Pakistan's Choice of Regional Economic Blocs: CAREC or SAARC or Both?

Pakistan sits between two economically very dynamic regions: Central Asia (and Western China) and South Asia. Which region is better suited for its economic connectivity and integration? Should Islamabad focus on CAREC (Central Asia Regional Economic Cooperation) rather than SAARC (South Asian Association of Regional Cooperation)?

Ideally, Pakistan should be a major player in both vibrant regions. However, Indian Prime Minister Narendra Modi's policy of attempting to isolate Pakistan has essentially forced it to choose.

First, Mr. Modi decided to boycott this year's SAARC summit that was scheduled to take place in Islamabad, Pakistan. Then, he unsuccessfully attempted to hijack the BRICS economic summit in India to use it as a political platform to attack and isolate Pakistan.  The signal to Pakistan was unmistakable: Forget about SAARC.

Central Asia Regional Economic Cooperation (CAREC):

CAREC is a growing group of nations that is currently made up of 11 members, including China and a list of STANs.   The current membership includes Afghanistan (joined CAREC in 2005), Azerbaijan (2003), People's Republic of China (1997), Georgia (2016), Kazakhstan (1997), Kyrgyz Republic (1997), Mongolia (2003, Pakistan (2010), Tajikistan (1998), Turkmenistan (2010) and Uzbekistan (1997).



The last ministerial meeting of CAREC nations was held in Islamabad in October, 2016. The conference theme was “Linking connectivity with economic transformation".

Welcoming fellow ministers, Pakistan's Finance Minister Ishaq Dar talked about the importance of the China-Pakistan Economic Corridor (CPEC) to improve trade flow within the region and with the rest the rest of the world.

Dar said CPEC offered a massive opportunity for connectivity between Central Asia, Middle East and Africa and was bound to play a defining role in economic development of the regions. Dar said improving the transport corridor was not an end in itself but it was an investment in establishing sound infrastructure and complementary frameworks for shared prosperity of the present and future generations in the region, according to a report in Pakistani media.

CAREC Corridors:

CAREC region is building six economic corridors to link Central Asian nations. Six multi-national institutions support the CAREC infrastructure development, including the Asian Development Bank (ADB), United Nations Development Program (UNDP), International Monetary Fund (IMF), World Bank,  Jeddah-based Islamic Development Bank and European Bank for Reconstruction & Development, according to Khaleej Times.

Out of the total $27.7 billion CAREC infrastructure investment so for, $9.9 billion or 36 per cent was financed by ADB, a senior officer of the Manila-based multinational bank told Khaleeej Times.

He said other donors had invested $10.9 billion while $6.9 billion was contributed by CAREC governments. Of these investments, transport got the major share with $8 billion or 78 per cent. Asian Development Bank Vice President Wencai Zhang said: "There are huge financing requirements in Carec for transport and trade facilitation, for which 108 projects have been identified at an investment cost of $38.8 billion for the period 2012-2020. Investment for the priority energy sector projects will be $45 billion in this period."

CPEC North-South Corridor:

China Pakistan Economic Corridor (CPEC) is a major part of the north-south corridor that will allow trade to flow among CAREC member countries, many of which are resource-rich but landlocked nations. The corridor will enable the group to access to the Pakistani seaports in Gwadar and Karachi as part of the new maritime silk route (MSR) as envisioned by China and Pakistan.

Pakistan's Finance Minister Dar says the CPEC would complement the regional connectivity initiatives of CAREC. "Once the six CAREC corridors and mega ports, now under construction, start operating, they will provide access to global markets. They will deliver services that will be important for national and regional competitiveness, productivity, employment, mobility and environmental sustainability. All of us should gear our national policies to achieve these targets."

CPEC consists of transport and communication infrastructure—roads, railways, cable, and oil and gas pipelines—that will stretch 2,700 kilometers from Gwadar on the Arabian Sea to the Khunjerab Pass at the China-Pakistan border in the Karakorams.

China and Pakistan are developing plans for an 1,800 kilometer international rail link from the city of Kashgar in the Xinjiang Uygur autonomous region in Western China to Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to Zhang Chunlin, director of Xinjiang's regional development and reform commission.



 "The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said at the two-day International Seminar on the Silk Road Economic Belt in Urumqi, Xinjiang's capital, according to China Daily.

"Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the project has already started," Zhang said. "China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang added.

Afghan Instability:

Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. A trilateral conference of China, Russia and Pakistan is scheduled this month in Moscow as part of this effort. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.

Summary:

History shows that growth of regional and global trade in East Asia, Europe and North America regions has been a major driver of economic opportunity and prosperity.  Unfortunately, SAARC has been a huge disappointment for Pakistanis.  With the development of CPEC and CAREC, Pakistan can now begin to participate in the growth of regional and global trade that will benefit the people of Pakistan.  The path to Pakistan's participation in SAARC will open up if or when India-Pakistan relations improve.

Here's a National Geographic Documentary on CPEC:

https://youtu.be/q2lWYxbIBCs




Related Links:

Haq's Musings

1800 Km Pak-China Rail Link

China Pakistan Economic Corridor

CPEC to Create Over 2 Million Jobs

Modi's Covert War in Pakistan

ADB Raises Pakistan GDP Growth Forecast

Gwadar as Hong Kong West

China-Pakistan Industrial Corridor

Indian Spy Kulbhushan Yadav's Confession

Ex Indian Spy Documents RAW Successes Against Pakistan

Pakistan FDI Soaring with Chinese Money for CPEC


Comments

Riaz Haq said…
The Countries Building New Silk Road -- And What They're Winning In The Process. #CPEC #Pakistan #China via @forbes

http://www.forbes.com/sites/wadeshepard/2016/11/22/what-win-win-along-the-new-silk-road-really-means/#22aa1adb5ab3

..almost as soon as the Soviet Union disintegrated, the countries of Central Asia and the Caucasus began looking for ways to reconnect again. Inspiration for the future was soon taken straight from the pages of history. During the days of what had retroactively been dubbed the Silk Road the countries of Central Asia acted as land bridge, connecting the booming markets of China with those in Europe. Ancient Silk Road cities like Xi’an, Samarkand, Merv, Aleppo, and Baghdad all acted as major transshipment and manufacturing centers, where middlemen would relay wares between all points of the Eurasian landmass. While there is certainly a large amount of romance attached to this simplified rendering of history, this rendering is serving as a functional road map as to how the region is moving forward and developing today.

