Pakistan’s proposal on China Pakistan Economic Corridor (CPEC) to include Turkey: A beneficial step?

According to Pakistan’s Prime Minister Shehbaz Sharif, an ambitious China-Pakistan Economic Corridor (CPEC) can be transformed into a “trilateral partnership” between China, Pakistan, and Turkey. This will enable all three friendly nations to benefit from its prospects. He also said that with the development of financial and industrial activities, trade activities have the potential to increase massively. The current CPEC project will help us achieve our purpose of maximizing regional connectivity and increasing trade. “Turkiye and Pakistan as ‘one nation living in two countries and even before the creation of Pakistan, the Muslims of the sub-continent supported the cause of their Turkish brethren,” said the Prime Minister of Pakistan. China and Turkey are ready to accept this proposal say both the countries’ presidents.

Pakistan and Turkey has a very strong, friendly and harmonious relationship since past 70 years. Turkey and its ideological partnership with Pakistan is significant not only for the peace in the region of South Asia, but also for Europe and the Gulf. On the other hand, China’s and Turkey’s relation has had ups and downs but now, both have been establishing Sino-Turkish strategic cooperation and economic partnership. CPEC would further deepen their economic partnership. This multilateral CPEC project is also leading China towards becoming an economic hegemon and would increase the global relevance of China. Also, Turkey is a key junction to connect China with Europe. This will be very favorable for China.

The partnership will not only be beneficial for economic purposes but, it will strengthen the internal situation of all the member countries and will prevent the external influence from the regions. The new strategic and economic alliances will be built. This Turkey, Pakistan and China relationship can also be helpful for taking a stand on Kashmir issue against India’s atrocities, Palestine issue and making Afghanistan’s circumstances better since they do depend on peace, security, and stability in South Asia and the Middle East. A Pakistani senator Mushahid Hussain Sayed has truly stated: ‘’The policies of “Muslim middle powers” can no longer be dictated by Western nations, while these nations should focus on connectivity, boosting their economies, and coming together for “mutual interests.” Pakistan and Turkey relationship in terms of CPEC will indeed build up a strong position of the two Islamic states in the Muslim world and internationally as well. CPEC is a multi-million project and the largest foreign investment so, it will definitely boost energy resources and increase international trade through its convenient routes balancing geopolitics and economics.

CPEC: Challenges and Opportunities for Pakistan

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CPEC: Challenges and Opportunities for Pakistan

Making Sense of the CPEC Controversy

Making Sense of the CPEC Controversy

Rafiullah Kakar

The controversy around the China-Pakistan Economic Corridor (CPEC) seems far from subsiding. In recent developments, political parties from Khyber-Pakhtunkhwa (K-P) and Balochistan have upped the ante and have accused the ruling party of ignoring the smaller provinces in the multi-billion dollar project. In an attempt to make sense of the concerns advanced by representatives from Balochistan and K-P, I am going to examine the position taken by the federal government in a series of articles.

The CPEC is a multi-route corridor that will be completed in multiple phases over a period of 15 years. As per the decision of the May 28, 2015, APC, the western route of the corridor passing through the relatively lesser-developed provinces of Balochistan and K-P is being built on a priority basis. To judge whether the federal government has actually prioritized the building of the western route or not, let’s develop a simple test and check if its claims about having prioritized this route pass the test. According to the test, the western route shall be considered prioritized if it meets the following conditions:

1) The quality of infrastructure of the western route should be better or at least similar to that of the eastern route. For this to happen, the government must have allocated the required financial resources to the route.

2) Ideally, the western route should be constructed first so that it can become functional before the other two routes. If circumstances are not ideal, as is often the case, then it should become operational at least simultaneously with the other routes. Timing is central to economic planning and development. The question of ‘which-route-to-take-first’ is very important and is likely to play a key role in shaping the subsequent path of development.

3) At least half of the proposed industrial parks and economic zones and other supporting components of the corridor, including energy projects, railway tracks, and gas pipelines should be located along the western route.

Now let’s examine if the western route fulfills the criteria enumerated above.

