Forecast
- --Issues with regionalism, security and implementation will ensure that the eastern corridor of CPEC infrastructure project is prioritized over the western corridor.
- --The nature of the obstacles the project must overcome means that progress will move forward in fits and starts.
- --Whatever the status of the CPEC, the relationship between China and Pakistan will strengthen, enhancing China's presence in South Asia.
Analysis
The partnership between Pakistan and China is one of the strongest in Asia. Pakistani Prime Minister Nawaz Sharif once said that his country's ties with Beijing are "higher than mountains" and "deeper than oceans." In May 2015, those sentiments were given form when Chinese president Xi Jinping, on his first visit to Pakistan, signed $28 billion worth of agreements as part of the proposed $46 billion China-Pakistan Economic Corridor.
The ambitious project, which when complete would link China with two Pakistani ports, faces an array of challenges. But if completed as planned, it will help stimulate Pakistani economic growth, particularly in its more impoverished western region. It would also further strengthen Chinese influence in the region and give it an export corridor to the Arabian Sea.
Foundations of the CPEC
The two branches of the China-Pakistan Economic Corridor (CPEC) consist of a network of roads, railways, energy pipelines and other infrastructure projects that will run from the city of Kashgar in China's western Xinjiang province through each of Pakistan's major cities before terminating at the Arabian Sea ports of Gwadar, near Iran, and Karachi, to the east. The initiative demonstrates the expansion of the already-deep partnership between the two nations. The CPEC, which, broadly speaking, is divided into eastern and western corridors running the length of Pakistan, fits into the Chinese trade diversification strategy dubbed the Belt and Road Initiative.
The project is vital to Pakistan's economic ambitions and could provide the basis for an economic boom. Estimates suggest that the country's current 4.5 percent annual growth rate could climb three percentage points if the country can overcome the energy supply problems plaguing the nation. Available electricity, for instance, falls short of peak demand by some 7,000 megawatts, leading to daily blackouts. Energy infrastructure investments associated with the CPEC are meant to ameliorate a portion of that shortfall. The CPEC can also help Pakistan achieve its goals of becoming a major regional energy hub connecting the Middle East, Central Asia, South Asia and China. The project would give China access to energy supply routes linking Central Asia with South Asia as well.
Notably, the United States has pursued this same objective for two decades, seeking to connect energy-abundant Central Asia to energy-deficient South Asia by promoting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. But its construction has languished under the enduring threat of militancy throughout Afghanistan and Pakistan. Beijing fears that the militancy could spill across its border gives it an incentive to stabilize the region, hence its investment in Pakistan.
CPEC constitutes the largest proposed investment package in Pakistan's history and is being branded as a solution for the country's economic problems, one that will create jobs, grow the economy and reform the energy sector. But unless Pakistan implements structural reforms - further democratizing the country, uprooting corruption, strengthening civilian institutions and bolstering the economy of its largest and poorest province, Balochistan - the effect of those benefits could be blunted.
Implementation Difficulties
While CPEC has been touted as a "game-changer" for Pakistan, Islamabad will need to overcome several problems standing in the way of its implementation. The first is regionalism. Rivalries among Pakistan's provinces of Punjab, Khyber Pakhtunkhwa (KPK), Sindh and Balochistan - each with its own strong cultural identities - have long stood in the way of forging an overarching national identity. In particular, Balochistan, the country's least-populous province, has long accused Punjab, the wealthiest and most populous province, of marginalizing its people. One grievance Balochis hold is that Punjabis expropriated the operations of the Gwadar port, which is being expanded under the CPEC, and delegated the port authority's administration, cutting Balochis out of the equation. (In November 2015, a Chinese firm signed a 43-year lease for the rights to operate the port.)