Eurasia, as a contiguous continent stretching from the west of Europe to the eastern coast of China, is rapidly being drawn together into a massive market covering over 60 countries, 60% of the world’s population, 75% of energy resources, and 30% of GDP. Many plans have been brought forth by multiple regional players to guide this endeavor — the most dynamic of which is China’s multi-trillion dollar Belt and Road initiative — but the end goal of them all is the same: to create “win-win” solutions where all parties benefit by pursuing the similar goal of infrastructural development and economic integration.

“In order to create a situation where everybody is in the same boat in terms of economic development, they are putting together One Belt, One Road,” said Huang Jing of Singapore National University. “In other words, if everyone is economically in the same boat then if China goes up everybody goes up and if China goes down then everybody goes down. That’s the nature of the idea.”

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Pakistan currently finds itself caught in the middle of prolonged geopolitical and security quagmire. With a marked political struggle with India to the southeast, and having Iran to the west and Afghanistan to the north, the country’s economic potential has been very much stunted. Partnering with China on the China-Pakistan Economic Corridor (CPEC), a core part of the Belt and Road initiative, is seen as a key way not only for Pakistan to improve its energy capacities, enhance its infrastructure, and bolster its economy — and, ideally, assuage terrorism and other security threats in the process.

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Now a fundamental station on the China-led 21st Century Maritime Silk Road, Sri Lanka is engaging in large-scale infrastructure projects with China, which include Colombo Financial City — a financial center meant to rival Singapore and Dubai — a deep sea port in Hambantota, a new container terminal in Colombo’s port, the Mattala International Airport, and an impending 15,000 acre industrial zone that will reputedly attract 2,500 Chinese companies and create a million jobs. Although there have been multitudes of near catastrophic political, administrative, and debt problems associated with building this new infrastructure, the country’s prime minister still refers to it a once in a lifetime opportunity to jump-start development and generate a high-income society.
Riaz Haq said…
Global trade and capital flows flat or declining as globalization hits a wall.


Global capital flows:

http://www.economonitor.com/blog/2016/11/the-retreat-of-financial-globalization/


Peter McQuade and Martin Schmitz of the European Central Bank investigate the decline in capital flows between the pre-crisis period of 2005-06 and the post-crisis period of 2013-14. They report that total inflows in the post-crisis period reached about 50% of their pre-crisis levels in the advanced economies and about 80% in emerging market economies. The decline is particularly notable in the EU countries, where inflows fell to only about 25% of their previous level. The steepest declines occurred in the capital flows gathered in the “other investment” category.


Global trade flows:

https://www.bloomberg.com/view/articles/2016-11-15/what-it-will-take-for-trump-to-stop-globalization

This year has been full of news about the slowing or perhaps even end of globalization. The main evidence is that global trade volumes appear to have stopped rising, something that hardly ever happens outside of a recession. Still, if you step back a little, you can make a case that the globalization train is still chugging -- slowly -- along.


Last February, the McKinsey Global Institute put out a report on this rise of "digital globalization" and declared that:

Flows of physical goods and finance were the hallmarks of the 20th-century global economy, but today those flows have flattened or declined. Twenty-first-century globalization is increasingly defined by flows of data and information.
Riaz Haq said…
#Russia and #Pakistan slowly move towards an embrace. #India #China #CPEC #Gwadar @AJEnglish
http://www.aljazeera.com/indepth/opinion/2016/12/russia-pakistan-slowly-move-embrace-161203083811644.html

Or, how Russia got a warm-water port without firing a shot.

Ahmed Rashid is a journalist and the author of five books on Afghanistan, Pakistan and Central Asia. His latest book is 'Pakistan on the Brink, the future of Pakistan, Afghanistan and the West'.

After decades of hostility, Russia and Pakistan are gingerly trying to improve relations. Russia is cautiously wooing Pakistan in a bid to temper Islamabad's support for the Afghan Taliban and to end the civil war in Afghanistan, which is threatening Central Asia - the soft underbelly of Russian influence in the former Soviet Union territories.

Pakistan faces increasing isolation in the region - spurned by India, Afghanistan and Iran, and criticised by the US and NATO countries - because of its continued harbouring of the Afghan Taliban. At present, it is solely dependent on Chinese economic and political support.

It is not surprising, therefore, that Pakistan is desperately keen to rebuild relations with Russia. Islamabad would like to use warmer ties with Moscow to counter US and western pressure and be able to boast of more than one ally in the region.

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Pakistan offered Russia the use of Gwadar, its new Chinese-built port on the Gulf, which is close to Iran and opposite Oman. From Tsarist times, Russia has always wanted a port in the ''warm waters'' of the Gulf. When the Soviets invaded Afghanistan, Pakistan was convinced that the Russian dream was to have a base on Pakistan's Gulf coastline. Ironically, Pakistan is now offering the same facility.

However, Gwadar port is yet to become fully operational and it is surrounded by insurgencies in Afghanistan and Balochistan province. Its capacity is being enhanced by a Chinese-built network of roads that will eventually connect to the Chinese border in northern Pakistan.

