Pakistan’s traditional efforts to ally with US or Gulf states has given way to a greater focus on neighboring regions, although there remains much to be done with respect to the immediate neighborhood.

CPEC, among the other regional integration initiatives, appears to be a milestone for Pakistan’s foreign as well as economic policy formulation. Pakistan, at present, is focusing on different cooperative arrangements aiming to connect Pakistan and China with Central Asia, Middle East and Africa. If Pakistan is able to build its connectivity with its neighboring states and regions, it would boost efforts towards dynamic regional economic integration.

CPEC the flagship project of the One-Belt One-Road initiative (OBOR), and is central to Pakistan’s regional outlook. It will create linkages through its neighbourhood to the nearby regions, aiming to create an inter-connected and inter-dependent economic hub. CPEC is expected to be the most promising venture, which can revive Pakistan’s economy, while enhancing its relations with China, Russia, Central Asia States and possibly with Iran and Afghanistan. This corridor will integrate transport link between Kashgar in north-western China to Gwadar port on the Arabian Sea, in Pakistan, through network of roads, railways, industrial parks, energy units and pipelines with the investment of US $46 billion.

Pakistan is very enthusiastic about the project and is looking forward to the likely dividends of the different projects linked to CPEC, nonetheless, there are several issues and challenges related to the project, which need to be taken care of urgently so as to smoothly implement and complete the major projects efficiently. The main issue and challenge is not only the slow pace of progress on the execution of energy projects but also shelving of some projects and the impasse on the calculation of power tariffs. Furthermore, Chinese personnel are facing life threat and there is still deadlock over the finalisation of ToRs for the establishment of the Special Security Division. The other main issues or challenges are the scarcity of drinking water in Gwadar, the suspension of trade activity during winter season and proposed 140 KM diversion of KKH due to Construction Bhasha Dam.

Furthermore, power projects under CPEC domain are also being objected to on environmental and feasibility bases, since these projects are coal based and Pakistan’s hydropower, despite having capacity, remains underutilised. Tariff and loan repayments may also cause concerns, as the concessions as well as interest rate are not Pakistan friendly. The Pakistani side has not negotiated a favorable deal in these areas. There is also not much clarity regarding the transit fee. There appears to be ambiguity regarding the mechanism for the settlement of trade related issues and maritime disputes.

A number countries are showing interest to join CPEC, which would boost Gwadar port’s significance and enhance efforts towards regional integration. For instance, the Russian leadership showed willingness for Russia to join CPEC. This move came after Iran and Turkmenistan voicing their interests in Gwadar port for trade. After becoming a partner in the CPEC, both countries can enhance their cooperation in economic, defence and intelligence matters. It is possible that the agreement might be signed when President Vladimir Putin visits Pakistan in 2017.

It would be in the larger national as well as regional interest, if Pakistan were able to improve its relations with Afghanistan and Iran. Iran has already shown interest in becoming part of CPEC, and is likely to be included in the project at some stage. Improvement in Pakistan-India relations, which at present seems less likely, can spread the benefits of regional development in South Asia as well. China has already included Sri Lanka, Myanmar and Bangladesh in its OBOR projects and if India does not improve its relations with China and Pakistan, it may be left out of this grand project and its consequent benefits.

Besides CPEC, Pakistan is also working on other regional initiatives like Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline projects, Central Asia Regional Economic Cooperation (CAREC), Quadrilateral Traffic in Transit Agreement (QTTA) and it has also acceded to UN sponsored TIR Convention on transit framework, all of which would aid Pakistan in its efforts towards regional integration and development. In spite of these initiatives, Pakistan cannot get benefits from such projects until and unless, the development of basic infrastructure and the acquisitions of skills required for the new projects are ensured, along with increase in cross-border and inter-regional engagement between business communities.

These regional integration endeavors may particularly be hampered by non-state actors, such as Baloch separatists, Uyghur community, and extremist elements in Central Asian states. Genuine grievance of these communities must be addressed, along with initiation of economic activity in the respective areas to reduce the sense of alienation among them and to bring them into mainstream. Along with this, other threats to integration such as rising unemployment, extremist tendencies, deteriorating law and order situation and internal political issues should also be addressed. Pakistan must ensure equal dividends of regional projects, for all the provinces to create harmony alongside development.

Moreover, regional economic integration initiatives are likely to improve economic and communication linkages among China, Pakistan and the Eurasian countries while testifying the hypothesis that the economically strong states will have greater impact on other states than those with greater military and weaponry system. Interdependence and inter-connectivity would determine the future of states and regions. While maintaining old alliances, Pakistan should show strategic patience and focus on regional integration and develop new networks for geo-economic gains. Political capital should be invested on institutional viability and stability as it would lead to economic growth and will consolidate sustainable human development in the society.

Economic corridor, transit route and pipelines can become basic initiatives for not only promoting regional integration but also trans-regional cooperation. At present, world order revolves around partnership, and dynamic economic integration, it can be best explained in words of Henry Kissinger, “Order always requires a balance of restraint, force and legitimacy. In Asia, it must combine a balance of power with a concept of partnership… Wise statesmanship must try to find that balance.” Cooperation and investment in road and network building initiatives would create partnerships which would change the linkages that are prerequisite for regional integration and development.