Category Archives: CPEC

‘China sees CPEC as a way of creating free market’ says leading specialist

South Asia expert from Oxford University thinks that CPEC will have a positive effect on Pakistan but certainly not a transformative one. 

As reported recently in the New York Times, Trump’s isolation of Pakistan means that China will play an even greater role in our country’s future. In addition to economic development, it is now the case that the previously peaceful objectives of CPEC are duly shifting towards military cooperation involving “defense-related projects, including a secret plan to build new fighter jets.” It is possible to attack the Chinese-Pakistani partnership and label Pakistan a “guinea pig” for Chinese experiments, but the expansion of ties will also empower Pakistan against the increasing menace posed by mad Modi and his acolytes. The showcasing of Chinese military technology will be accompanied by Pakistan playing a key civilian and military role in China’s Beidou satellite navigation system, a prime part of the Belt and Road Plan considered to be the “information Silk Road”, which Beijing hopes to sell to all Belt and Road countries. In these rather interesting times, Professor Matthew McCartney, and specialist in development in South Asia, addressed the members of the PIIA on 31 March 2019. News reports are available below. Watch video

From Dawn: “Eight years ago when I had entered the Oxford School of Global and Area Studies at the University of Oxford, the focus there was on India but today our focus is truly on South Asia where the study on India is not possible without knowing about Pakistan,” said Professor Dr Matthew McCartney at the Pakistan Institute of International Affairs on Saturday. Dr McCartney, who teaches political economy and human development of South Asia at Oxford University, was speaking on the subject of ‘China-Pakistan Economic Corridor: Sustainable Economic Growth and Industrial Policy in Contemporary Pakistan’ Continue reading

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Speech by Dr Masuma Hasan: The East in World Politics – The New Power

Centennial Conference of the Institute of Oriental Studies Russian Academy of Sciences Moscow – 30 October 2018. Speech by Dr. Masuma Hasan: I wish to begin by paying a tribute to the Institute of Oriental Studies, Russian Academy of Sciences on the 200th anniversary of its founding – to its resilience, the remarkable academic assets it has developed over two centuries, its proud history and the excellence and dignity of its scholars. It is an honour for me to have been invited to this great event. On this occasion, I want to acknowledge the scholarship of Professor Yuri Gankovsky who headed the Centre for the Study of the Near and Middle East and also recognise the work of the present head of the Centre, Professor Vyacheslav Belokrenitsky, and his colleagues. Turning now to our subject, “The East in World Politics – the New Power”, as we have seen in recent years, the new power in the East is the tilt towards Asia.

In terms of sheer numbers, two-thirds of the world’s population or more than 5 billion people will reside in Asia by 2050 but population is declining in North America and Europe. Some analysts believe that Asia might produce half the world’s GDP by 2050 with an expansion of human capital and production. It is dominated by the strategic interests of two great powers, China and Russia, and the pitch for regional and global status by India. Today, if the East is seen as a new power in world politics, it is undoubtedly mainly due to China’s phenomenal rise and its economic and global aspirations but also because of Russia’s assertive role in global politics and “turn East” policy. China’s Belt and Road Initiative is reflected in its six economic corridors along two routes: the New Silk Road Economic Belt running west through Russia and Central Asia and the 21st Century Maritime Road to reach Europe through South Asia and South-west Asia. One of these corridors, the China-Pakistan Economic Corridor runs from Kashgar in Xinjiang to Gwadar in Pakistan and has been described as a game changer for Pakistan’s economy. Continue reading

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Converting CPEC into Pakistan-Central Asia Economic Corridor

We have to give up our India-centric policies and our slave mentality.

Pakistan is on a knife-edge with the upcoming general election on 25 July 2018. With Nawaz Sharif firmly behind bars, civil society organisations are predicting rigging in the election by the armed forces and there is a consensus in the country that the army is mass manipulating electoral politics in favour of its cronies. The economic problem arising out of the present political situation is that Pakistan is seriously in the doldrums owing to its debt to its international creditors. The country is facing a sovereign debt crisis and reliance on Chinese money is very high indeed. As reported recently in the Financial Times, Islamabad is headed for a foreign currency crisis but is keen to avoid yet another IMF bailout. So it is appealing to Beijing for more lending. In the year ending June 2018 Pakistan borrowed $4 billion from China and is facing problems with the devaluation of the rupee, the strategy used by the State Bank of Pakistan (SBP) to keep the economy afloat. At the start of June 2018, the SBP only had $10 billion in foreign currency reserves in comparison to $16.1 billion just a year earlier.

