The China-Pakistan Economic Corridor (CPEC) is a monumental initiative poised to significantly enhance economic and trade connectivity between Central Asia and the global market. Recognizing its transformative potential, CPEC is a key component in the regional development strategy, particularly for the landlocked Central Asian countries rich in hydrocarbon resources, minerals, and agricultural products like cotton.
Enhancing Connectivity for Landlocked Central Asia
Central Asia’s wealth in natural resources is well-documented. However, the region’s landlocked status necessitates reliance on distant seaports for access to global markets. Existing seaports in China and Russia, such as Vladivostok, are situated at prohibitive distances, with Vladivostok being approximately 9,500 kilometers away. Similarly, Turkish Black Sea ports are more accessible but pose risks due to the conflict-prone Caucasian routes.
In contrast, Pakistan’s Gwadar seaport, located a mere 2,700 kilometers from Tajikistan, offers a significantly more viable and efficient route. This shorter distance translates to reduced transit times and lower freight costs, providing Central Asian countries with a strategic gateway to global markets.
Facilitating Energy Exports
CPEC’s relevance extends beyond seaport connectivity to encompass oil and gas pipelines that link Central Asia with South and Southeast Asia, as well as other global markets. Historical pipelines from the Soviet era channel oil and gas to Europe, while new routes, including the International South-West Transport Corridor sponsored by Russia, Iran, and other Eurasian countries, further enhance energy export options.
One notable pipeline connects the Caspian Sea to Turkish Black Sea ports, operational since 2006. Another viable route involves transporting energy through Afghanistan, Iran, and Pakistan, ultimately connecting with the broader global market.
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Economic Impact and Job Creation
The Asian Development Bank estimated in 2006 that operational economic connections within Greater Asia could surge trade between Central Asian states and Afghanistan to $12 billion. This increase in trade has the potential to create 750,000 jobs and boost the GDP of China’s Xinjiang Uygur Autonomous Region by 3 percent.
Moreover, the Eurasian Bridge, currently under construction by China, aims to enhance direct trade links with Europe via Central Asia. This infrastructure project is expected to cut transit times from 20-40 days by sea to just 11 days by land, significantly reducing transit and freight costs and benefiting trade between Asia and Europe.
Strategic Significance for Pakistan
Pakistan, Iran, and Afghanistan occupy crucial positions in this new economic landscape. Pakistan, in particular, stands to gain immensely from CPEC, with its direct connectivity to Xinjiang and the Gwadar seaport. The shorter transit periods and distances, coupled with reduced freight costs, are key factors in promoting trade and transportation of commercial goods. Gwadar port is poised to attract significant cargo traffic from Xinjiang to Europe, further solidifying its strategic importance.
Foreign Policy and Security Challenges
Despite the vast opportunities, CPEC presents considerable foreign policy challenges for Pakistan. Managing bilateral relations with Iran and Afghanistan is crucial. Stability in Afghanistan is paramount for Pakistan’s interests, necessitating support for international and regional efforts to establish inclusive governance there.
Additionally, opposition to CPEC from the U.S. and India poses challenges that Pakistan must address. Ensuring the security of trade routes is vital for the success of Gwadar port and the broader CPEC initiative.
Overcoming Domestic Challenges
To fully capitalize on CPEC’s economic potential, Pakistan must address significant domestic challenges, including rehabilitating its economy, escaping the cycle of debt, corruption, and economic mismanagement, and overcoming internal ideological, parochial, and ethnic divides. Addressing these issues is essential to maximize the benefits of regional connectivity and position Pakistan as a central player in the evolving economic landscape.
A game-changer
CPEC is a game-changer for both China and Pakistan, offering profound economic and strategic benefits. By linking Pakistan directly with China, Central Asia, and Europe, CPEC bolsters Pakistan’s geo-economic standing and enhances regional trade connectivity. Successfully navigating the associated foreign policy and security challenges will be crucial for Pakistan to realize the full potential of this transformative initiative.