Use of the port by foreign ships is still some way off, and Pakistan has not made it clear if it would allow Russian warships to dock there. The Chinese navy has already been granted landing rights at the port.

Russia has also agreed to sell helicopters to Pakistan, lifting its decades-old arms embargo against Islamabad, while India is now looking for arms from Western nations such as the US and France.

Riaz Haq said…
Dailytimes | #Pakistan #exports $5.4bn worth of services in FY16. #trade #services - http://go.shr.lc/2gOAqMf via @Shareaholic

The services sector contributing by 59.2% to Pakistan's gross domestic product (GDP) exported services worth $5.4 billion in fiscal year 2015-16 (FY16), with a deficit of $ 2.9 billion as compared to last fiscal.

The deficit of $ 2.9 billion was 3.8 percent lower than the deficit recorded last year and the State Bank of Pakistan (SBP) attributed this small improvement mainly to a reduction in the freight deficit, which is the largest component in the country's services trade profile, as a result of the big decline in oil prices.

Services exports' share in the economy has gradually increased from 50 percent in FY00 to 59 percent in FY16 .However, past data suggests that services exports have stagnated around this level since FY10.

'The commodity producing sector, which has been growing at a slower pace as compared to services, may not be able to generate sufficient exportable surpluses to meet the country's growing foreign reserves needs', SBP added.

Inflows under government services - primarily Coalition Support Fund (CSF) and other military services - account for more than one-third of the country's total services exports. This is substantially higher than the share of government services of only 2 to 3 percent in the world trade in services. Given the non-economic and one off nature of government services, the high share does not bode well for long-term stability of export receipts. Incidentally, flows under CSF dropped drastically in FY16, the central Bank elaborated.

'The current level of Pakistan's services exports does not reflect the country's true potential. Concerted efforts are needed to facilitate services exports by strengthening the regulatory framework; well-thought liberalisation of trade in services; investment in human resource development (especially in education and training for select services); improving access to finance for service-oriented industries; encouraging the private sector to form services coalitions and enterprise networks; promoting specialization in financial services; and improving data availability', SBP suggested.

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Non-CSF government services exports have recorded a sizable growth over the last two years; if this trend continues, it may cushion any further fall in FX receipts under CSF. The export of commercial services, which is obtained by adjusting overall export of services for government services, has remained almost flat at $ 3.4 billion since FY11.

These were only 1.2 percent of GDP in FY16, which is far below the global average level of 6.0 percent of world GDP. These exports are concentrated in transport, Information Communication Technology (ICT), travel, and business segments. These four (out of 11 major categories) have a combined share of more than 90 percent in overall export of commercial services.

ICT services exports, which continued to increase up to FY13, have stagnated since then.

This stagnation is largely stemming from telecommunication services, as revenues from foreign network operators (for calls that originate from outside Pakistan) are declining. This drop has come about as internet-based messaging and voice services, like Skype, Viber and Whatsapp, have gained tremendous traction locally. However, the negative impact was largely offset by the growing export of computer services. Exports of both software consultation services and of computer software, have maintained an upward trajectory since FY06.
Riaz Haq said…
#Modi's Hawkish #Hindu Nationalist #Indian Minister Rajnath wants to break #Pakistan in 10 parts. http://ecoti.in/bnqceb via @economictimes

Home Minister Rajnath Singh today slammed Pakistan for its continuous support to terrorists and ceasefire violations and warned that it will break into 10 parts if it persists with its current policy.

Till now Pakistan got divided into two parts but if it won't mend its way, perhaps it will break into 10 parts, Rajnath Singh said here today.

However, he added, India will have no hand in that.

"India is the only country that never wanted to occupy a ..

Read more at:
http://economictimes.indiatimes.com/articleshow/55923101.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Riaz Haq said…
#China’s #Pakistan project: a geopolitical game-changer. #CPEC #eurasia #India #OBOR https://goo.gl/MBNaAj via @east_asia_forum

David Brewster, ANU

China’s One Belt One Road (OBOR) initiative is carving out new pathways across the Eurasian continent, signifying Beijing’s ambitions to remake the world around it. This project, if implemented, will fundamentally change China’s role and relationships in South Asia, perhaps in some ways that are not intended.

In the Indian Ocean region, OBOR has two aspects. One is the Maritime Silk Road, a series of linked port projects aimed at facilitating trade and new production chains linked with China by sea. The other is a series of planned north–south pathways from China to the Indian Ocean, including the China–Pakistan Economic Corridor (CPEC) and the Bangladesh–China–India–Myanmar Economic Corridor. These projects come with huge price tags and would involve the construction of roads, railways, pipelines and other major infrastructure in corridors stretching for hundreds and even thousands of kilometres.

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But these new overland pathways also have the potential to fundamentally alter China’s role in South Asia and the entire strategic make-up of the region. Geopolitically, South Asia has long functioned more or less as an island rather than as part of a bigger continent. Any overland connections that South Asia has with the rest of the continent are, at best, tenuous and excepting a tiny proportion of trade that is carried overland to and from Eurasia, essentially all of South Asia’s connections with the rest of the world are by sea or air.

These geographic constraints have had considerable political, economic and strategic consequences for the region. One is in underpinning India’s role as South Asia’s predominant power. The relative lack of landward connections into the Eurasian continent also amplifies the importance of control over the maritime trade routes across the northern Indian Ocean.

Geography has also caused Eurasian states, such as China, to have very limited contact with their South Asian neighbours. Sitting on the other side of the Himalayas, China may as well have been on the other side of the world. While it has been a strategic player in South Asia for some time, it has been from far away. China’s virtual remoteness allowed it to keep its hands clean of domestic political and security problems, even while it provided substantial military and diplomatic support to the Pakistani government. This has helped China to project itself as a benevolent partner that does not ‘meddle’ in internal affairs.

