Naya Pakistan and Gwadar

There is much ambiguity over the Chinese president’s visit to Pakistan. Initial reports suggested: “It is not absolutely clear whether the Chinese President Xi Jinping’s visit to Pakistan will go ahead or will it be cancelled. In a worst case scenario, if this visit is called off even then all the projects approved will still be initiated”. Ensuing reports went on to say: “Due to serious security concerns Chinese President Xi Jinping’s visit to Pakistan has been cancelled. It is a body blow to Pakistan as it is facing increasing isolation in the world”. In August, Sri Lankan President Mahinda Rajapaksa also cancelled his state visit to Pakistan in the wake of the protesters occupying the main access point leading to Parliament and important government buildings.

For Pakistan, the importance of Chinese investment cannot be overstated. The focal point of this new and bold economic programme is the Gwadar port. In all likelihood, Gwadar’s sun-kissed sand will be the foundation material that will give shape and substance to Naya Pakistan. Quite a reversal of fortunes. Pakistan’s most underdeveloped province, Balochistan, is poised at the forefront of events that may change the destiny of Pakistan. All because the Chinese government has decided to invest in the economic development of its neighbouring regions by building multiple new, efficient trade routes into South Asia, the Gulf and the Central Asian Republics (CARs) developing and strengthening connections to its own West China region.

A crucial element of this programme is the China-Pakistan Economic Corridor comprising an integrated trade pathway consisting of road, rail and sea linkages between China, Pakistan and CARs. For China, this economic corridor is vital to securing its long-term economic growth. The corridor halves the travel costs and time required to transport oil and gas from the Gulf region to China and opens a new corridor for the Chinese exports to reach the whole region.

As a sponsoring country, China plans to fund the majority of the costs. In fact, China is considering where possible to accept provincial guarantees rather than sovereign assurances. Both Bilawal Bhutto Zardari and Shahbaz Sharif were in China to convince investors in this regard.

However, despite China’s track record of maintaining excellent ‘brotherly’ relations with Pakistan, it cannot take its commitments for granted. The Pakistani government should be able to provide assurances to Chinese banks and private institutions that it will provide corruption-free governance, transparent allocation of local contacts, security of life and assets. It must demonstrate beyond doubt its ability, commitment and popular support for the programme.

In this context, the current political crisis being played out in Islamabad’s Red Zone is of particular concern — if not resolved quickly it may spook Chinese investors. Meanwhile, the Chinese government is under pressure from various countries on the international front. India, its major trading partner, is publicly opposed to the management takeover of and investment in Gwadar port by China. The Indians argue that this will weaken their marine dominance, by providing for the first time in history, direct access to Chinese to the Arabian Sea and the Strait of Hormuz, gateway for a third of the world’s traded oil.

Some Gulf States have over the years consistently opposed development of a deep-sea port in Gwadar as it will impact port operations in Dubai — historically the only port available for global marine trade passing through the Gulf. The current unrest in Islamabad and its timing, coinciding as it does with the Chinese president’s visit, could be part of a greater plan to curtail development of Pakistan in general and its naturally gifted coastal regions in particular. However, as discussed, quantum of the proposed investment in Pakistan to the tune of $34 billion is unparalleled in its history and opposition to Chinese investment is also unmatched in the world history.

It is imperative that all sections of Pakistani society, including both the Houses of Parliament, political parties, army, civil bureaucracy and its vibrant civil society present a united and committed front on this issue irrespective of political or ideological differences. This unified show of national commitment will provide their Chinese friends further confidence to forge ahead despite the challenges and reaffirm their commitment to Pakistan.

Published in The Express Tribune, September 6^th, 2014.

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