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Economic corridor and a worried India

In a remarkable demonstration of national unity by all political parties, at the all party conference last week , it was unanimously decided a go ahead with the western alignment linking Gwadar to Khunjerab under the China-Pakistan Economic Corridor ( CPEC ). The role of the government and the political parties is commendable. This historic decision will yield for Pakistan economic uplift and shall position Pakistan to new levels of global influence and recognition.

The CPEC’s western alignment, from Gwadar to Khunjerab, covering a distance of around 2,653 km is the backbone of the project with tributaries/sub-alignments merging into it at different points providing equal connectivity to all parts of the country. Over 40% of the back bone alignment rests in Baluchistan covering a distance of around 1000km exposing to the world one of the most formidable terrain of Pakistan, whereas, over 25% of it rests in KP province covering a distance of over 600 km and much of the remaining zigzagging through the world’s most majestic mountains and plains in GB region.

One of the most significant aspects of the CPEC is the opening up of the whole of Baluchistan, from one end to another, to business and its un-hindered exposure and alignment with rest of the country through connectivity and equal business opportunity.

The other most significant part of the CPEC is the real commercialisation of Gwadar port. In the absence of CPEC the port is neither economically viable nor much of strategic importance. The earlier Gwadar Port Operation & Management contract awarded to a Singaporean company failed to deliver the agreed results as the business volume could not reach the required levels of profitability and the resulting contract defaults.

Both the opening up of Baluchistan to business and the commercialisation of Gwadar port with inroads into China and the surrounding region are understandably a source of major set back and much concern for vested interests and regional powers competing for hegemony in the region over land and sea.

Gwadar was purchased from the Sultanate of Muscat and Oman for US $3 million on 9 September 1958, after negotiations lasting for four years, thereby ending Oman-174-year rule over Gwadar. In a survey carried out by the Americans in the early 1950s, Gwadar was declared as a natural warm and deep water port. It is a hammerhead shaped peninsula protruding at the apex of the Arabian Sea and at the mouth of the Persian Gulf. It is just 180 nautical miles (nm) from the strategic Strait of Hormuz, 208nm from the port of Muscat, 405 nm and 76nm from the Irani ports of Bandar Abbas and Chahbahar, respectively. Ever since Gwadar under Pakistan, its port has been under focus of Pakistan. When President Nixon visited Pakistan in 1973, reportedly PM Bhutto sought the US help to construct a new port at Gwadar and offered the US Navy use of the facility. Nixon did not buy it presumably not to upset US great alignment with Iran in those times.

Perturbed with the consequence of the CPEC, India has accelerated its indulgence at Chahbahar port of Iran. Chahbahar port, located adjutant to Gwadar port, is a free trade zone port on the Makran coast of the Sistan and Baluchistan province of Iran inhabited overwhelmingly by Balochi-speaking Baloch linked largely to Hanafi Sunni faith. The Iran government is pursuing a multi billion railway project which will connect this port to CIS states and Afghanistan. India is helping develop this port which will give it access to the oil and gas resources in Iran and CIS states. India plans to build a 220km road from Afghanistan to this port. India and Iran are also discussing laying a gas pipe line from this port between the two countries along the bed of the Arabian Sea to bypass Pakistan. By doing all this India hopes to compete with China-Pakistan presence at Gwadar. But, Chahbahar is no comparison to Gwadar which is now in a different strategic league being part of the CPEC.

These two ports in the Arabian Sea, one in Iran and another in Pakistan, demonstrate an emerging contest for power in the Gulf and Arabian Sea. Up to now the Persian Gulf and the Strait of Hormuz is very much the uncontested domain of Iran while the Arabian Sea and the Indian Ocean much of India’s. Pakistan’s role and influence in the seas up to now has been passive. But, this balance will dramatically change once Gwadar becomes operative which strategically is best located at the entry point of the Persian Gulf and overlooking whole of the Arabian Sea and much of Indian Ocean. India and much of the region fears that its location will enable Pakistan to exercise control over world’s most vibrant energy routes and a facility to monitor naval activity in the Persian Gulf and the Arabian Sea.

India, in particular, is well aware of this threat to its expansion strategy and hegemony in the seas. India has signed up naval co-operation with the US to massively uplift its naval strength. It has set up a giant new $8 billion naval base at Karwar, south of Goa on India’s Arabian Coast – the first phase of which opened up in 2005. India feels encircled and checkmated on land and seas by the China-Pakistan alliance. All along its western border, at just a few hundred kilometres away, operates CPEC rattling the omni presence of China-Pakistan alliance extending all the way to the waters along its coast lines which makes its lands and shores exposed and venerable.

The CPEC is now all set to fly with the financing well lined up and its alignment approved by all stakeholders. Since most of the route is an upgrade of the existing road network in Pakistan, the cumbersome task of land acquisition and the politics and malpractices involved in the process is largely excluded from the project completion time lines. The project has the potential to proceed on fast track. Pakistan now needs to concentrate on implementation which is always a weak point in our state governance.

Although all the roads, rail and other infrastructure assets falling under the CPEC are paid for and fall under the Sovereignty of Pakistan and that the port of Gwadar has only been leased out to China as a service provider under a well-defined Operation and Management contract, the fact remains that the CPEC has two stakeholders – China and Pakistan. Both are severely and jointly committed to safeguarding the assets in which they have invested.

It is projected that China will lead the global economy by 2020 well ahead of the USA. With this comes the political muscles. No country or vested interest does have a chance for successes to mess around with China and Pakistan in their partnership of business without severely burning its finger. All attempts to derail the CPEC is an attempt in absolute futility and frustration. The CPEC is there to stay – a fact to which all must reconcile with and benefit from it.

Farhat Ali, "Economic corridor and a worried India," Business recorder. 2015-06-03.
Keywords: Economics , Economic issues , Economic policy , National unity , Economic Corridor , Real commercialisation , Trade zone port , Uncontested domain , National sovereignty , Global economy , Political muscles , Digital connectivity , Pakistan , China , India , Iran , USA , CPEC , CIS