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Pakistan has sought to address CPEC security risks by forming a special army corps of 12,000 personnel devoted to protecting the project. But, at least until recently, China has been surprisingly sanguine about these risks and its ability to rely on the Pakistan Army.

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In August 2016, in a national Independence Day speech, Indian Prime Minister Modi sent a clear message that India may begin to publicly support Balochistan’s separatist insurgents. This represents a big shift for India and was directed almost as much at Beijing as at Islamabad. A senior and well-connected Chinese scholar responded that China will have ‘to get involved’ if India seeks to disrupt the CPEC. On 21 September, in the wake of the deterioration in Indo–Pakistan relations over Kashmir, Chinese Premier Li Keqiang publicly warned his civilian Pakistani counterpart, Nawaz Sharif, that he ‘hoped’ Pakistan can continue to provide safety protection to the program construction and Chinese personnel in Pakistan. These may well be the opening moves to a whole new strategic dynamic in South Asia driven by China’s great OBOR ambitions.
Riaz Haq said…
#Pakistan Turns to #China in #Energy Binge With $21 Billion Investment. #Electricity #CPEC http://www.wsj.com/articles/pakistan-turns-to-china-in-energy-binge-1482062404 … via @WSJ


More than 10,000 Chinese workers are now building at least 10 partly Beijing-financed energy projects across Pakistan that are set to grow the country’s energy output by 60% within two years in the first major boost to supply in two decades.Mr. Sharif’s government plans to inaugurate a nuclear plant this month and a pipeline network in January that will carry large-scale gas imports upcountry.


“Never in the history of Pakistan has there been such a big package of electricity plants in the pipeline,” said Syed Akhtar Ali, in charge of energy at the Planning Commission, the ministry tasked with long-term development.

Mr. Sharif’s promise to solve the electricity crisis propelled him to office at a time when the energy deficit was knocking some 2 percentage points off growth, economists say, stifling industry and leaving school children to study by candlelight.

Pakistan’s economic growth has risen to almost 5% annually under Mr. Sharif’ and his government set a 7% target for the years ahead. That, his government hopes, will boost the moribund private sector, reduce unemployment and provide youth with more alternatives to extremism.

The energy plan is a centerpiece of that economic aspiration. Mr. Sharif is racing to fulfill his pledge and become the first incumbent to be re-elected in a country whose voters—or the interventionist military—have long ousted its leaders for their poor performance. Mr. Sharif, who led Pakistan twice before in the 1990s, hasn’t previously even completed a term in office.

“Electric power is going to be the swing factor in the election,” said Shahid Khaqan Abbasi, the minister for petroleum. “If we don’t deliver on power, we won’t be seen as having delivered.”

Mr. Sharif’s plan depends heavily on ​China, which​ is translating its long-term strategic ties with Pakistan into an economic partnership, part of a broader infrastructure push across Eurasia. China is financing many plants as commercial investments. But to expedite projects, the Pakistani government is funding ​some​ power stations in the run up to the election, including three gas-fired plants in Mr. Sharif’s home province of Punjab. The eventual aim is to more than double Pakistan’s current output of around 16,000 megawatts.

By comparison, Washington’s multibillion-dollar civilian aid program for Pakistan has been far less ambitious, adding 1,000 megawatts to the country’s power generation in recent years by enhancing existing power stations.

The plan is to add 10,000 megawatts of the new China-backed infrastructure, a mixture of coal, gas and hydro electricity, by early 2018, months before elections, at a cost of $21 billion. The schedule is tight. The massive amounts of natural gas and coal needed for the plants require an extensive delivery system of ports, pipelines and railways. The country also needs to upgrade its power distribution network to be able to carry the extra electricity.


“My concern is that gaps in longer term planning, including much needed structural, regulatory and market reforms, will once again fall by the wayside in the euphoria of having achieved a temporary electricity supply surplus,” said Jamil Masud, a partner at Hagler Bailly Pakistan, an energy consultancy,

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At Karachi’s Port Qasim, a $2 billion coal-fired plant is taking shape. After only 1.5 years under construction, one 400-foot high cooling tower is up and the second is almost complete. The hulking metal frames for the boilers are in place and a jetty for imported coal is taking shape. Around 4,000 people work on the site, 24 hours a day—half of them Chinese workers who aren’t allowed to step outside its boundary.

On the other side of the port, a massive tanker ship serves as a terminal for liquefied natural gas imports, which are piped across Pakistan. Three more terminals are planned by the government.
Riaz Haq said…
#Russia throws its weight behind #CPEC, #China-#Pakistan corridor, keeps #India on tenterhooks http://toi.in/eJCcoa via @timesofindia

Russia's nebulous public position on its growing ties with Pakistan continues to give sleepless nights to Indian policymakers who have sought to isolate Islamabad on the issue of terrorism.
After it officially denied reports that it had shown any interest in China-Pakistan Economic Corridor (CPEC), Moscow has not just declared strong support for the China-funded project but also announced its intention to link its own Eurasian Economic Union project with CPEC.
CPEC, which will link Gwadar in Pakistan's restive Balochistan province to Xinjiang in China, remains a major bugbear for Indian foreign policy as it passes through the Gilgit-Baltistan region in Pakistan occupied Kashmir (Pok) claimed by India. Beijing has shown scant regard for India's concerns despite PM Narendra Modi himself having taken up the issue of Chinese involvement in the disputed territory with President Xi Jinping.
Moscow last month emphatically denied Pakistan media reports that it was looking to involve itself in CPEC by acquiring access to the port built by China at Gwadar. Russia's ambassador to Pakistan Alexey Y Dedov has now been quoted as saying that Russia and Pakistan have held discussions to merge Moscow's Eurasian Economic Union project with the CPEC.
Dedov said Russia "strongly" supported CPEC as it was important for Pakistan's economy and also regional connectivity.
The mixed signals emanating from Moscow, as strategic affairs expert Brahma Chellaney said, are injecting uncertainty in the direction of the Russia-India relationship whose trajectory long epitomized constancy and stability.

