CPEC Summit & Expo was held at the Pak-China Friendship center, Islamabad on 29-30th August, 2016. More than 200 CEOs of Chinese private companies attended the event. The purpose was to create mechanisms for efficient operations and effective implementation of programs or projects launched under CPEC initiative. A red carpet welcome was given to the Chinese guests. Prime Minister Nawaz Sharif spoke at the occasion. He said that CPEC isn’t limited to a ‘game-changer’ for Pakistan and China but rather serves as a ‘fate-changer’ for Asia and the world. CPEC’s economic importance intertwined with strategic value would prove as a strong endeavour to ensure peace and stability in Asia. CPEC is part of the OBOR initiative and that Pakistan seeks to establish units of cooperation, collaboration and coordination with countries interested in benefitting from utilization of CPEC-OBOR routes. The PM has given Ahsan Iqbal’s ministry of Planning, Reforms and Development the responsibility to oversee and manage the CPEC-based and projects and associated programs. On the 29th August, multiple yet different sessions were held to highlight Pakistani and Chinese Joint business opportunities in order to up-scale the programs/projects associated with CPEC plan. The sessions were: (i) Sharing the fruits of regional development (Chaired: Sartaj Aziz), (ii) China-Pakistan CEO’s forum, (iii) Parallel sessions under collective theme of ‘CPEC 2013-20: Business opportunities for Pakistan and China’ [a] Opportunities for Pakistani businesses under CPEC (Chaired by A Rauf Alam, President FPCCI and Ye Chengyin, GM-CRBC), [b] Business opportunities in energy and connectivity infrastructure (Chaired by Dr. Miftah Ismail, Chairman Board of Investment), [c] Business opportunities in Trade & Industry under CPEC (Chaired by Ehsan Malik, Chairman Pakistan Business Council), [d] Rejuvenating Old and creating new cities as centers of growth under CPEC (Chaired by Arif Hussain) and (iv) CPEC and the sub-regional socio-economic development in Pakistan (Chaired by Ishaq Dar, Federal Minister of Finance).
The level of interaction provided the necessary awareness and significant input from all the interested parties. The Government of Pakistan aimed to use the platform to celebrate third year since the inauguration. The event was to cater to joint ventures and trade deals aimed at enhancing Pakistan's capability in the fields of power generation, road infrastructure and airports; where the multi-faceted CPEC will take relations between two countries to new levels and bring about series of mutual, beneficial economic advantages. PM stated that in annals of International Relation’s, Sino-Pakistan relation is committed to each other irrespective of established norms of inter-state relations. Investment by major Chinese public and private sector enterprises in Pakistan comprises as largest foreign influx of foreign capital. Most projects are now in implementation and commissioning stages where by the level of Chinese investment will attract new avenues of trade and investment opportunities.
Minister Ahsan Iqbal emphasized the shared vision behind CPEC as part of liberalisation, advances in communication and transport infrastructure, and creation of cross-border supply chains. The centre of gravity is shifting to the East with emerging economies developing, rapidly. The shifts reflect changes in global governance i.e. the integration of global economy have enveloped all aspects of trade, service and movement of capital. Pakistan’s vision 2025 seeks to position itself from a lower middle income country to high middle income country by achieving the target per capita of US $ 4,200. This is supported by CPEC as mega project that will cater to the needs of federating units of Pakistan through proper rail and road network within the coming years. Regional cooperation agreements have proliferated and strengthened in recent times to capture this change especially in the global economic landscape. A week later after the CPEC Summit & Expo held in the Pak-China Friendship center (Islamabad), the Minister of Planning, Development and Reforms arranged an inter-university debate regarding CPEC, where brilliant minds among the youth participated to put forward recommendations regarding improvisation and viability of CPEC. The economic corridor will not only connect Pakistan and China, but will prove beneficial in connecting Pakistan with its neighbours on the western border.
Functioning of new corridor will open new vistas of prosperity as a result of which the national economy will grow fast, lead to creation of new job opportunities, poverty reduction, and development of transportation sector and boost industrial growth where by CPEC serves as a comprehensive package of cooperative initiatives and projects, which covers key areas including connectivity, information network infrastructure, energy cooperation, industries and industrial parks , agricultural development, poverty alleviation, tourism, financial cooperation as well as livelihood improvement including municipal infrastructure, education, public health and people-to-people communication. The experience gained through this mechanism will provide the element of required outcome or success needed to achieve regional peace, prosperity and stability. CPEC will serve as part of most important project in the national history. The efforts have been extended to include social sector development alongside energy, infrastructure and transport. The purpose is to uplift of socially backward or neglected areas. The framework includes establishment of industrial parks, creating employment opportunities and tourism. This will lead to closure of gaps and minimization of lapses. Pakistan remained entangled in geo-political alliances under security pretext where world powers exploited its geo-political importance. Obliterating socio-economic paradigm in favour of militarism rendered Pakistan as pocket-less and weak. Strategic geo-economic arrangements created new corridors which provide routes under ‘’One corridor-multiple passages’’. The corridor is divided into core area and radiation area, as per spatial development theories which indicate the levels, ranges and layout of construction and development of CPEC. The plan has spatial layout of ‘’One Belt, Three passages, Two Axes and Five functional zones.’’