The western route is a two-lane road whereas the eastern route is a high-speed six-lane modern motorway with controlled-access design. The pavement design of the eastern route is markedly superior to that of the western route. The latter can’t withstand loaded trucks. The superiority of the eastern route is not surprising given the government’s preferential funding for it. The allocation pattern of federal development funding clearly suggests that the eastern route is the government’s priority. In the 2015-16 federal PSDP, the government has allocated only Rs20 billion to the western route while earmarking a handsome Rs110 billion to the eastern alignment. Out of the Rs20 billion, approximately Rs5 billion have been allocated for the Gwadar-Turbat-Hoshab (M8) and Hoshab-Panjgur-Besima (N85) sections, which constitute the common route shared by all three alignments. In strictly technical terms, therefore, the funds earmarked for the western route in the 2015-16 federal PSDP are approximately Rs15 billion, of which not even a penny comes from the approximately $11 billion CPEC loans taken on for infrastructure development. As of December 31, 2015, only Rs1.6 billion of the Rs15 billion have been released.

Coming to the second pillar of the test, the two-lane road along the western alignment is likely to be completed by the end of 2018 whereas the six-lane motorway along the eastern alignment will be completed by the end of 2017. Lastly, the eastern route passes through the relatively developed parts of the country and is in geographical proximity of major urban centres, energy production sites and growth zones. Railway tracks and LNG pipelines will run parallel to it. As far as industrial parks are concerned, let’s hope they will be equally distributed among the three routes.

Given the huge contrast in the infrastructural quality and spatial proximity of the two routes, the eastern route is destined to effectively become the primary route, the government rhetoric about having prioritised the western route notwithstanding. The two-lane western route, if completed by 2018, will remain an auxiliary route at best. The reality is that the government had decided to change the corridor route in late 2013 or early 2014. This is proven by the 2014-15 federal PSDP in which the government had earmarked Rs49 billion for the CPEC, all of which was to be spent on the eastern route. When confronted with mounting political pressure in 2015, the federal government allocated a nominal amount for the western route in the 2015-16 PSDP.

Now let us come to the government’s claims that the revenue generated from the motorway on the eastern route will be used to upgrade the western route to become a four-lane and ultimately a six-lane motorway. Railway tracks will be laid from Gwadar to Peshawar passing through Quetta and DI Khan.

First, there are no credible guarantees that these commitments will be duly honored, especially given the long time horizon — 15 years — it involves. If history is any indication, complacency will creep in and the urgency and motivation, if any, to upgrade the western route will wane once the eastern route becomes functional. The federal government will keep fabricating excuses to delay the up gradation of the western route. Fiscal constraints and political crises of one or the other type will continue giving it plausible cover. Protesting voices from smaller provinces will be coerced into silence by appeals to ‘patriotism’ and ‘India’s malicious designs over the project’.

Secondly, even if the credible commitment problem is somehow resolved, the up-gradation of the western route at a later stage is unlikely to alter the position of the eastern route as the primary route of the corridor. The western route will at best play second fiddle to the eastern one. Once the eastern route with its superior infrastructure and geographical proximity to the developed and prosperous urban centers takes the lead as a result of the initial preferential treatment it has received from the federal government, it is likely to stay ahead of the competing routes because of positive feedbacks and increasing returns to scale. Over time, development choices will be constrained within a progressively narrower range of possibilities that will tend to preserve the status quo. This is known as path-dependence, which among other things, partially explains the persistence of regional disparities. Nevertheless, the concept does not rule out the possibility of breaking out and establishing new paths, especially in the beginning of a process. The CPEC offered the government the formative moment to break out and create new paths of economic development by prioritising its under-developed regions. Unfortunately, the ruling elite have not taken advantage of this opportunity.

Published in The Express Tribune, January 22nd,  2016.

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Courtesy: The Express Tribune

International Assessment Report

Pakistan’s struggle to go green while CPEC coal power plants continue to grow

Executive Summary

China and Pakistan have a long-standing economic and political relation. Which has developed stronger with time, establishing China Pakistan Economic Corridor (CPEC) to honor both countries’ economic relations with each other. This project is an important part of China’s One Belt One Road Initiative and while it may provide economic opportunities, on a broader level it is damaging local climate security (Ascensao et al., 2018).

The environment is directly aligned with CPEC as the projects have an impact on the country’s air quality, climate change, noise pollution, and waste management (Asees, A, M. and Ali, Y., 2019). However, to meet Pakistan’s energy shortages, Pakistan’s previous Prime Minister, Nawaz Sharif agreed to construct coal-based power plants, neglecting the environmental cost. Pakistan’s National Electric Power Regulatory Authority (NEPRA) expects that the coal power projects under CPEC will increase the country’s coal-fired generation capacity to 20 percent by 2025. This particular development will hamper Pakistan’s efforts to achieve Sustainable Development Goals (SDGs) 2030 and in procuring carbon credits.