The problem does not stop there because $12.7 billion in external payments are due in comparison to £7.7 billion last year. The country will need to raise $28 billion this financial year to repay its debt obligations. Therefore, in such an environment, it is hardly surprising that Kaiser Bengali thinks that “we have to play our cards right in case of the China-Pakistan Economic Corridor (CPEC). The opening up of China has enhanced travel but not trade.” He recently made these remarks while addressing members of the prestigious Pakistan Institute of International Affairs (PIIA) and the media. Speaking on the subject, ‘Changing geo-politics and challenges for Pakistan’, he said: “My fear is that we will not be playing our cards right because of the slave mentality that our bureaucrats and planners have.” Elucidating further he said: “We are always looking to a bigger power to protect us against military adventurism.” In this context, he recalled that back in the 1950, we joined the US-sponsored defence pacts, the Cento and Seato, as a guarantee to be protected during times of aggression. Continue reading

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Former Iranian Foreign Minister Kamal Kharazi Addresses PIIA Members

Kharazi says Tehran is ready to mediate between Islamabad and New Delhi on Kashmir dispute. Clearly, Iran is competing with its western adversaries for a peacemaking role in the Indo-Pak region. 

Chabahar project not in competition with CPEC: Iran’s ex-foreign minister. Kamal Kharazi, Iran’s former foreign minister (1997-2005), has said the perception in Pakistan that Iran’s Chabahar port, including subsequent development of roads and railways networks for enhancing the country’s trade, is a ‘rival project’ of the China-Pakistan Economic Corridor (CPEC), is not correct. He was addressing a roundtable discussion with members, journalists, former and current diplomats and research students at The Pakistan Institute of International Affairs on Friday. Numerous foreign policy issues relating to Iran and Pakistan relations and their impact on the wider region were discussed. Speaking on the occasion, Mr Kharazi was of the opinion that though it was true that India had massively invested in the Chabahar project, it was an open platform for all regional countries to participate in.

“The Chabahar project is aimed at connecting Iran with Central Asia, and the ultimate goal is to uplift the Iranian economy,” he said, adding that the project was under deliberations for a long time, hence, it was not correct to link its launch with that of the CPEC. “While we are engaging with India on the economic front and India is investing in Chabahar, we have not given exclusive rights on the project to them,” he said, adding that Iran “was considerate of the situation of Muslims in India and in the region” while making economic partnerships. “We have urged India a number of times to resolve the Kashmir dispute in a peaceful and justly manner,” he said. “We are even ready to mediate between Pakistan and India on the 70-year-old dispute, but we haven’t got a positive response from India on it ever,” he said. “But if we talk about economic partnerships, then Pakistan also has relations with the United States which has put a number of sanctions on us, but [Iran] doesn’t mind it,” he said. Continue reading

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A Conversation on the Current State of US-Pakistan Relations

Trump is actually a new face, not a new factor on US outlook on Pakistan

From Dawn by Peerzada Salman. Two eminent speakers on Thursday shed light on the current state of Pak-US relations at The Pakistan Institute of International Affairs (PIIA). The first speaker was Najmuddin Sheikh, former foreign secretary of Pakistan. He started his talk by mentioning a few myths that prevailed. He said there was the myth that Pakistan and the United States had mutual interests. It had never been the case. The ties were of a transactional nature from the beginning and the commonalities were contrived. We did not have a common aversion to the Soviet Union. During the Afghan jihad we were genuinely concerned about the Soviet Union consolidating its position in Afghanistan, the old idea that it was looking for warm waters, but the Americans had a different idea; they said they would do to the Soviet Union what it did to them in Vietnam. The only commonality was the war against terror.

