In an economically impoverished Pakistan, where politics is all about money, the $51 billion (Dh187.23 billion) Chinese-sponsored project in the shape of the China-Pakistan Economic Corridor (CPEC) has fuelled acrimony amongst federal units.
This is the largest Chinese investment in another country. It is a fifth of Pakistan’s gross domestic product (GDP) and more than twice the size of foreign direct investment (FDI) into Pakistan since 2008. Pakistan’s big gain will be energy and infrastructure development.
It is a combination of projects with economic and security implications going far beyond the two direct participants — China and Pakistan. It has bearings over a much larger region. Iran has expressed interest in becoming part of the CPEC and so has Afghanistan. Initial euphoria aside, the CPEC is beset by problems from the very beginning caused mainly by political acrimony in Pakistan, inept bureaucracy and a civilian-military divide.
Details of the CPEC are still shrouded in mystery but leaked bits fuel suspicion about the whole financial arrangement. So much so that even the governor of State Bank of Pakistan said he was not aware of exact terms of the agreement.
This inter-provincial bickering is of serious concern for the Chinese who want to stay clear of any political controversy. The Chinese reportedly keep nudging the Pakistan government to aim less for political or electoral capital and do more to carry smaller provinces along.
Unfortunately, the politicians remain in their typical political point-scoring mode against their opponents. The bureaucracy shows no seriousness too, leaving the Pakistan Army that seems to have taken institutional ownership of the CPEC as a sole organisation on which the country and the Chinese can rely on. The Chinese too have made it clear by their words and actions that they are more comfortable with the army taking on a higher profile and role in the CPEC.
Wary of the military’s domineering influence, Islamabad is withholding the terms of reference for the military’s involvement as well as the funds necessary for a special security force to safeguard Chinese personnel and installations. In a veiled warning at the delays, Chinese Ambassador to Islamabad Sun Wei-dong recently said that “construction and safety of the CPEC will have to go side by side”.
The CPEC’s importance is enhanced because of Gwadar port. In view of the robust military relationship between China and Pakistan and the unfolding strategic power play in the Indian Ocean, the port adds a huge security dimension to the CPEC. Along with the Ormara naval base 280km to its east, Gwadar provides Pakistan with relatively safe bases in case India-Pakistan hostilities break out again.
Gwadar’s location at the mouth of the Straits of Hormuz, the biggest oil chokepoint in the world, provides China with several strategic advantages. Nearly 80 per cent of China’s energy imports pass through the Indian Ocean, the Malacca Straits and the South China Sea, which during contentious times can cause serious supply dilemmas for China.
With maritime trade at $5 trillion (Dh18.36 trillion) and rising fast, an operational Gwadar and CPEC arteries allow China to cut several thousands of miles from an insecure route and gain a tactical advantage over the US and India. Within China, connectivity through Gwadar provides an immediate boost to developmental prospects in its western region.
With Gwadar port’s management now in the hands of the Chinese, it is only a matter of time before Chinese navy vessels will be able to dock at the port, thus gaining an edge over its adversaries around the region and beyond. Pakistan, given its own vulnerabilities, will be more than willing to extend facilities China might need to play on the global chessboard. And with Djibouti naval base on Bab Al Mandeb, in the Red Sea, getting ready, the Chinese present a formidable challenge to the US and India.
Pakistan has long eyed developing Gwadar as a bridgehead for commercial activity — ever since Pakistan purchased the port from Oman in 1958. It was during these days the late Shah of Iran, on a visit to Pakistan, offered to then President Ayub Khan the use of a developed Iranian port like Abadan in hopes of dissuading Pakistan from pumping huge amounts of money into Gwadar. The rest is history. Some analysts point towards the construction of the Karakuram Highway connecting China with Pakistan during the early ’60s as a pre-cursor to Gwadar as a part of a grand strategic purpose. Iran, now recovering from years of damaging western sanctions, has expressed interest in becoming a part of the CPEC. China’s interests converge with that of Iran when the latter’s gas and oil pipelines can directly be connected with the CPEC’s arterial lines, thus supplying energy to China and liberating both from a looming American threat of supply disruptions at sea.
Notwithstanding Pakistan’s internal political fissures since the military took ownership of the project, Islamabad will ensure that the CPEC takes off from Gwadar — the ‘great monument of Pakistan-China friendship’ — to Xinjinag. This allows China a toehold in the Arabian Sea and reinforces Pakistan and China’s “iron friendship.”
Sajjad Ashraf is an adjunct professor at the Lee Kuan Yew School of Public Policy, National University of Singapore. He was a member of Pakistan Foreign Service 1973–2008 and served as Pakistan’s Consul General to Dubai during the mid ’90s.
