In the wake of globalisation, economic integration and interconnection of markets has gained much impetus in the contemporary geopolitical landscape. It has evolved to become a vital ingredient of international economy. The past decades have seen a rise in regional integration blocs (with varying degrees of integration level) and these are still gathering pace thus prioritising connectivity on the global agenda.1
Connectivity, or the so-called interdependence, is not something new in the integration debate. Where on one hand an established self-reinforcing relationship between integrated geographic connectivity and economic productivity have necessitated upgradation of facilities for intra-border infrastructure; on the other hand the resurgence of interest in the subject has been accompanied by a substantial body of literature reviewing this phenomenon beyond the standard paradigm. Connectivity, whether regional or global, is a multifaceted phenomenon, where physical connectivity remains only one of its integral pillars.2 Beyond the confines of hard infrastructure, a higher degree of geographical lock-in hinges upon socioeconomic and political linkages that extend from joint commitment, cooperation and harmonisation to the creation of an enabling environment for single investment space.3
Hence where hard infrastructure remains the motor behind regional integration, the political and social dimensions remain the most important elements of sustainable connectivity. All this becomes more evident in the face of multiple incidences of failed growth within regional blocs owing to lagging soft infrastructure in terms of harmonised legislation and coordination on economic policies. The SAARC is one such bloc where the rivalries between the participating members have stunted its growth. Further, percep-tion management as an offshoot of soft connectivity broke down a strong geographically knitted regional model in the case of BREXIT. Moreover, the anti-globalisation rhetoric recently initiated by the US represents a few other symbolic blows to economic integration.4 In the face of these changing undercurrents, enhanced connectivity has become the focal node and knot of regional connections, hence shifting the balance towards the political and socioeconomic dimensions of collaboration at policy level.
CHINA – PAKISTAN ECONOMIC CORRIDOR: A NEW HEARTLAND
In the above backdrop, China – Pakistan Economic Corridor (CPEC) serves as an example of a relationship built on the idea of alignment of trade, connected past and shared trust. Having its roots in the rich time-tested friendship between Pakistan and China, it attempts to boost these ties to a greater degree of economic integration. The CPEC clearly reads as an audacious endeavour where the economic synergies and complementary incidence of interconnected needs between these participating countries will create room for sustainable economic cooperation. Moreover, the corridor places paramount importance on harnessing cultural and historical ties centring upon “people-to-people” connection. A number of Universities and centres are now involved in promotion of mutual understanding on cultures and languages of the two countries.5 Beyond a bilateral economic undertaking, the corridor is also expected to evolve as one of the far-reaching initiatives in modern history, triggering large-scale connectivity in the region and hence making an important contribution to integration of global economy.
A comprehensive 15-year investment programme, CPEC is an interconnected network of roads, railways and infrastructure projects. In addition, it also includes communication and information networks, energy projects, industrial parks and economic zones, among others. The planned investments in CPEC are currently valued at more than $60 billion.6 However, with the addition of new projects, this amount is likely to exceed that in the coming decades. Overall the project has been divided into three phases scheduled for completion by 2030. A sizeable portion of the investment project, around 64%, has been allocated to the energy sector, whereas 35% has been demarcated for infrastructure development. Fig. 1 shows the sectoral distribution of the investment package.
Fig. 1 Sector-Wise Investment Distribution of CPEC Project
Source: Ministry of Planning Development & Reform
Physical connectivity is an important element of CPEC and the history of such geographic connectivity between the two countries could be traced back to building of the Karakoram Highway7 that connected the northern region of Pakistan with the western region of China across the 15,000 feet high Khunjerab Pass in 1979.8 The construction of the highway, which took 27 years to build, is the most potent symbol of the close historic ties between the two economies. The CPEC furthers this cross-regional linkage, consolidating a new axis between the two allies. Starting from the border of China, the corridor runs all the way down to the south western port of Gwadar on the Arabian Sea. Fig. 2 shows the network of highways in Pakistan bisecting the length and breadth of the country towards Kashgar in the Xingjian province of China.9
Fig. 2 Highway Networks under CPEC
Source: Ministry of Planning Development & Reform
CPEC IN THE LARGER CONTEXT
When looked upon in isolation, CPEC serves to connect Pakistan and China. Nonetheless, the scope of the project is much broader than a bilateral economic undertaking. Pakistan does not only sit at the central node position between South Asia, Central Asia and the Middle East but also enjoys a pivotal position at the intersection of the Indian Ocean, energy-rich countries in the Middle East and Central Asia and some of the largest global economies in the world. The geostrategic position of the country continues to benefit it while CPEC is expected to spur much larger spillovers in terms of regional integration and economic growth.