"It is as if Moscow no longer sees India as a reliable friend or partner. Indeed, by seeking common cause with India's regional adversaries — including by supporting the China-Pakistan Economic Corridor through internationally disputed territory and engaging with the Pakistan-backed Taliban — Russia is challenging India's core interests," said Chellaney.

India continues to officially maintain that it doesn't see any "downward trend" in relations with Russia even as it works behind the scenes to convince Moscow that Pakistan remained the fountainhead of terrorism in the region. For India though, Russia further queered the situation in Afghanistan by declaring that it regarded Afghan Taliban as a national military-political movement. Russia is looking to engage the Taliban apparently to defeat IS but, as the MEA spokesperson warned last week, India wants any engagement with Taliban to respect the internationally recognized red lines, including giving up violence and severing ties with al-Qaida.
The comments made by Dedov are only the latest in a series of Russian doublespeak on Pakistan this year. As it officially conveyed to Moscow, India was disturbed by Russia's decision to hold its first ever joint military exercise with Pakistan days after Uri terror strike which left 19 Indian soldiers dead. The Russians justified it by saying that the exercise was meant to help Pakistan deal with terrorism

At the Brics Goa summit in October, Russia chose not to help India publicly name Pakistan based terrorist outfits like Lashkar and Jaish in the official declaration in the face of Chinese resistance.
Russia continues to insist that its ties with Pakistan will not come at India's cost. Asked about the Russia-Pakistan military exercise though, at the recent Heart of Asia conference, Russia's presidential envoy to Pakistan Zamir Kabulov said Moscow didn't complain about India's close cooperation with the US and so India also shouldn't complain about "much low level" of cooperation between Russia and Pakistan. India may or may not complain, but it's certainly watching with eyes wide open.

Riaz Haq said…
#Pakistan #Railway track upgrade to include overpasses, underpasses & grade separation for high-speed trains #CPEC https://www.geo.tv/latest/124093-Railway-tracks-to-be-made-gate-free-and-signal-free-under-CPEC …

LAHORE: Railway tracks from Karachi to Peshawar will be made gate-free and signal-free under the next phase of the China-Pakistan Economic Corridor (CPEC), Geo News reported, citing sources.

A fence would be built around the tracks, similar to Motorway, and an underpass or overheard bridge would be built at every gate on the tracks, the sources said.

Work on the project would be initiated from January. The first phase of the project would focus on railway tracks between Rawalpindi and Peshawar.

The signaling system in Pakistan Railways will also be upgraded under the project.

According to the sources, the purpose behind making railway tracks gate-free and signal-free is to make train journeys safer and faster for the public. The fencing and bridges would also lead to a reduction in accidents.

Once the project is completed, the tracks would be able to accommodate high-speed trains. The railways authorities have completed the planning for the project, the sources added.
Riaz Haq said…
#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

Acting Chinese Ambassador to Pakistan, Zhao Lijian Monday said that his country would set up a large steel factory at Gwadar to further expedite economic developments being carried out under China-Pakistan Economic Corridor (CPEC) framework.
“Both China and Pakistan would very soon sign an agreement to establish the steel factory, three times bigger than the free economic zone being set up in Gwadar city,” he made this announcement while addressing participants of a day-long conference on CPEC: Potential and Prospects organized by Strategic Vision Institute (SVI) here.
He said, industrial cooperation was the forth pillar of CPEC initiative and both the country would discuss it in the next meeting of Joint Cooperation Committee (JCC) of CPEC to be held in Beijing this month.
“After completion of energy projects, transport infrastructure and development of Gwadar Port, industrial cooperation between China and Pakistan will be the main topic at the next JCC,” he added.
Zhao Lijian informed that China was working a lot for the development of Gwadar Port which was built with the Chinese government’s assistance.
He said, after completion, the port was handed over to Singapore but there was no improvement even after passage of five years.
Finally, it was given to the Chinese government by Pakistan government and the port was made functional and a ship carrying Chinese goods left for Africa.
He said, a business centre, hostel for different companies, fisheries processing plant with cold storage facility had been established in the free economic zone spread over around nine kilometers.
About Gwadar airport up-gradation, he said, the new international airport would have landing facility for all the modern aircraft including A-380 Airbus after completion, adding, prior to the up-gradation only C-130 or propeller-planes could land at the old airport.
The Acting Chinese Ambassador said, a 150-bed hospital was being built for the treatment of local people while a vocational institute had been set up for imparting training of different skills especially for the fishermen.
Talking about different energy project being completed under CPEC initiative in different parts of Pakistan, he particularly mentioned about the coal-based power plants which were being built in accordance with environmental standard set by the World Bank (WB) and other concerned international organizations.
He said, China produces around 60 percent of its total power generation through coal based power stations using modern and state of the art technology.
“The environmental concerns will be taken into consideration during the completion of these power stations,” he added.
Zhao Lijian pointed out hydro power plant, coal based power plants, wind power plants and solar based power plants were being set up to meet the electricity shortage in Pakistan.
He informed that the Karot Power Plant was being financed by the Silk Bank established by the Chinese government.
The groundbraking of Suki Kinari, Kohala Hydro Power Project would be held early next year, he said and added, Sahiwal Power Plant and Port Qasim Power Plant would be completed by next June and December respectively.
He said, a power plant set up at Thar coal site would also be inaugurated in next June.
He said, HUBCO power plant, one of the biggest coal-based power plant, would provide constant and stable power supply throughout the year.
Riaz Haq said…
#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

