June Issue 2015

By | Economy | Published 9 years ago

Forty-six billion USD is an astonishingly high sum for any country to invest overseas. What is more, the money is being invested in a country that features on every list of the world’s most volatile, dangerous states over the past decade. Not to mention the fact that the investor looks set to become the biggest economy in the world by the time the investment bears fruits. There has to be a catch.

China’s highest ever overseas investment aims to boost the ‘Silk Road Economic Belt’ and get direct access to the Middle East and Africa. Pakistan, meanwhile, is looking to duplicate the US-Mexico equation with China, and make the most of geographical proximity and historical ties with a fiscal behemoth. The China-Pakistan Economic Corridor (CPEC) could herald the shift in the economic and geopolitical epicentre of the world towards South East Asia and, more specifically, China.

For almost the past decade-and-a half, South Asia has instead been the epicentre for regional and global terrorism, with north-east Afghanistan and north-west Pakistan being the loci. The CPEC is supposed to link Xinjiang to Balochistan, with a straight-line displacement from Kashgar to Gwadar (about 2,500 km long), traversing both the north-west of Pakistan and the volatile Balochistan province.

The Kashgar-Gwadar alignment is flanked by, among other militant organisations, the Tehrik-e-Taliban Pakistan (TTP) and its factions, including those in the Bajaur, Khyber and Kurram agencies that have pledged allegiance to the Islamic State (IS) — also known varyingly as ISIS, ISIL and Daesh. Jundullah (Pakistan), which openly took responsibility for the bus attack on the Ismaili community in Karachi last month, is also affiliated with ISIS.

In the south, the Iranian Jundallah and Jaishul Adl lead the Islamist militancy, orchestrating cross-border terrorism through Balochistan, on either side of the Iran-Pakistan border. This, when coupled with separatist groups like the Balochistan Liberation Army (BLA), Baloch Republican Army (BRA) and the recently surfaced United Baloch Army (UBA) — that orchestrated bombings in Islamabad last year — makes the province a veritable nightmare for any potential investment.

Even though the claim has been categorically denied by Federal Minister for Planning and Development, Ahsan Iqbal, the new CPEC route is believed to have been pushed eastwards to go through the entire length of Punjab and Sindh, penetrating the Balochistan border virtually parallel to the coastline, before joining Gwadar. The new route is believed to be pursued in accordance with the demands of the Chinese government that is not only wary of the security situation in Balochistan, but is also known to have been vocal about its own Uighur separatists allegedly receiving training from Islamist militant organisations in Pakistan.

With two separatist movements at either gateway of the CPEC, envisioning independent Balochistan and East Turkestan, China has been more than willing to splash the cash to quell the uprisings. It is no coincidence that the Zarb-e-Azb military operation in the North West and escalation in the Balochistan operation overlapped with Sino-Pak paperwork being finalised for the CPEC.

Forty-six billion USD is loose change compared to the strategic, and in turn economic, benefits that China would reap from linking the Caspian Sea to the Strait of Hormuz, making Gwadar one of the most lucrative ports in the region. There was a reason why the US was backing the Port Authority of Singapore to take control of the port. Meanwhile, for Pakistan,the CPEC is all about power.


The National Power Policy (NPP) 2013 had two major goals: first, enhancing Pakistan’s energy mix; and second, reducing the power shortfall, which currently stands at 4,500 MW to zero by 2017. While the latter goal is exceedingly optimistic, by incorporating wind, hydropower and solar projects — spearheaded by the recently inaugurated Quaid-e-Azam Solar Park in Bahawalpur — into the mix, Islamabad is finally banking on renewable energy and planning to capitalise on its massive wind and hydropower potential. In addition to the Quaid-e-Azam Solar Park, the CPEC includes the 70 MW Hydro-Electric Suki Kinari Hydropower Project, Thar Block II 2x330MW Coal Fired Power project, Dawood Wind Power project, and the much procrastinated-over Iran-Pakistan (IP) Pipeline.

The construction of the Gwadar-Nawabshah LNG Terminal and Pipeline Project, which would be linked to IP, signifies Pakistan eyeing a mixture of LNG imports and pipeline gas from Iran — and perhaps eventually Turkmenistan — as the significant chunk of its gas mix. Considering that bridging the gas shortfall is an existential question for many Pakistani industries, including textiles, the Gwadar-Nawabshah-South Pars pipeline network is pivotal to Pakistan’s gas renaissance. Engulfing this potential pipeline network is, again, the Baloch insurgency.