Pakistan aims to produce 30% of its energy through renewable sources by 2030 (WWEA 2019). However, there is an immediate need to negotiate project deals with China or to introduce green energy sources to achieve the goal by 2030. Pakistan revised its Alternative and Renewable Energy policy in 2019 that aims to reduce carbon emissions by developing a sustainable, efficient, and competitive power market while promoting ARET technology and manufacturing capabilities (AEDB 2019). Despite that, it does not include CPEC coal projects that directly harm the environment which calls for effective strategies for favorable environmental sustainability (Ali et al., 2018). In order to protect Pakistan’s environment, the dependency on fossil fuels must be reduced and the Kyoto protocol must be followed.

Pakistan must develop policies to maximize the share of renewable energy sources to mitigate the carbon emissions and energy crisis rather than harness indigenous coal for power production (Solangi et al., 2019). There are multiple ways to achieve clean production of energy, even if it involves coal projects. The first step has to be the reregulation of government and federal environmental agencies and secondly by using low carbon advanced technologies that can help achieve sustainable methods of coal energy production. To curb the immediate impact of coal power plants, a comprehensive management strategy must be initiated.

Summary of the Problem

Coal-fired energy has documented negative impacts on the environment and human health. In order to tackle climate change in Pakistan, the relevant Energy and Development Ministries in the country must cooperate with Federal ministers in revising and negotiating energy policies. There is an immediate concern that the operationalization of coal power plants under CPEC shall directly have an adverse effect on Pakistan’s biodiversity, water, and air (Zhang et al.2017; Huang et al.2017). However, it is important to note that Beijing has time and again emphasized green development, but under CPEC there is a disconnect between coal power generation and green energy (Downs., E, 2019). China uses coal power plants based on sub-critical and supercritical technology but none of the plants use Ultra-supercritical technology which China itself has mastered and acquired in the 1990s from the West (Siddiqui 2018). Also, none of the coal power plants deploy Carbon Capture & Sequestration technologies, which allow CO2 to be removed during emission and be stored in the ponds or grounds (Siddiqui 2018).

Policy Recommendations & Explanation


The China-Pakistan Economic Corridor (CPEC) coal-fired power plants, which were introduced in Pakistan to overcome energy shortages, have exacerbated environmental conditions. Consequently, the re-evaluation of environmental and production costs of current and prospective CPEC projects are crucial for Pakistan to secure a sustainable future.

The first and second recommendations highlight the significance of advanced technology (i.e. Carbon Capture and Storage (CCS) and ultra-supercritical technology) for continued utilisation of coal-fired power plants in Pakistan. Although the estimated cost to incorporate CCS technology in existing coal-fired power plants is $53/tonne, the retrofitting of CCS reduces CO2 emissions more than 36 times (Ishaque, 2017), thus demonstrating that the environmental benefits outweigh the actual cost. However, if the cost of retrofitting CCS and importing green technologies are considered high, the government of Pakistan should press for locally produced clean technology.

Funds from international organisations like the Asian Development Bank and the United Nations can help achieve this objective (Rashid et.al, 2020). Additionally, the involvement of local industries and professionals (researchers and scientists) can encourage the development of CCS technology locally. This is effortlessly achieved through expansion programmes, proposed by the government, which recruit knowledgeable professionals to exchange ideas on efficient CCS development. With local manufacturing firms offering their assistance and services (Huenteler et. al, 2016) Pakistan’s economy will also experience positive growth.

Furthermore, the implementation of advanced technology that regulates air pollution such as Pressurised-Fluidised-Bed Combustion (PFBC) is crucial for the continued utilisation of coal-fired power plants. Current CPEC coal- fired power plants exploit outdated and inefficient technology (i.e. subcritical and supercritical) which are banned in many countries. Therefore, to safeguard healthy air quality standards in Pakistan, local government officials should engage in negotiations with China to incorporate ultra-supercritical technology – a technology that has been already mastered by China – into the existing coal-fired power plants (Siddiqui, 2018).