The Acting Chinese Ambassador said, the 50MW wind power plants and the 100-MW solar power plant set up at Balochistan would boost the power production and hoped there would be no loadshedding in Pakistan after completion of all energy projects.
Giving overview of transport infrastructure projects, he said, the Multan-Sukkur section of Peshawar-Karachi motorway would be completed at a cost of US$ 2.8 billion.
He pointed out that no other country was ready to support this project because of being less populated and having less-transport.
China came forward to build this project on Built-Operate-Transfer (BOT) basis in three years.
He said, KKH Phase-II would be completed at a cost of US$ 1.3 billion, adding, its Phase-I had already been completed while Phase-III would soon be planned.
About railways upgradation, he said, after completion of dual tracks, speed of trains could be enhanced upto 160 km per hours.
Speaking on the occasion, Chairman, Parliamentary Committee on CPEC, Senator Mushahid Hussain Sayed said, the CPEC initiative would be beneficial for not only Pakistan and China but also the South Asia and regions beyond.
He said, at a time when nobody was coming forward to help Pakistan, China extended support and confidence to its time-tested friend.
He informed that the land route of CPEC would connect 65 countries through Pakistan’s Gwadar port.
He said, China’s cooperation in energy sector, transport infrastructure development including railways upgradation, Gwadar port, development of Thar coal, Karachi-Peshawar motorway, employment to 10,000 Pakistanis and early harvest projects under CPEC had given a new impetus to economic growth.
“These projects have not only pushed Pakistan economic revival but also help integrate different parts of our country,” he added.
Mushahid opined that importance of Shanghai Cooperation Organization (SCO) had increased manifold for regional cooperation and after India’s stubborn attitude regarding South Asian Association of Regional Cooperation (SAARC).
In his welcome address, President, SVI, Dr. Zafar Iqbal Cheema said that the CPEC was not only a game changer for South Asia but also for Central Asia and regions beyond.
He said, CPEC would have global implications over the time, adding, it would promote trade and economic activities in the entire region.
Riaz Haq said…
#Pakistan gets additional $1 bn in #Chinese financing for roads, bringing #CPEC to $55 billion so far. http://reut.rs/2hkqJ7f via @Reuters

Dec 27 Pakistan expects to secure soft loans from China of about $1 billion this week for three road projects in the China-Pakistan Economic Corridor (CPEC), a Pakistani official said on Tuesday.

The roads lie on the western route of CPEC, a $55 billion network of roads, rail links, power plants and other infrastructure connecting western China to Pakistan's southern port of Gwadar.

They include roads from Raikot to Thakot, Yarik to Zhob and from Basima to Khuzdar, Ashraf Zaman, spokesman for Pakistan's National Highway Authority (NHA) told Reuters.

Zaman said a deal was reached with the Chinese to finance the three additional roads in November.

"Hopefully, agreement will be signed between the two countries in this regard in China-Pakistan Joint Cooperation Committee (JCC) meeting to be held on Dec. 29 in Beijing," he said.
Riaz Haq said…
#Russia's tilt towards #Pakistan will be a body blow for #India's security. #China #Afghanistan http://www.dailyo.in/politics/isis-india-pak-ties-russia-pakistan-afghanistan-ties-cpec-china-taliban/story/1/14918.html … via @dailyo_

At a high-level meeting held in Moscow on December 27, 2016, representatives from Russia, China and Pakistan underlined the growing influence of the Islamic State of Iraq and Syria (ISIS) in Afghanistan and the deteriorating security situation in the region.

According to the statement issued at the end of the meeting: "The Russian Federation and the People's Republic of China as the UN Security Council permanent members confirmed their flexible approach to delisting Afghan individuals from the UN sanctions lists as their contribution to the efforts aimed at launching peaceful dialogue between Kabul and Taliban."

What has surprised everyone is the exclusion of Afghanistan from the negotiations, apparently aimed at discussing the security situation in conflict-ridden Afghanistan. This trilateral initiative stands in open contrast to the publicly-stated positions of all the countries of supporting the Afghan-owned and Afghan-led reconciliation process. Sensing the mounting Afghan opposition, the group has finally decided to include Afghanistan in the next meeting. While Iran is soon going to be part of the group, there is no proposal to involve India.

Much to India's disappointment, the emerging axis between Moscow, Islamabad and Beijing seems to have put Pakistan in the driver's seat, according it greater control over the future of Afghanistan.

Russia's diplomatic efforts to accommodate the Taliban as an instrument against the ISIS, in tandem with Pakistan and China, may also have unexpected ramifications for Indo-Russian ties. The Indian leadership, both publicly and behind diplomatic corridors, has been trying to convince Russia that Pakistan is the fountainhead of terrorism in the region. But India's traditional ally Russia is not convinced.

Even though Russia' diplomatic engagement with the Taliban has begun to strain Moscow-Kabul ties, as well as put Russia's historic and strategic partnership with India at great risk, Moscow's engagement with the Taliban is driven by a number of counterterrorism and security reasons.

Russian foreign policymakers believe that engagement with the Taliban is essential for maintaining long-term political stability in Afghanistan; Moscow can use the Taliban's opposition to Islamic State (ISIS) to further Russia's counter-terrorism objectives; and Pakistan's role is crucial in bringing peace to war-torn Afghanistan.

