CPEC , The backbone of Pakistan's economy | CPEC essay

Having pledged about sixty two billion dollars in dozens of energy and infrastructure projects the china-pakistan economic corridor is one of the largest commercial initiatives in south asia the corridor stretches along the length of Pakistan and the combined value of all the projects equals to all the foreign direct investment in the country since 1970 the mega project also marks as China's biggest overseas investment yet a plan of this magnitude is not without its NGO economic challenges.

The CPEC has two arms that consist of a network of roads bridges pipelines and railways that will run from China's western mos tcity of kashgar to each of Pakistan's major cities before connecting to the deepwater ports at quarter and Karachi by the Arabian Sea from end to end the mega project stretches about 2,700 kilometers the scale of the initiative also demonstrates the extent of the Pakistani Chinese relationship the two countries refer to one another as ayran brothers a phrase that dates back to the Cold War when they teamed up against India of course the relationship between Islamabad and Beijing has seen its share of frictions yet overall the two are indispensable allies for each other and the CPEC which was signed in April 2015 serves as a complement to that relationship besides politics the CPEC is ultimately an economic undertaking that serves multiple goals for Beijing. 

The initiative seeks to open a new trading route to the Indian Ocean allowing the Chinese to bypass the maritime choke points in the contentious South China Sea the growing commercial activity in Pakistan would also allow China to develop its remote western cities meanwhile for Islamabad the CPEC provides much-needed foreign investment and all the economic opportunities and perks that come with it the initiative will also help to stimulate economic growth in Pakistan and improve the living conditions in its underdeveloped western regions for instance the energy projects of the initiative which account for at least 30 billion dollars of the total investment some would address Pakistan's annual electricity shortage of 7,000 megawatts it is estimated that if Islamabad could overcome its electricity shortage economic growth could climb by an additional three percent thus far all the energy projects together would add at least 10,000  megawatts to Pakistan's electricity grid with another 17,000 megawatts being considered for future projects given that Pakistani energy needs grow by 10 percent each year in addition the numerous pipelines that run across.

Pakistan would connect the Middle East, Central Asia and South Asia with each other thereby providing a platform for Pakistan to emerge as a regional energy hub another component of the economic corridor is the development of quarter by the mouth of the Arabian Sea a new airport motorway and railway is being constructed near the city more importantly the deep seaport in Quarter is being redesigned to accommodate large freighters to put the expansion into perspective the harbors current capacity stands at 1 million tons of cargo but it will expand to 400 million tons of cargo per year making water one of the most sophisticated ports between the Arabian Sea and the Indian Ocean altogether it'snot surprising that the corridor is portrayed as a remedy for Pakistan's one that will stimulate the economy reform the energy sector and create employment simultaneously on the surface the concept of the CPEC offers mutually beneficial payoffs within the framework of the Belkin Road initiative which we covered in a separate report however in practice the payoffs will not be evenly distributed across the country which has upset some more than others.. 

Perhaps the biggest complication standing in the way of the CPEC mega project is Pakistan's domestic landscape where the province of Punjab Sindh, Khyber Pakhtun khwa and Balochistan compete with one another for political power in particular officials from Balochistan accused their countrymen from Punjab from marginalizing their people in the CPEC project this rivalry has taken a political dimension in 2015 the Punjabi elite in Islamabad cut the Balochi locals out of the equation in the operation of quadra-port this delegation of power is understandable Pakistan's political and economic Heartland as well as its human capital is concentrated along the Indus River which runs through the country's eastern health morover Punjab is the wealthiest and most populous province of Pakistan and for the political leadership it's also the most important electoral province thus marginalizing Balochistan is not a conspiracy but the result of the social political environment of Pakistan regardless some Balochis do not welcome the CPEC project just recently on august 11 a suicide attack by Balochi separatists targeted a bus carrying Chinese engineers to a CPEC project site. The assault injured six people including three Chinese nationals similar attacks have occurred in the past in fact from 2014 to 2016 Balochi militants killed 44 CPEC Pakistani workers..

What's different now is that the Balochi separatists have started to target Chinese engineers an estimated 40,000 to 70,000 Chinese nationals work in Pakistan's toughest areas such as Kashmir Khyber Pakhtun khwa and Balochistan up until now Islamabad having provided about 15,000 soldiers and paramilitary forces to protect CPEC workers has largely kept the situation in check however as local militants in Pakistan start to target Chinese engineers these security risks are likely to worsen which will upset Beijing already the Chinese leadership has hinted that it's ready to take a more direct role in security like in Africa where Chinese troops are deployed to protect Chinese workers thusfar Pakistan remains responsible for the security in its own territory but as militants increased their attacks on Chinese nationals calls for Chinese deployment in Pakistan will increase in Beijing this will strain the political process underneath the surface another pitfall of the initiative is finances previously in 2013 the CPEC was valued at 46 billion dollars today that amount has surged to 62 billion dollars furthermore..

Since the beginning of 2018 the Pakistani rupee has lost about 20%of its value against the dollar which has made the dollar-denominated debt repayments more expensive in the meantime the country's foreign exchange reserves have dropped to below 10 billion dollars while its external debt has grown to 30% of the GDP it's unknown how much of Beijing's funding is in aid or in loans and that information is kept deliberately obscure however the present economic crisis in Pakistan is leaving the government with no choice but to dig deeper into its wallet and now the Pakistani government is seeking to acquire a 9 to 14 billion dollar bailout from the IMF having said that policymakers in Washington oppose using IMF funds to repay Chinese loans unless Pakistan opens the books on the CPEC project for Beijing that would be a geopolitical disaster because it would expose the Chinese checkbook diplomacy and undermine its mega projects elsewhere instead to contain the Pakistani economic crisis Beijing is likely to provide additional loans to Islamabad so it can pay off its original loans.. 

What exactly China's endgame is it's ambiguous it is assumed that Beijing wants to gain more commercial leverage on Islamabad so the Chinese will gain permission to construct a new naval and air base in the port city of Jivani by the Iranian border such a military base would grant China significant leverage on India whether this is true or not remains guesswork at this point and although the completion of the CPEC project will stimulate economic growth in Pakistan the government in Islamabad must make sure they don't become too indebted to Beijing beyond this if Pakistan is truly to reap the benefits of the mega project the state must crack down on corruption strengthen civil institutions and maintain political stability at the same time the Pakistanis will need to address the growing security needs that revolve around the economic corridor one way to deal with the Balochi grievances is by including them in the decision-making process still even with these geo economic pitfalls for the ayran brothers the scale of the china- pakistan economic corridor is too big to fail thus for Beijing and Islamabad the benefits of the economic venture outweigh the risks I've been your host children from Caspian report credit goes to our community on patreon for giving us the means to produce content like this now if you want to gain access to some perks or if you want to support our channel in general visit patreon calm slash Caspian report all the funds will help to keep Caspian Report independent and free of sponsors in any case.