IP was originally supposed to be the IPI Pipeline, transporting gas from Iran’s South Pars field to India, via Pakistan, before New Delhi backed out in 2009, in the aftermath of the Mumbai attacks and a civilian nuclear deal with the US. India has since invited both Iran and Pakistan to the negotiation table, and in 2013 proposed the ambitious 110-km India-Pakistan pipeline, linking Jullunder to the Wagah border via Amritsar.

When you add the Trans-Afghanistan Pipeline (also known as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline) into this network, linking China and the Central Asian states to South Asia and eventually the Far East, you get a massive regional bloc linked together with energy sharing symbioses. This would culminate in collective security becoming pivotal for all the stakeholders, and any inkling of volatility, in any part of the network, being detrimental for the respective economic growth of all the countries involved.

Collective security based on energy sharing and enhanced trade can overcome historical animosities that are brimming over in South Asia. The formation of the European Union is a prime example. However, the regional bloc that the CPEC is vying to establish is facing a chicken-and-egg situation.

For the CPEC to be fully developed, and the ensuing pipelines linked to a regional network, there needs to be a secure environment. On the flipside, the completion of the CPEC and fulfilment of the related project would ensure security by making the entire region, most notably China, a stakeholder for peace in the unstable regions of Pakistan. Islamabad seems to have gone for the short-term fix in Balochistan.

While imperialist militant organisations like the TTP need to be dealt with by force, using the whiplash for separatists in Balochistan can aggravate the unrest while creating a mirage of security. How the proverbial iron fist alienates communities vying for autonomy can be witnessed at the other gateway of the CPEC.

Uighur separatists in Xinjiang carried out over 200 attacks in the ’90s, killing 162 Chinese citizens. In the ensuing 15 years, China tightened the noose on anti-Islam policies in Xinjiang that blatantly target the Uighur Muslims, both militants and moderate law-abiding citizens. There are bans on long beards, veils and ‘Islamic symbols’ in public transport, with discriminatory laws designed almost as if to force the Uighurs from shunning their Muslim identity. This completely contradicts Beijing’s attitude towards the Hui Muslims that have settled all over China, and are touted as the face of Chinese Muslims.

Instead of creating harmony in Xinjiang, Chinese state policies have exacerbated the Uighur resentment that has resulted in terrorist attacks in Turpan Prefecture, Kumming, Urumqi and Yarkand, killing hundreds in the past couple of years. Islamabad’s attitude towards the Baloch, in general, and the separatists, in particular, mirrors Beijing’s treatment of the Uighur Muslims. The complete indifference manifested by all state institutions to Mama Qadeer Baloch and his long march for missing persons, epitomises the problem.

China, however, is on the verge of righting its wrongs of the past half-a-century. By giving Xinjiang — its least developed administrative unit — the major chunk of the CPEC’s economic benefits, it might help curtail Uighur antipathy which has been magnified by financial disparity. Whether or not Islamabad is going to take any steps to undo its decades of Baloch isolation, however, is still unclear.

Any attempt to make Gwadar the crucial doorway of the Sino-Pak economic corridor and the fulcrum of an energy-sharing regional bloc, without addressing Baloch concerns, will backfire. While no state would willingly acquiesce to separatism, especially when its economic future depends on the isolated province’s resources and geopolitical location, it is a century too late to counter nationalist movements with military operations and human rights abuses.

Even though the government might not have any other choice but to shift the route eastwards, despite the understandable reservations of Balochistan and Khyber Pakhtunkhwa, especially if it’s a Chinese demand, the long-term outlook of the CPEC depends on taking the Baloch on board. The government needs to assure the Baloch that a significant part of the financial benefits would be shared with Balochistan, and Islamabad should vow to create the infrastructure needed to construct the Gwadar-Kashgar aligned route.

At a time when IS is believed to have penetrated South Asian, if not Pakistani, borders, and TTP and its factions are responding strongly to Operation Zarb-e-Azb all over the country, Islamabad cannot afford separatist militancy in Balochistan. While there could eventually be a wide gamut of stakeholders ensuring tranquillity in Pakistan’s hitherto volatile regions, the buck for Baloch integration into the economic and political gains rests with the current federal government.

This article was originally published in Newsline’s June 2015 issue.

Kunwar Khuldune Shahid is a journalist and writer based in Lahore.