Balochistan will become significant for regional integration.

 It is also expected that the corridor will link with India and Afghanistan. However, India
has been skeptical about the Belt and Road initiative, as India does not wish to see China
expand its influence in South Asia, nor the formation of a second pole of influence in
South Asia, which could be a threat to its economy. India has raised objections to the
planned corridor for passing through Gilgit-Baltistan. To counter Chinese moves, India
has also announced to invest US $ 100 million in the development of Iranian Chabahar
port, which they believe will be a means to reach Afghanistan and Central Asia without
having to rely on Pakistan.
 Pakistan’s Economy:

 According to Minister for Planning Development and Reform Ahsan Iqbal, “Pakistan-
China Economic Corridor is not the name of a single route or alignment, it is a
comprehensive package of cooperative initiatives and projects encompassing regional
connectivity, information network infrastructure, energy cooperation, industry and
industrial parks, agricultural development, and poverty alleviation, financial cooperation
as well as livelihood improvement including municipal infrastructure, education, public
health and people-to-people communication which will result in thousands of new
ventures and millions of jobs in every part of Pakistan.”

 The Asian Development Bank has termed the project as, “CPEC will connect economic
agents along a defined geography. It will provide connection between economic nodes or
hubs, centered on urban landscapes, in which large amount of economic resources and
actors are concentrated. They link the supply and demand sides of markets.”

 Pakistan is the second largest trading partner of China in South Asia; the trade volume
stands at US $ 19 billion. According to data released by the State Bank of Pakistan, the
country received US $ 975.4 million as FDI during July-March 2015/16 as compared to
the US $ 832.2 million in the corresponding period of last fiscal year. The FDI from
China grew by 167 percent to US $ 516 million during July-March 2015/16 as compared
to the US $ 193.3 million in the corresponding period of the last fiscal year.

 Federal Minister for Planning Development and Reforms, Ahsan Iqbal said: “The
production of 10,000 megawatts of energy under the CPEC would help overcome the
energy crisis by 2018 as well as upgrade the existing road network of the country.”

 Universities are also being planned on CPEC’s Western route. These universities will
educate and empower the people of FATA, Zhob and Gwadar. Tourism will also flourish
under CPEC.
Articles Review :

Article 1

Title: CPEC; A Chinese dream being materialized through Pakistan

Author: Shakeel Ahmed Ramay
Year: 2016
Link: https://think-asia.org/bitstream/handle/11540/6694/ChinaPakistan.pdf?sequence=1

Through the China Pakistan Economic Corridor China hopes enhance its trade with the rest
of the region. This will also provide the way for China to magnify its role in the peace &
development process in South Asia & the key here is Pakistan’s strategic location.
Historically China & Pakistan have always proved to be good for each other whether the
matter was about economic ties or supporting and extending each other’s global reach. China
wants to rise to a global level in power and trade & this is why they highly value regional
connectivity. CPEC helps their objectives because of its strategic location between the
Maritime Belt & the Road Belt. Not only will this help them gain more power in the Indian
Ocean but it is also crucial for the energy route between Africa & the Middle East which is
deemed of great importance for the future of China. The economic factor of CPEC for
Pakistan is very important as well, because it is being called a game changer for the region.
CPEC is forecasted to increase GDP growth rate at 1.5 per cent in next three years. It will
also increase private investment because of the changing environment, economic
opportunities, improved infrastructure, stable economy and generation of much needed
energy.

Article 2

Title: Strategic Meaning of the China-Pakistan Economic Corridor

Author: Moonis Ahmar

Link: http://www.issi.org.pk/wp-content/uploads/2015/12/Moonis-Ahmar_3435_SS_41_20142015.pdf

Moonis Ahmar here highlights the point that the China Pakistan Economic Corridor will
serve the interest of both nations and has the potential to change the face and shake the power
of balance in the region. First it will establish a strong and strategic link between both
countries allowing shipping of Chinese products with much greater ease and lower costs to
the Middle East, Africa & Europe. To Pakistan the benefit lies in the vast amounts of
investment that are just waiting to change the most backwards areas of Pakistan into
cosmopolitans, which will take about 15-20 years but it will be worth the wait. China will
overtake the United States as the world’s first economic power, and Beijing’s approach to
take advantage of Pakistan’s strategic location reflects how serious the Chinese leadership is
for promoting regional connectivity. Moonis Ahmar writes that there are challenges that face
this project too. Besides the security threat that out security forces are handling every day,
there could be a lack of domestic funding. Even though China has enough money to spend on
its part, Pakistanis might fall short to fill they small gap they need to fulfill in order to make
CPEC a complete success.

Article 3 :

Title: CPEC challenges and opportunities for Pakistan

Author: Massarrat Abid & Ayesha Ashfaq

Link: http://pu.edu.pk/images/journal/studies/PDF-FILES/Artical-7_v16_2_2015.pdf

The writers of this article tell us that China Pakistan Economic Corridor is a game changer
project which will incorporate a 2,000 kilometer transport link between Kashgar in
northwestern China to the Gwadar port on the Arabian Sea near the border with Iran. When
this corridor will be completed, oil from the Middle East could be off loaded at Gwadar,
which is located just outside the mouth of the Gulf, and transported to China through
Balochistan and over the Karakoram Mountain. There are many challenges for Pakistan in
implementing this project. At the same time, Pakistan will have many benefits from this
corridor
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