The game-changer

Amidst a deteriorating security situation, the acute energy crisis and a crumbling economy, Prime Minister Nawaz Sharif visited China and successfully concluded agreements for cooperation on crucial issues like energy and infrastructure development. China, like always, showed its commitment for cooperation and support for addressing the development needs of Pakistan.
Notwithstanding the fact that such diplomatic exchanges had been frequently conducted in the past as well; coupled with an enormous inflow of Chinese financial assistance, the recent visit must be viewed and analysed in the much broader framework of a changed global scenario. Both the countries weighed their own economic and strategic interests in a bid to define the gamut of Pak-China relations in the long run.
Pakistan’s relations with China have withheld the test of time primarily because there was no conflict of interests. Politically, Pakistan was among the first few countries that recognised the People’s Republic of China and consistently supported it in the United Nations on numerous issues like China’s human rights record or Taiwan.
It is said that the Sino-Pakistan Border Agreement of 1963 laid the foundations of friendship, and the moral and material support extended by China in the 1965 war with India further won the hearts of its people. Similarly China has always supported Pakistan’s stance on the Kashmir issue.
In addition to political cooperation, it was the economic interest – particularly trade – that inclined Pakistan towards China. For almost 20 years (1949-69) trade balance was in Pakistan’s favour, since China was a major export destination for its jute and cotton. All these years – and even afterwards – Pakistan received tremendous financial and technical assistance from China in developing its engineering, steel, textile and cement sectors, highways, mining, power generation, defence and, of late,telecommunications, although the efficiency with which this assistance in men and material was utilised needs serious consideration.
Pakistan is rich in natural resources and human capital. But years of mis-governance, corruption, weak fiscal policies, lack of research and outflow of capital led to a financially paralysed economy. So the important factor in determining the outcome of Pak-China cooperation this time is not the amount of assistance we get, rather how effectively we utilise it to meet our development goals.
Pakistan today stands on the lowest ladder of human development. Its growth is stagnant at three percent, foreign exchange reserves are at their lowest ($5 billion), investment has nosedived to 13 percent of GDP and the economy is faltering due to weak global demand. In this scenario, realigning relations with China seems to be in Pakistan’s foremost economic interest. China is leading the world in manufacturing and trade merchandise. Not only is it the largest holder of foreign exchange reserves, it is the largest creditor nation too.
Therefore, constructive cooperation with China can definitely help Pakistan revive its own economy. Notably, the existing free trade agreement (FTA) with China can be used as a springboard to enhance Pakistan’s trade volume and attract reliable foreign investment in future. Using China’s clout, Pakistan can explore tremendous opportunities of regional cooperation from the burgeoning Asia Pacific Economic Cooperation (Apec) and the Central Asia Regional Economic Cooperation (Carec) in the long run.
If economic interests figure prominently in Pakistan’s foreign policy with China this time, then it is the overwhelming political and strategic considerations that define China’s relations with Pakistan in an effort to establish a long-term, reliable supply of overseas resources and energy for its economy. China’s rapid economic growth along with the fast pace of urbanisation has fuelled a growing demand for energy.
Being the second largest consumer and importer of oil products after the US, China’s oil consumption growth accounted for half of the world’s oil consumption growth in 2011 according to the US Energy Information Administration (EIA) – and it is projected to increase manifold in future. With an eye on the future, China is investing massively in offshore oil resources in Iran, Central Asia, Myanmar and Africa.
That explains China’s willingness to invest in Pakistan’s energy and infrastructure. Pakistan’s strategic location vis-à-vis the Middle East and Central Asia – two oil-rich regions – is vital. The special importance of the Gwadar port in Balochistan as an energy corridor to import oil from the Middle East, Central Asia and large areas of the petroleum-exporting Persian Gulf cannot be overlooked by China.
Additionally it is also planning to develop Kashgar in the Xinjiang province by linking it to the Gwadar deep sea port with road and rail network. China is also interested in extending the Iran-Pakistan pipeline up to its border.
The aspirations and interests of the Chinese are clear. They also have the capability to realise them with their commitment, vision, expertise and resources. But are we, too, ready for the change? A project cannot be a ‘game-changer’, no matter how ambitious it may be, if the will and skill to execute it is lacking.
What can be a real game-changer is the way we manage our resources this time coupled with sincere leadership guided by vision and quest for innovative reforms.
The writer holds an LLM degree in international economic law from the University of Warwick. Email: beelam_ramzan@yahoo.com