The geo-economic imperative of Gwadar port in particular is crucial for under-standing the complete picture of this development initiative. Gwadar is the warm-water seaport positioned at a vital staging point in the Indian Ocean10; at a distance of 72 km from Iran, 320 km from Cape al-Hadd in Oman, 400 km from the Strait of Hormuz and in close proximity to the Persian Gulf.11 It opens the gateway to the Middle East and Africa in the west and South Asian countries in the east.12 Moreover, where both the straits of Hormuz and Malacca have been termed as major chokepoints regarding security and trade, Gwadar will not only plug the larger gaps between several maritime nations (to varying degrees depending on their geographical positioning), but will also serve as the catalyst to propel maritime security by providing an alternative crucial opening to the trade routes of the Indian Ocean.
Fig. 3 Pakistan’s Geostrategic Location
Source: Centre for Strategic and International Studies (2018)
Eurasia is one of the most dynamic regions globally. However, owing to the lagging hard and soft infrastructure, the numerous economic blocs in the region have failed to enhance inter-regional trade to their actual potential. The CPEC will address these much needed connectivity bottlenecks where the overland infrastructural connectivity under the corridor will provide one of the most economic archetypical regional transport chains.13
China is one of the world’s biggest oil importers. A total of 90 percent of the country’s oil imports pass through the Strait of Malacca. Gwadar will now provide a 3,000 km route to Kashgar compared to the 12,900 km route via Strait of Malacca to the eastern seaboard of China, shortening transit time by at least 26 days (see Fig. 4).14 Further, the landlocked Central Asian Republics (CARs), which had long been in need of a suitable route for connecting to the energy deficient countries, will substantially benefit from this corridor as a 500 km highway from Gwadar to Herat in Afghanistan will directly connect Central Asia and Russia with this regional hub.15 It will substitute the prevailing route from South Asia all the way to the Suez, Mediterranean, Atlantic and Baltic ports. The CARs will hence have an all-time access point to export their oil and gas resources to the neighbouring region at minimal transit cost.
F ig. 4 Transit Routes to China via Gwadar and Malacca Strait
Source: David Publishing (2018)16
Iran, which initially regarded CPEC as countering its Chabahar port, has recently been considering options for participation in the project, keeping in view the prospects of connectivity through road and railway networks to China and further on.17 For linking the two countries, all that is required is bridging around 80 km of distance from Gwadar to the Iranian border. These developments will pave way for the construction of the long-anticipated Pakistan – Iran gas pipeline starting from Asaluyeh in Iran to Gwadar and onwards to the north of Karachi. Interestingly, Russia is also constructing a North – South gas pipeline, starting from Karachi to Lahore.18 The eventual completion of these two pipelines will lead to a grander multilateral connectivity closely integrating Pakistan, Iran, Russia and China. In this manner, Pakistan will become a mega transit hub for gas pipelines leading to China and onwards.19
For Afghanistan, the prospects of joining BRI heralds new investment and development for the country. The initiative will advance the infrastructure of the war-torn state, connecting it with its South and Central Asian neighbours and allowing it to increase its regional trade.
The extension of the value chain on connection to the Middle East and the littoral states of Africa including Djibouti, Ethiopia and Kenya will make Gwadar one of the most vibrant transit corridors, stimulating flow of trade from almost three quarters of all African countries.
The projects under CPEC are progressing at a rapid pace. The corridor is already attracting attention from multiple actors in the region. Looking at the near future, this bilateral undertaking is expected to culminate in a much larger regional project. So far, Russia20, Iran, the UAE and Saudi Arabia have expressed their explicit interest in the corridor while the latter has already signed three MoUs for financing infrastructure and energy projects under the initiative.21 The likelihood of Iran joining the project would also extract out benefits for India in terms of its accessibility to Afghanistan and CARs. Though presently India is quite hesitant to dwell upon this endeavour, CPEC carries the potential of becoming a peace project, allaying the existing feelings of distrust and ambivalence in the region.22
KICKING OFF BRI AND ALTERNATIVE INITIATIVES
CPEC also has a special significance for Chinese initiated ‘the Belt and Road Initiative’ (BRI) which is one of the most ambitious 21st century connectivity plans. Based on multilateral cooperation, it comprises two types of routes: The Silk Road Economic Belt (SREB) stretching from South-East Asia to North Asia that will connect China all the way to Asia and Europe, and the Maritime Silk Route (MSR) consisting of a broader network of seaports positioned in different countries of Asia, Africa and Europe.