Mr Sheikh then pointed out the errors that the US committed. He said: “Why did the US allow Osama bin Laden get shifted from Sudan to Afghanistan?” He [Osama] travelled by a C130 from Sudan to Afghanistan. In Sudan he was a relatively unknown figure whereas in Afghanistan he was a hero of the Afghan jihad. Two years later an American general sitting in the office of our chief of army staff said they were firing missiles across our air space but they were not meant for us; they were trying to hit a camp in Afghanistan where they believed Osama bin Laden was. Mr Sheikh said the current situation was that President Trump’s New Year tweet generated a lot of speculation and he [Sheikh] thought there was a more rational explanation for it. Continue reading

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Balochistan: The Unresolved Conflict 

The government needs to work together with the mainstream Baloch political parties to bring reforms and change in Balochistan.

On 18 September 2017, Geneva’s streets were branded with ‘Free Baluchistan’ posters by members of the Baloch Liberation Army (BLA); a separatist group proscribed by both the United Kingdom and Pakistan as a terrorist organisation. Only recently, Pakistan strongly protested against Switzerland allowing its territory to be used by a terrorist organisation to carry out activities that infringed upon its sovereignty and territorial integrity. The ambassador of Switzerland, Thomas Kolly, was asked to leave Pakistan, by the Senate Chairman Mian Raza Rabbani. India was also deemed responsible for funding these displays in Geneva. While there has been no concrete evidence suggesting whether India has funded such activities, it has extended its support to these separatist groups on previous occasions. India’s National Security Advisors, AK Doval, threatened Pakistan, stating that the troublesome neighbour could lose Balochistan if 2008 was repeated.

Following Doval’s threats on Balochistan, Pakistan arrested India’s senior intelligence operative, Commander Kulbhushan Jhadav, from Balochistan on March 3, 2016, who confessed to funding, training and planning terrorist attacks in the province. The event in Geneva orchestrated Pakistan’s biggest fear – international meddling in its affairs with regards to Balochistan. Yet, neither Switzerland nor India are responsible for the rise of the separatists in Balochistan; rather, the fault lines can be traced to the uneven state building in Pakistan. While greater resources and efforts have been devoted to the federal, Balochistan remains neglected in political, economic, and social terms. A disenfranchised Balochistan lays as a breeding ground for insurgency. Continue reading

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Ayesha Ahmed: All Weather Friendship: A Closer Examination

Though the interests of the two countries are increasingly intertwined due to CPEC, the question still remains as to what Pakistan should be able to expect from its “iron brother” on an international diplomatic stage.

The relationship between China and Pakistan is almost as old as the People’s Republic of China (PRC) itself and significantly Pakistan was one of the first countries to establish diplomatic relations with PRC in 1950. Whilst relations between the neighbouring countries have remained largely positive over the years, the creation of the China-Pakistan Economic Corridor (CPEC) in 2013 means the alliance between the two countries has entered a golden age. Indeed, China’s current investments in CPEC stand at around $62 billion and the project is expected to reinvigorate Pakistan’s economy. No wonder then that just two months after the establishment of CPEC former Pakistan Prime Minister Nawaz Sharif famously described the alliance in glowing terms as “sweeter than honey” and “higher than the Himalayas”. However, just last month a statement from the BRICS summit that China hosted in Xiamen threatened to undermine this warm rhetoric and the “all weather friendship” between the two countries.

On September 4th, a BRICS declaration against terror groups included, among others, Lashkar e Taiba, Jaish e Mohammed and the Haqqani Network. All three groups are based in Pakistan. This declaration came just three days after Chinese Foreign Minister spokesperson Hua Chunying told a press briefing that Pakistan’s counter-terrorism effort was not an “appropriate topic” for the BRICS summit. Granted, the Xiamen declaration neither explicitly named Pakistan nor made any overt comments about Pakistan’s ability to deal with terrorism, yet the very mention of these three groups opened Pakistan to speculation about its effectiveness in dealing with terrorism in its own backyard. Such a declaration, ostensibly endorsed by one of Pakistan’s closest allies at a high profile international summit, undoubtedly dealt a heavy blow to Islamabad. Continue reading

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