CPEC is the seamless fusion of ‘’Development Vision-2025’’ of Pakistan and ‘’One Belt-One Road Vision’’ of China to promote marginalized and backward areas. For Pakistan, CPEC is realization of one of its seven pillars of growth related to regional connectivity in its development vision. CPEC is a life-time opportunity to improve socio-economic transformation. In the place of today’s rugged mountains and lifeless barren deserts; the emergence of modern infrastructures, SEZs, Health facilities and Universities will bring enduring benefit to the people of Pakistan. With Gwadar as pivot, the dividends of CPEC will be regarded across the entire rim of Indian Ocean. Gwadar is set to become a port worthy of its geo-political significance, transferring Pakistan into a prosperous state. CPEC envisages mesh of communication networks comprising of a world class deep sea port, commercial sea lines, an international airport, highways, railways, fiber optical. Pakistan aims to become the next Asian tiger as it lies in as heart in between three centres of economic growth: China, Central Asia and South Asia. CPEC would provide China to develop backward western parts and link the Silk route Economic Belts to the 21st Maritime Silk route. On the other hand, it will provide Southern and Western Asian Nations to trade with China through through shortest and economical route via Pakistan. With signing of MoUs, a large number of project under CPEC’s portfolio have been launched. Many amongst these are already in implementation phase while extensive planning is underway on all others. These projects range from short (2020) to medium (2025) and to long term (2030). There are a number of projects that will be completed by end of 2017 and early 2018 including few in 2020 as early harvest, actively promoted and priority projects.
The number and locations of the Economic Zones proposed to be set-up along each of these routes are mentioned as follows: Khyber Pakhtunkhwa (8), Punjab (7), Sindh (3) and Islamabad (1). Work on western route has been started on priority basis. The fiber optic cable is a very crucial component of CPEC. It will be installed to operate from GB to both, KP and Islamabad-Rawalpindi (SCO Headquarters). It will provide alternate connectivity for Pakistan and other related opportunities. Oil & Gas is an important component which was discussed under 5th JCC meeting as future area of cooperation. Railway is an integral part of CPEC as its expansion and upgradation of ML-I line from Peshawar to Karachi is being undertaken expected to be completed by 2018. This decision was done by JCC after approval by Joint Working Group of experts. Regarding the details of criteria; allocation and installation of energy projects along CPEC route, which constitutional body is decision-making authority? All energy projects are in IPP mode. These projects are not located along any corridor passage but are to source or load centre. Regardless of location, all power goes to the national grid. Regarding terms and conditions/ pre-requisites for establishment of industrial parks and trade zones along the corridor; the Joint Working Group will finalise the plan (which is yet to be set up). In the 5th JCC meeting, the Ministry of Planning, Development and Reforms shared 27 potential sites identified by Provincial Government. According to MoU from, the Planning Commission (PC) from Pakistan and National Development and Regulatory Commission (NDRC) from China are the lead agencies on respective sides. CPEC Secretariat has been established on either side where the capacity of Pakistan secretariat has been continuously enhanced to meet the requirement.
