‘CPEC: could it be a strategic game-changer for the region?’

The China-Pakistan Economic Corridor (CPEC) was the subject of The Democracy Forum’s most recent seminar (Senate House, University of London, January 20), at which speakers addressed the central question: ‘Could it be a strategic game-changer for the region?’
Following a brief introduction from TDF Chairman Sir Peter Luff, Lawrence Saez, Professor in the Political Economy of South Asia at SOAS, spoke first. Though ultimately sceptical about the feasibility of CPEC, he outlined some of the criteria used to evaluate its viability and considered the nature of economic corridors in general, which he defined as integrated networks of infrastructures within geographic areas, designed to stimulate economic development. For CPEC, it was key to think about the benefits in this regard for both China and Pakistan.
Prof Saez discussed both the ‘bottom-up’ approach to ECs — where there is existing economic activity, either legal or illegal, and civil society involvement in trade — and the ‘top-down’ EC, where there is more state involvement between jurisdictions. CPEC, he said, fits the second model. He also outlined different types of EC and the factors that help sustain them, and looked at the existing environment of regional cooperation. Saez did not consider that there was economic parity for the actors involved in CPEC, with building and other costs not equally shared, and exports between China and Pakistan much more in China’s favour. The viability of CPEC is further complicated by the presence of another regional hegemon, India, who needs to be consulted.
Dr Adnan Naseemullah from the Dept of War Studies, King’s College, London considered CPEC in terms of its prospects for domestic development and political order in Pakistan. In his view, the corridor could be of huge benefit to Pakistan, for reasons tied to the country’s political economy and more general politics. He discussed how Pakistan’s relationship with China is different to that which it has had with other partners, and how China can achieve another level of economic development through the types of investment attached to CPEC. Pakistan’s long dependence on external, mostly Western aid has had only short-term effects on security, which have changed with the various administrations. But with China, things are more long-term, with more sustained involvement than with Pakistan’s Western partners.
CPEC could, Dr Naseemullah believed, be seen as a kind of Rosenstein-Rodan ‘big push’ investment in terms of infrastructure, power and connectivity, which are currently major constraints in the Pakistani economy, though he believes it has great potential. While CPEC would help the Pakistan economy and, by extension, the state in general, it would, he conceded, cause problems in areas such as rural Balochistan, FATA and NWFP (the main conduits of the corridor), since the Pakistani state has not formed any kind of political settlement with parts of the country that are excluded from normal forms of governance through representation, etc. He also spoke of China’s key role in regional security, especially in Afghanistan, but foresaw increasing challenges to the authority of the Pakistani state and Chinese investment, and the pushing out of indigenous populations in areas such as Gwadar Port and Balochistan, due to unresolved issues of distribution.
CHINA-PAK-05A short Q&A followed, in which audience members raised questions on issues ranging from whether CPEC would it serve as an impetus for more FDI, possibilities for the corridor to change the security situation in the region and China’s role in Afghan efforts at Taliban reconciliation, to the link between economic corridors and conflict resolution, and whether the CPEC project would be sustainable without the support of Pakistan’s marginalised Baloch and Pashtun populations.
Back to the panel presentations, for Dr C Christine Fair of Georgetown University, the key question touched on China’s role as both a strategic competitor in the East and a partner in security in South Asia. She began by saying she did not believe CPEC will ever happen, but if it does, there will be many benefits for everyone. The US regards China as a strategic competitor, or foe, and those in certain positions of power in the US, not having any vision into the Afghanistan-Pakistan theatre, cannot see the positive benefits that China actually brings to the region. She acknowledged that the situation in Afghanistan is very severe but, rather than focussing on troop drawdown, we should be more concerned about the country’s economic drawdown, and China can help with this, as it has a very long-term investment plan. Dr Fair questioned China’s contribution to the local economy in Pakistan, given that it brings it own workforce, and admitted that CPEC would mostly benefit China security-wise (though it has many benefits already), allowing it to exert more leverage on Pakistan.
She also considered the role of Baloch separatists in the CPEC issue, who could either face extinction at the hands of a punitive Pakistan state willing to do anything to make Balochistan safe for Chinese exploitation, or try to negotiate for a share of the rents. Pakistan is very adept at making the Baloch look as though they are Indian tools. Looking at external and internal security in Pakistan, Dr Fair said the country was currently experiencing blowback from the strategic objectives of using terrorism as a tool of foreign policy. Pakistan is serious about eliminating those parts of the Pakistan Taliban that it cannot reconcile, but is very good at reconciling parts of the Pakistan Taliban to go back to ‘good’ terror (ie those killing US troops and their Afghan allies, etc), or rehabilitating J-e-M to kill Indians. Pakistan will increase its domestic security at the cost of external security. CPEC may incentivise the Pakistan state to take its own internal security seriously but it will have negative externalities. Until the Pakistani state decides that terrorism is not an effective tool of statecraft, said Dr Fair, nothing in CPEC can change the ideological nature of the Pakistan army.
Dr Samir Puri of KCL’s Dept of War Studies discussed security and counter-terrorism dimensions of expanding Sino-Pakistan relations, considering also how China will manage this bilateral engagement in the context of its multilateral ventures. He drew parallels between Xinjiang/China and Balochistan/Pakistan, considering such issues as feelings of disenfranchisement among the minority people and security threats, and both the differences and overlap between Uyghur/Baloch separatists and Islamist jihadists. Dr Puri looked at the impact of this for the CPEC route, and considered worsening security threats, the potential threat of aggregation due to the common cause of trying to face down increasing state penetration, and counter-terrorism co-operation.
Given that Pakistan (and India) are being admitted to the Shanghai Cooperation Council, he also discussed the balance China needs to strike, at a regional level, between its bilateral and multilateral enterprises.
An audience member asked if the issue of India’s legal sovereignty over the whole of Kashmir, including Gilgit & Baltistan, could legally be brought before the United Nations, to which Dr Fair gave a brief history of the complexities of what she called the Kashmir ‘rabbit-hole’. She said she thought it very unlikely that the UN would consider the territorial issue and that the main thrust of India’s policy is to establish the LOC as a permanent border between the two states.
Final speaker Dr Jan Knoerich of the Lau China Institute asked for whom CPEC was a game-changer, arguing that, while it is certainly a strategic game-changer for China, in view of Pakistan’s interests and those of the region, the ultimate outcome is much less certain. While China is pursuing similar investment strategies in other regions of the world such as Africa, Myanmar and OBOR, Dr Knoerich said that doing so in Pakistan is vital for China, given Pakistan’s unique geostrategic location especially from China’s perspective. In this supposedly ‘win-win’ arrangement between China and Pakistan, China’s objectives—building the infrastructure to access the Arabian Sea which will enhance China’s energy security and global strategic positioning—are more easily met than those of Pakistan, ie to achieve economic development and internal stability. The latter, he said, will be determined by many more factors than just provision of investment funds.
The last Q&A brought questions and comments from the audience on China’s difficulties regarding CPEC and what Pakistan would gain from it; the current status of the proposal; America’s future role and influence in the region; and whether CPEC would spur a new round of investment between Pakistan and India or was just another excuse for the two to clash.
The event ended with a word of thanks from Sir Peter Luff to the five speakers and 70-strong audience, which included journalists, students, government staff and diplomats.

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