The Russian leadership views the Taliban as a useful partner in its fight against the ISIS. Putin has long worried about jihadists from former Soviet republics joining the ISIS' fight in Syria. For this very reason, Russia sees ISIS as a particular threat in a way it doesn't see Taliban.
Riaz Haq said…
#China makes worldwide ports' investments as great maritime power. #CPEC #Gwadar #Pakistan https://ig.ft.com/sites/china-ports … … via @F

Pakistan’s Arabian Sea port of Gwadar is perched on the world’s energy jugular. Sea lanes nearby carry most of China’s oil imports; any disruption could choke the world’s second-largest economy.

Owned, financed and built by China, Gwadar occupies a strategic location. Yet Islamabad and Beijing for years denied any military plans for the harbour, insisting it was a purely commercial project to boost trade. Now the mask is slipping.

“As Gwadar becomes more active as a port, Chinese traffic both commercial and naval will grow to this region,” says a senior foreign ministry official in Islamabad. “There are no plans for a permanent Chinese naval base. But the relationship is stretching out to the sea.”

Gwadar is part of a much bigger ambition, driven by President Xi Jinping, for China to become a maritime superpower. An FT investigation reveals how far Beijing has already come in achieving that objective over the past six years.

Investments into a vast network of harbours across the globe have made Chinese port operators the world leaders. Its shipping companies carry more cargo than those of any other nation — five of the top 10 container ports in the world are in mainland China with another in Hong Kong. Its coastguard has the globe’s largest maritime law enforcement fleet, its navy is the world’s fastest growing among major powers and its fishing armada numbers some 200,000 seagoing vessels.

The emergence of China as a maritime superpower is set to challenge a US command of the seas that has underwritten a crucial element of Pax Americana, the relative period of peace enjoyed in the west since the second world war. As US President-elect Donald Trump prepares to take power, strategic tensions between China and the US are already evident in the South China Sea, where Beijing has pledged to enforce its claim to disputed islands and atolls. Rex Tillerson, the Trump nominee for US secretary of state, said on Wednesday that Washington should block Beijing’s access to the islands. Relations were also dented over Mr Trump’s warm overtures toward Taiwan, which China regards as a breakaway province.

China understands maritime influence in the same way as Alfred Thayer Mahan, the 19th century American strategist. “Control of the sea,” Mr Mahan wrote, “by maritime commerce and naval supremacy, means predominant influence in the world; because, however great the wealth of the land, nothing facilitates the necessary exchanges as does the sea.”

Drummed into military service

The Gwadar template, where Beijing used its commercial know-how and financial muscle to secure ownership over a strategic trading base, only to enlist it later into military service, has been replicated in other key locations.

In Sri Lanka, Greece and Djibouti in the Horn of Africa, Chinese investment in civilian ports has been followed by deployments or visits of People’s Liberation Army Navy vessels and in some cases announcements of longer term military contingencies.

“There is an inherent duality in the facilities that China is establishing in foreign ports, which are ostensibly commercial but quickly upgradeable to carry out essential military missions,” says Abhijit Singh, senior fellow at the Observer Research Foundation in New Delhi. “They are great for the soft projection of hard power.”

Data compiled or commissioned by the Financial Times from third-party sources show the extent of China’s dominance in most maritime domains.

Riaz Haq said…
#India must join #China #Pakistan One Belt, One Road #CPEC initiative to stay in the game via @htTweets

http://www.hindustantimes.com/columns/india-must-involve-itself-in-the-china-pakistan-one-belt-one-road-initiative-to-stay-in-the-game/story-uTtxhRzcn8iCnUHsB91haJ.html

The recently held strategic dialogue between India and China provides a useful reality check on the state of the play. Over the past year, the relationship had reached an impasse owing to China’s unwillingness to support India’s entry into the Nuclear Suppliers’ Group and to allow Masood Azhar of Jaish-e-Mohammed to be placed on the United Nations Security Council’s terror list.

In both cases India had insisted that these were litmus tests of its ties with China. New Delhi’s stance stemmed from an under-estimation of the growing importance of Pakistan to China and from an over-estimation of its own clout. If the former underscored the inability of the government to get the measure of China-Pakistan convergence, the latter flowed from the curious belief that international influence was mostly about talking ourselves up.

-------------

The prospect of a trade war sparked off by Trump’s imposition of tariffs is surely a major cause for concern to the Chinese leadership. But they also know that United States does not hold all the chips. For one thing, China can retaliate against American exports on a range of things from aircraft to soya bean. More importantly, American tariffs will undercut global value chains and the accompanying deep integration of regulatory systems — commercial laws, taxation, intellectual property rights — fostered assiduously by the US in the past.

While this will hurt China in the short run, it also provided Beijing an opening to reorient economic integration in Asia under its leadership and on more congenial terms.

The collapse of the Trans-Pacific Partnership and the rolling out of the One Belt, One Road (OBOR) initiative have already provided Beijing the perfect setting in which to pursue a more ambitious agenda of Asian connectivity and integration. Chinese economists have also mooted ideas to channel a greater portion of Asian savings into investments in Asia — instead of persisting with the current pattern of effectively sending those savings to the US and allowing American banks and financial institutions to reinvest them in Asia. All this will take time and enormous effort, but the Chinese are well poised.

Politically, too, Beijing will stand to gain from Trump’s attitude towards longstanding partners in Asia. If an ally like Australia — which stood by the US even during the Vietnam War — came in for rough treatment, what are the odds that others are going to have smooth relationship with the Trump administration? To be sure, many of these countries will continue to be concerned about China but the emergence of countervailing coalitions may become difficult.