Not directly a part of ‘Belt and Road’ initiative yet an important loop in its larger chain, Pakistan is a crucial staging post for BRI’s take-off. It serves as a nexus for the continental and maritime routes of the ambitious connectivity framework. Gwadar is the only port under MSR that provides a conjunction to the overland corridors envisaged under BRI, i.e. linking with SREB at the origin and concluding at the MSR.23 Starting from Xinjiang, the corridor passes through three different routes covering various parts of Pakistan and ending at the Gwadar, Bin Qasim and Karachi ports. In fact the three ports provide an intersection where the ‘Belt and Road project’ meets via CPEC. Considering CPEC’s irreplaceably significant role in this process, it has been nomenclated as the ‘Flagship Project’ in this whole connectivity paradigm,24 which would function as a bridge in advancing BRI in connecting Central Asia, South Asia, the Middle East and China.25
With the implementation of CPEC and BRI, China will enter a ‘Two Oceans Era: The Indian and Pacific Oceans’. At a time of rising geopolitical significance of the Indian Ocean, these developments have put the whole project on the matrix of intense geostrategic competition,26 where it is more often seen as a strategic gambit rather than a connectivity initiative. Stoked by the undergoing changes in the given geopolitical context, a defensive sphere of parallel development plans has been proliferated. For instance, the Chabahar port inaugurated under a trilateral framework by India, Iran and Afghanistan post-CPEC was undertaken to bypass China and Pakistan.27 The Asia – Africa Growth Corridor is another step in this direction that was pitched by India and substantiated by Japan during the 52nd annual meeting of the African Development Bank.28 For the United States, BRI is a deliberate attempt at diminishing its ‘unipolar moment’. Correspondingly, to counter the rising influence of China in a new multipolar world order, it has teamed up with Australia, India and Japan to establish a joint regional infrastructure plan called ‘Quad’.29
Assertiveness aside, these multilateral connectivity architecture roadmaps have reignited the drive towards a loosely bordered, if not borderless, world at a time when globalisation is losing traction.30 BRI has hence manoeuvred the drive for Pan-Eurasian integration, which will foster larger scale growth in the region. Nonetheless, the silver lining remains in balancing hegemonism and cultivating an environment of coordination. Otherwise, disregard for harmonious development will not bode well for the broader spectrum of enhanced integration.
In the present days, when international trade has become the mainstay of economic prosperity, large-scale integration has emerged as one of the most pronounced developments globally. Today, the world has become an amalgamation of different types of regional blocs that are still growing in numbers.
The larger the positive spillovers of any project, the stronger and self-sustaining it becomes. This analysis reveals how implementation of CPEC is expected to transform the geo-economic landscape over the coming decades. Initiated as a bilateral project between Pakistan and China, it has become the catalyst for broader connectivity, invoking large-scale geographical lock-in. As transport costs have a statistically significant impact on inter- and intra-regional trade31, the corridor will enhance the commercial footprint in the entire region. Pushing connectivity across three continents, it will become the zipper of Eurasia, integrating more than 65 countries and over four billion people. Beyond the conjunction of physically adjacent economies, the corridor is entwined with inter-linked forces of soft connectivity, mutual cooperation and harmonisation, making it the forerunner for convergence of civilisations. Learning from the lessons of under-performing blocs, the corridor remains focused on shared development, thus promoting a culture of trust and inclusiveness.
Though the project has understandably sparked some scepticism among the adversaries, yet it creates hope for substantial regional growth, prompting partnerships and setting in motion parallel integration processes proving Pakistan’s position as a pivot of connectivity.
Research Officer, Institute of Policy Studies, Islamabad
1 Xu, Mengqiao, Zhenfu Li, Yanlei Shi, Xiaoling Zhang and Shufei Jiang. “Evolution of regional inequality in the global shipping network”. Journal of Transport Geography 44 (2015): 1-12.
