National and International Issues

CPEC: A Game Changer for All

Wow; when strategy meets opportunity, miracles can happen. Miracles should happen. When they don’t, someone was found sleeping and the opportunity went past. Seizing the moment is another kernel of holding onto an opportunity and making something of it. A far superior version is when none exists but an opportunity is created, building on it to convert it into one’s favour. That's smart, but rare.



For ever we have known that Pakistan is bequeathed a unique geographic advantage which is strategic and which holds the key to why it will always be the most important real estate in Central-West-South Asia and the Middle East. That makes for a pivotal geostrategic positioning. Think India, Iran, China and Afghanistan and by extension the U.S., and then the riches of the Gulf, and if that’s what encloses a real estate it is important enough. This region also happens to sit in the middle of the greatest geopolitical and geo-economic competition to control and dominate the resources in the region. A beneficial geographic location is like a cheque of immense wealth inherited from a wealthy relative, whose value remains unrealized unless it is cashed at the teller. Soon it too will lose its value for being outdated. That's the difficulty with cheques that aren’t cashed, people soon find alternate means to making good. 
President Xi Jinping of China, sitting on some record hard cash conceived of putting to effect the capital at hand. He declared the revival of the ancient Silk Route with a twenty-first century plan to tie in some 152 countries over three decades. Money will be spent on infrastructure development, connectivity and economic enablers such as capital inflows, talent pools and induction of technology. First known as the One Belt, One Road it has gradually mutated into an internationally more palatable Belt and Road Initiative (BRI). Through it China hopes to connect its hinterland as Sinkiang in the West and its Tibetan South to adjoining regions which will run from Sinkiang to the South through Pakistan and Tibet to the east, connecting with Nepal and Bhutan. Another spoke runs down along Myanmar and Bangladesh connecting through its sea component with Sri Lanka. Called the Maritime Silk Route, which irks India to no end, eastern China links through the South China Sea through it with Sri Lanka and Gwadar in Pakistan and southwards to the Middle East and Africa. Not to forget how China links with Europe through Central Asia and Turkey over land which includes roads, railways and pipelines carrying gas and oil. 
Clearly this remains a link for enhancing cultural and trade relations which invariably will find political congruence. That's the rub for those in the West who perceive China as a competitor and an emerging threat. That's the BRI with multifarious implications that arise in the form of challenges in South China Sea, Sinkiang, Afghanistan and Iran, all enclosing a key aspect of the BRI in the China-Pakistan Economic Corridor (CPEC). If by sustaining strife in the areas of CPEC the unrest can be extended to China’s restless western regions that explains why peace is difficult to find in the region. Sometimes the Taliban are a problem and other times ISIS when it gets inducted in the region with unmatched ease. Afghanistan, Iran and Pakistan remain under geopolitical stress and even as they endeavour to find relief it remains slow in coming, or not at all. Despite it all CPEC lumbers along.
Its initial pace was remarkable. There were reasons for it. The PPP’s tenure from 2008-13 had been marked by long hours of power outages all across the country. The country just wasn't producing enough energy and while those in the government at the time tried to expropriate benefits by allowing rental power plants in the garb of making up for an acute shortage which was impacting the common man and hence was an emergent need, it could never make up for the shortfall. A lot of what was apparently added was never commissioned even as precious government funds were lost to it. Allegedly most was pilfered away. With the CPEC two things began on an immediate basis. Road network connecting Chinese hinterland with the port in Gwadar – a far shorter distance than connecting with Shanghai; and a strategic alternative to any trouble that might brew in South China Sea – was a Chinese priority; it served their cause and intent of the BRI. Pakistan in addition sought power plants which were conveniently available as China was in the process of replacing some of theirs with newer technologies. Those were thus provisioned to Pakistan as per the latter’s needs at prevalent terms and rates highly favourable to the independent power plant producers in the country. 
These two formed the first two planks of the CPEC project which saw intense activity and engagement of the Pakistani government with China. Alongside began smaller projects of political priority for the party in power which had greater visibility and political return. These picked up bad press and widespread criticism for their inappropriateness considering there were greater challenges elsewhere in the country. To most it was precious money lost at the political altar. These were included in the CPEC as local off-sets. Most money in CPEC being loans adding to the already high debt pile, the insensitivity to such extravagance was rather unsavory. Pakistan’s real gains were infrastructure development and power production. Power shortages reduced to a considerable degree as the first phase of CPEC neared its end. But a bad press cost the PML-N its next election. The PTI replaced PML-N. 
The PTI had fought its election against PML-N on the issues of rampant corruption and financial profligacy. Its first instinct was to harness money spending and to review every project and program to first cleanse it off any grime and then review it for applicability. It also inherited an unsustainable fiscal deficit and a huge debt liability. With the country on the verge of bankruptcy, PTI’s first instinct was to cut down all spending. This impacted the ongoing CPEC projects the most when work and funding both slowed down to a trickle. It has taken this government almost a year to get its act together and get a handle on the financial state of the country. This has upset China considerably. CPEC was its flagship project in the larger BRI scheme and despite the strategic and enduring nature of relationship between the two countries, it felt somehow irritated. It needed assurances and reassurances from all in the power cycle to underwrite their commitment to what had already been invested and towards its completion.