Unlike Beijing, New Delhi does not have many cards to play. Despite repeated expressions of interest, India’s record in fostering economic integration even in the subcontinent is underwhelming. Further, New Delhi has firmly refused to sign up to the Chinese OBOR initiative. The two sides did, however, discuss the possibility of cooperating on developmental activities in Afghanistan. Again, while this is welcome, New Delhi should recognise that Beijing does not really need to work with it in Afghanistan.
Riaz Haq said…
A caitionary tale of #Pakistan's trade with #Kyrgyzystan in #CentralAsia. #Karachi #Bishkek #China #Afghanistan https://www.geo.tv/latest/134951-From-Karachi-to-Kyrgyz-a-made-in-Pakistan-story …

What connection does Naryn, a remote sparsely-populated mountain town in the Kyrgyz Republic, have with Karachi?

Located at a five-hour drive from the capital Bishkek, the sleepy town with a population of under 35,000, looks nothing like Pakistan. Other than the recently inaugurated campus of the University of Central Asia, even Google won't give you anything special about Naryn.

But Karachi-born Syed Mahir Shehzad has left his mark on the picturesque Central Asian mountain town.

From classrooms to the library, student dormitories to faculty and staff residences, Shehzad's Karachi-based office d├ęcor company has supplied every piece of high-end furniture at the 13,927 square metre UCA campus—almost all of it made in Pakistan.

"It was challenging for us not just in the sense that we had to compete with leading European companies, we—or pretty much any furniture company in Pakistan—had never exported to Kyrgyzstan," says the 36-year-old owner of Dimensions, which manufactures and assembles state-of-the-art modern office furniture competing with some of the leading brands in the world.

"We sourced some of our material from China, Malaysia and Indonesia, but a majority of it was assembled and manufactured in Pakistan, which we then mostly exported via trucks through the Pak-China border at Sust and then onwards to Naryn."

Owing to vast amounts of natural resources underexploited during the Soviet era, the five CACs –Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – make Central Asia a US$339-billion, 68 million-strong economy with varying levels of purchasing power and a largely untapped market.

But trade with Central Asian countries amounts to only a fraction of Pakistan’s dwindling exports, recorded at $26 billion in 2015.

----

Because of the uncertain security situation, Shehzad chose not to take the Pak-Afghan route.

"When we first got the project last year, we had no idea how we would export our goods to Kyrgyzstan. These are countries that we had never even thought of visiting, let alone export to. We faced a lot of trouble in even finding a logistics company that could transport our goods there," says Shehzad.

While Central Asia is becoming an increasingly important region, connecting Europe to South and West Asia, it can also be a challenging region for many new-to-the-market traders and investors.

Customs clearance in Central Asia is often said to be overburdened, with bureaucratic obstacles, arbitrary seizures of goods, excessive documentation, and a lack of proper protocols leading to significant delays.

With little support or guidance from the government authorities, Pakistani exporters face the same hurdles in reaching this largely untapped virgin territory.

"There was a lot of documentation. Our first containers got stuck in China shortly after crossing the Sust border. With only weeks to go for the launch of the campus, I had to wait for almost three weeks in Bishkek to face the nervous clients, before our transporter somehow managed to clear the trucks and bring them to Kyrgyzstan," says Shehzad.

Fortunately, after the first consignment, Shehzad says it took only five days for the rest of the trucks to reach Naryn from Karachi. "We were just ecstatic when the first trucks finally reached. From there on, it was just a matter of time. Even our clients were extremely proud."

The strategic Central Asia region can be a key market for Pakistani products, with lower labour costs in Pakistan giving the country a competitive advantage over European manufacturers
Riaz Haq said…
#India & #Pakistan in 8-member #SCO a boon for regional stability, development. #China #Russia #SCOsummit @XHNews http://news.xinhuanet.com/english/2017-06/08/c_136349784.htm …

The Shanghai Cooperation Organization (SCO) will witness its first-ever expansion at the upcoming Kazakhstan summit.
The inclusion of India and Pakistan, both major countries in the region, demonstrates the organization's growing appeal.
Once New Delhi and Islamabad officially in, the eight-member bloc will then cover nearly half of the world's population and three-fifths of the Eurasian continent. Its role in promoting regional stability and prosperity would thus be greatly boosted.
Since its founding in 2001, the SCO has encountered numerous naysayers and critics who have questioned its motives, principles and development.
Yet the organization's steadfast commitments to peace and growth in some of the world's most volatile nations have remained unshaken over the years.
That's because the SCO countries have shared great needs to maintain peace and security in the region, and even greater needs to foster faster economic development. These common interests outweigh their differences in political systems, cultures, social textures and levels of economic development.
After India and Pakistan are admitted to the SCO, they will enjoy broader anti-terrorism intelligence sharing with other partners within the bloc.
A mature multilateral mechanism such as the SCO will also help the two countries strengthen their trust-building process and enable them to work together to combat their common enemy -- terrorism.
Moreover, the SCO could also serve as a platform to better promote their shared economic and trade development, especially cooperation under the Belt and Road Initiative.
"The SCO has never been just a security group from the beginning. The Belt and Road Initiative offers a timely and convenient framework for the SCO members to facilitate connectivity and ultimately, achieve free flows of goods, capital, service and technology," said Sheng Shiliang, a researcher at the Xinhua Center for World Affairs Studies.
Sun Zhuangzhi, secretary-general of the SCO Research Center affiliated to the Chinese Academy of Social Sciences (CASS), said "comprehensive cooperation at all levels as part of the regional integration process is unstoppable. India cannot keep itself from this general trend for too long, it will come and join in like this time, sooner or later."
The impressive performance of the SCO in the past 16 years deserves greater global confidence in its ability to dispel doubts and divergences.
As Chinese President Xi Jinping and other heads of state gather in Astana for the SCO summit on Thursday and Friday, the world can expect that the organization, by absorbing two major regional countries, can help promote regional unity in the quest for a more secure and prosperous future.

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