2 Walz, Uwe. Dynamics of regional integration. Springer Science & Business Media, 2012.
3 ESCAP, “Regional Connectivity for Shared Prosperity”. Regional Connectivity for Shared Prosperity, 2014, 1-21. doi:10.18356/00d1c123-en.
4 US President Donald Trump’s ban on Chinese telecoms giant Huawei is one recent example of economic containment.
5 As of 2017, around eight Chinese universities and 12 Pakistani centres were working for the purpose. See, Butt. D, Hasan, “CPEC and the Road to Regional Integration”, CPEC – Spring Issue (2018).
6 Spearhead Research, “CPEC: Past and Future Challenges”, (2017).
7 KKH (often referred to as the Friendship Highway) spans the high mountain passes in North-East Pakistan and North-West China.
8 Small, Andrew. The China Pakistan axis: Asia’s new geopolitics. Random House India, 2015.
9 CPEC is not only focused on highways or roadways but also there is a plan to link Gwadar and Kashgar via rail network.
10 Wolf, Siegfried O. “Gwadar Port-a potential game changer?.” The Independent, March 24 (2013).
11 Hussain, Fakhar and Hussain, Mehar, “China-Pak Economic Corridor (CPEC) and its Geopolitical Paradigms”, IJSSHE – International Journal of Social Sciences, Humanities and Education Volume 1, Number 2, 2017.
12 Butt, Khalid Manzoor, and Anam Abid Butt. “Impact of CPEC on Regional and Extra-Regional Actors.” The Journal of Political Science 33 (2015): 23.
13 Korybko, Andrew. “Pakistan Is the ‘Zipper’ of Pan-Eurasian Integration”. Russian Institute of Strategic Studies (2015).
14 Hussain, Fakhar, and Mazher, Hussain. “China-Pak Economic Corridor (CPEC) and its geopolitical paradigms”. International Journal of Social Sciences, Humanities and Education 1, No. 2 (2017): 79-95.
15 Hussain, Sajid and Ayaz, Muhammad, “CPEC; A Roadmap of Region’s Development”, FWU Journal of Social Sciences, Winter 2017, Vol. 11, No. 2, 51-59.
16 Muhammad, Ghulam, “The Game Changer China Pakistan Economic Corridor (CPEC): A SWOT Analysis”, Cultural and Religious Studies, November (2017), Vol. 5, No. 11, 661-674.
17 Tribune.com.pk., “Iran Expresses Desire to Join CPEC.” The Express Tribune. February 15, 2019. Accessed June 24, 2019.
18 Korybko, Andrew, “CPEC and the 21st Century Convergence of Civilizations”, Geopedia, (2017).
19 Butt, M. Khalid, “Impact of CPEC on Regional and Extra-Regional Actors: Analysis of Benefits and Challenges”, (2015).
20 Azeemi, Ume Farwa. “Russia’s Tango with Pakistan | Opinion.” Asia Times. February 6, 2019. Accessed June 19, 2019.
21 Raza, Syed Irfan. “Saudi Arabia to Finance Three CPEC Projects.” Dawn.com. September 29, 2018.
22 Wagner, Christian. “The Effects of the China – Pakistan Economic Corridor on India-Pakistan Relations.” (2016): 4.
23 Markey, Daniel S., and James West. “Behind China’s gambit in Pakistan.” Council on Foreign Relations 5, No. 1 (2016).
24 Esteban, Mario. “The China-Pakistan Corridor: a transit, economic or development corridor.” Strategic Studies 36, No. 2 (2016): 63-74.
25 Pantucci, Raffaello, and Sarah Lain. China’s Eurasian Pivot: The Silk Road Economic Belt. Routledge, (2017).
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27 Daniels, Rorry. “Strategic competition in South Asia: Gwadar, Chabahar, and the risks of infrastructure development.” American Foreign Policy Interests 35, No. 2 (2013): 93-100.
28 Avinash Nair, “To Counter OBOR, India and Japan Propose Asia-Africa Sea Corridor,” Indian Express, May 31, 2017.
29 Kersten, Rikki. “Japan and the Quad.” Centre of Gravity Series 39 (2018).
30 US president Trump’s protectionism rhetoric intensified an environment for trade wars threatening global economic growth.
31 Limão, N. and A. J. Venables. 2001, ‘Infrastructure, Geographical Disadvantage, Transport Costs and Trade.’ World Bank Economic Review 15: 451-79.