There has thus been a hiatus of sorts in the CPEC implementation. It is only now that the necessary equity by the Pakistani government is being released to reinitiate what had been left pending. Repeated visits by the hierarchy in government and elsewhere to recommit to the project has also encouraged the Chinese to restart their funding to complete what had been put on hold. There are major missing links in the road development and connectivity that will need to be completed. If all links and parallel road structures are developed as envisaged and without exception it shall be the basis of greater economic, cultural and social intermingling within the country giving cause to greater prosperity and narrowing the inequality in various regions of the country. Infrastructure connectivity is the critical enabler of uniform development and catching up in regions that have been left behind. This enabling structure can form the basis of greatly more united and integrated Pakistan than the cocoons of either prosperity or dismal deprivation that blot the country’s landscape currently. The three parallel axis of road infrastructure as envisaged in the CPEC must thus regain critical centrality in the development plan. From there it can then project lateral connections to far and wide of the remote districts and beyond. 
Power plants now done, under the right or not-so-right terms and conditions, the next step is to develop the Special Economic Zones which when established industry will be enabled. These developmental strategies in parallel will enable jobs which can make up for what has been missing till date from the present government’s work plan. Greater efficiency and where possible a cleansing review of the terms and conditions on the independent power producers projects can help save some money. Clearly, where sovereign guarantees are involved there is little scope for it, but a bilateral arrangement with a supplier like China and its subordinated power industry may just be what can be tested for some promise. Monies saved can be used for social sector development.
The development of Special Economic Zones will need a multifarious facilitation of critical infrastructural development in power, water, gas and other inputs. This shall be a critical phase where if sufficient commitment is shown we will reap the real benefits of CPEC. This is where investment will be made and jobs can be ensured on a long-term basis. The government must work on the concept of specialized hubs of industry in each zone. IT, textile, electronics, food products, etc come to mind. A zone may thus be optimized to support such institution of a specialist product. Just the road connectivity will only deliver indirect advantage while it will primarily serve the interest of China mainly. We can, with little thought, avoid such eventuality and accrue greater benefit.
If and when we make CPEC fully functional and productive and put it up as a model of progress and increased connectivity shall it reach the stage of strategic dividends. A connection from it through Afghanistan to Central Asia or from the western reaches of China itself, if Afghanistan does not stabilize, will plug Central Asia into this spoke-and-hub arrangement. Ditto for Iran, Turkey and the larger Gulf region when markets in China, Central Asia and India seem so reachable and the connections are so efficient. Pakistan would have then cashed its geographical endowment bequeathed to it by nature and sustaining geopolitics. 
Can we supplant it to Pakistan’s benefit enabling it a role for fostering peace in the region? A connected Iran will have a huge market available to it in China and with a little luck in India. Even if India was to turn away from the prospect of connecting through or with Pakistan it may find it impossible to look away from cheaper gas exports from Iran. We must thus plug Iran into the CPEC’s spine to widen the frame of sustainability and inherent leverage for peace and prosperity as its dividends. If such connectivity is also profitably functional for the rest why would and for how long could India keep away from it? That's a rational query or a hope to pursue. It will only be a matter of time. Again, absence of India from this hub-and-spoke arrangement will only mean China will rule the roost. Can India make this mistake twice by abdicating the entire South-Central Asia region in China’s control? Common sense tells us otherwise. Corporate India will demand access to the raw riches in Afghanistan and the rest of Central Asia. The imperatives of economic benefit far outweigh any ideational linkage even if it be to implement the extremes of Hindutva ideology. Saudi Arabia or Qatar or the UAE will find it equally handy to build their refineries next to the pipelines and the road infrastructures as they look to feed hungry markets.
Such interdependencies can help change entrenched mindsets to sustain the advantage of an economic upturn. That is where lies the strategic fallout substantive enough for Pakistan to benefit from. Lateral connections to the CPEC in the east and the west will tie in the entire region into a peace dividend that will be difficult to achieve otherwise; such is the weight of the baggage carried in the histories and the geographies of this entire region. The larger SAARC region is the least connected geographical region of the world. CPEC can help change it into becoming the most connected region. Pakistan’s geographical advantage can bestow such huge favours to the people who have yet to dispense with poverty and who deserve better. India for the moment may seem too dismissive of anything that Pakistan may project or present as a viable alternative in the political economies but it will need a paradigm shift with concrete and visible economic and cultural dividends which will force India’s hand. The benefits are there for India to lose and indeed if she does dismiss them away in her newfound arrogance the loss is hers. 
Pakistan has only gains to make. It is absolutely essential that we complete the CPEC associated projects in a timely fashion and then equip it to enable the turn-around of the Pakistani economy. Pakistan will be naive to miss the opportunity. What may have appeared a rather lackadaisical approach in the last year must be turned on its face to invest all available resource to the success of CPEC. It may have been China’s strategic necessity to initiate the CPEC and the BRI but it has given Pakistan the strategic opportunity to turn it into the awaited economic bonanza that it has the making of. It is Pakistan’s game to lose. The success and benefits of it are practically ordained in its conception. CPEC can be that game changer, but it shall need to be done.


The writer is a retired Air Vice Marshal and security analyst who has also served as Pakistan’s Ambassador to Sri Lanka.
E-mail: [email protected]         
 

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