LNG pipelines from Gwadar to NawabShah is being planned for installation in the corridor. There is no other LNG project in the approved list of CPEC project portfolio. The transmission system of electricity in Pakistan was considered obsolete and led to huge losses, annually. In CPEC, US $300 million has been allocated to upgrade the system. Transmission line was included in the actively promoted energy projects list where details regarding utilization were published. It is included in the prioritized project from Matiari to Lahore and Faisalabad, respectively, for evacuation of power more efficiently and more reliability and redundancy through HDVC lines. This is Independent Transmission Commission (ITC) mode. Government of Pakistan is not liable to pay back loans and its business model is like IPP mode power plants. The early harvest phase of CPEC is worth around of US $46 Billion. There is a need to share details about the allocation of budget and share of federating units of the country in this phase since the taxpayers will pay for such project financing, eventually. The CPEC is a 15 year long-term plan to be completed in phases. To counter lack of environmental assessment study, all projects have been approved after Environment and Society Impact Studies (ESIA). That as part of CPEC is lying away from the road network but will provide indigenous coal supply chain chosen for power project. Its evacuated energy will be part of the national grid. Sitara Group of Companies has built an IPP based on coal-utilisation as source of energy. Faisalabad serves as major hub of services within different but through crucial sectors of development and economic growth. The industrial zones, infrastructural development and new private and public facilities will allow integration of CPEC’s M3-related chapter. Regarding KP’s concern to be worst sufferer ignores cheap hydropower in CPEC by focusing on costly fuel for electricity generation. Various hydel projects totaling more than 900 megawatts are being planned for KP under CPEC and Non-CPEC programs. All energy projects are in IPP mode. Federal government intends to employ he initiation of energy projects as per energy policy, which is open to all provinces/investors. Punjab and Sindh have the infrastructure for trade zones. Will KP and Balochistan benefit despite lack of proper infrastructure for Economic zones under CPEC? Joint Working Committee (JWC) shall finalise new industrial zones under CPEC FW formation. Board of Investment, BOI, in consultation with provincial governments is under process of finalising zones. All provinces are invited for representation as part of Industrial and Economic Zones meetings. Initiatives like FATA reforms endeavour to provide fairshare in CPEC. The elected governments in KP, Balochistan and GB are being consulted in development of Industrial and Economic zones. CPEC in totality relates to evolution of economic activities. Presently, CPEC relates to cooperation in energy, transport, infrastructure (road, railways, airports). Gwadar port and city project and industrial parks; which are serving as building blocks for economy. In long term, there are other fields of cooperation including agriculture, industries, tourism, HR development and financial cooperation etc. PC can only highlight those plan segments which are finalized by mutual agreement. The corridors start from north with single route. At Islamabad, it splits into three passages, viz, Western, Central and Eastern passage. Central and Eastern passage combine at Shahdad-kot and which in turn combine with western passage at Basima. To handle security of Chinese personnel working on all projects, Special Security Division has been raised.
Two main decisions were taken in the APC of May, 2015 i.e. Western route and formation of Parliamentary committee on CPEC. Work is progressing on both the actions of CPEC on and PC is having regular meetings and recently the committee visited and witnessed the progress on construction of Western route. Budget 2015-16 allocated funds for Eastern route.
Latest maps are available on: www.pc.gov.pk.
The spatial layout of ‘’One Belt, Three passages, Two Axes and Five functional Zones’’ is as follows:
· ‘’One Belt’’: Core area and economic cluster of industries, population and cities. This North West-South West strip passes through Khunjerab until it crosses Islamabad and Lahore to end up in Sukkur with extension of two routes heading for Karachi and Gwadar on the Arabian coast.
· ‘’Three passages’’ refer to east, west and west traffic passages in the core area from Islamabad to Karachi and Gwadar, respectively, each of which consists of seveal trunks and highways. The east passage consists of railway-highway NW from Islamabad to Karachi via Lahore, Faisalabad, Multan and, Sukkur and Hyderabad: the main traffic artery of the corridor. The central passage starts from Islamabad in the north to Karachi, via Darya Khan, Jacobabad, Khuzdar through N25 and Gwadar through M8. The West passage starts from Islamabad in the north and to Gwadar via D.I. Khan and to Gwadar via D.I. Khan, Quetta, Basima and Hoshab.
· ‘’Two Axes’’ refer to Two East-West development axes in CPEC that are vertical to main traffic arteries, i.e. Lahore-Islamabad-Peshawar and Karachi-Gwadar development axes. The economic development levels and geographical location conditions of the areas where the ‘’Two axes’’ are located differ greatly. They are key areas for strengthening of regional linkage and promotion of coordinated development of regions in the corridor construction.
· ‘’Five functional zones’’: The corridor is divided according to the regional development level, industrial structure, resource and environmental bearing capacity, and growth potential. These zones cover major node cities, traffic passages and industrial cluster areas. These are:
- Southern Xinjiang zone of industry, logistics and economic development (Kashgar, Atushi, Tumshuq, Khunjerab)
- North Pakistan zone of border logistic channel, resource exploration and ecological conservation (Islamabad-Khunjerab)
- Central Pakistan zone of industrial and economic development (Karachi-Sukkur-Multan-Islamabad-Lahore)
- Western Pakistan zone of logistic channel, mineral exploration and ecological conservation (Gwadar, Quetta and D.I. Khan)
- Southern Pakistan zone of energy, logistics, trade and business development (Gwadar-Karachi).