The third recommendation in the policy brief emphasizes the need for re-regulation of government and federal environmental agencies. For example, the alleged involvement of Pakistan Environmental Protection Agency (Pak-EPA) officials in irregular and corrupt practices such as issuing No Objection Certificates to industries in exchange for bribes have aggravated Pakistan’s environmental conditions (Anwar, 2015). Although the 1997 Pakistan Environmental Protection Act enforces the conduct of Environmental Impact Assessments (EIA), the Pak-EPA displays insufficient or poor understanding of the EIA process resulting in obscure evaluations of CPEC coal-fired power plant projects (Baloch, 2018). Therefore, it is imperative that government officials be more selective in hiring competent experts to conduct EIAs to uphold integrity and maintain the quality of these assessments, consequently improving the environment.

Additionally, there are no stipulated legal conditions for Strategic Environmental Assessments (SEAs) to be performed for CPEC projects. SEA is a participatory and analytical approach to evaluate environmental implications in plans and policies while taking into consideration social and economic aspects. It is supposedly more efficient than EIAs as it cites recommendations that encompass environmental-related challenges. For instance, feedback and recommendations (i.e. impose carbon taxes) in the SEA from Rwanda’s energy sector have been incorporated in the country’s policies to lessen environmental issues (Seman et.al, 2015). Hence, it is appropriate to utilise the SEA in CPEC coal-fired power plant projects in Pakistan.

The final recommendation proposes that a central authority be appointed to supervise the implementation of recommendations outlined in EIAs and/or SEAs for CPEC coal-fired power plant projects. The selection committee should adhere to stringent requirements in the appointment process and include external representatives (i.e. representatives from International Governmental Organisations) to reduce bias and corruption, consequently alleviating environmental concerns in Pakistan while generating economic and social benefits.

The Effects of the China-Pakistan Economic Corridor on India-Pakistan Relations

The Effects of the China-Pakistan Economic Corridor on India-Pakistan Relations


The China-Pakistan Economic Corridor: Regional Dynamics and China’s Geopolitical Ambitions

The Chinese plan to invest $46 billion dollars in Pakistan to strengthen the China-Pakistan Economic Corridor (CPEC), announced by President Xi Jinping during his April visit to Islamabad, is remarkable for its size and scope. The plan has the goal of providing a direct link between the Paki5tani port at Gwadar and the city of Kashgar in China’s Xinjiang Uyghur Autonomous Region, and has sparked a flurry of commentary. The size of the plan far exceeds total U.S. aid to Pakistan since 2002 and dwarfs Pakistan’s generally paltry FDI figures. The decision by
China to make such a high-profile investment in its long-time partner is indicative not only of the enduring regional dynamic5 that have compelled the two countries’ alliance but also of China’s increasingly global ambitions. While the details of the CPEC have been discussed and debated at length, the geopolitical factors underpinning China’s decision to invest so heavily in its troubled neighbor merit further examination.

The “All-Weather Friendship” Close relations between China and Pakistan are certainly nothing new and are generally framed in terms of the two countries’ mutual rivalry with India. Indeed, this strategic triangle has been the greatest impetus for Beijing and Islamabad’s “all-weather friendship,” which extends to the diplomatic, economic, and military realms. China has proved to be a reliable alternative for Paki5tan to the United States in providing military assistance, including support for its nuclear program. The two states have collaborated on major infrastructure projects in Pakistan in the pa5t, including Gwadar Port and the Karakoram Highway—both of which will play essential roles in the proposed economic corridor. The Pakistan-China relationship, for all its rhetoric, is also increasingly uneven. For instance, while China i5 the number one source of imports to and number two destination of exports from Pakistan, trade with Pakistan accounts for a negligible portion of the Chinese economy. The gap between the two countries extends to popular perceptions: while a LOUIS RITZlhGER was a Bridge Award Fellow with the Political and Security Affairs group at the National Bureau of Asian Research. He holds an MA in Conflict Resolution from Georgetown University.

NBR Commentary • August 5, 2015

the overwhelming majority of Pakistanis view China favorably (in part, at least, the result of relentless government campaigns extolling the strength of the two countries’ friendship), Chinese tend to view Pakistan with far greater ambivalence. Finally, while Pakistan remains stubbornly fixated on India and mired in internal strife, China is a growing world power with correspondingly global ambitions. This last dynamic is particularly important in understanding the motivations and goals of the CPEC project.

Project Goals
The motivation5 behind China’s promised investment in Pakistan are primarily threefold, in order of global relevance: providing economic support to a long-time ally and strategic hedge, facilitating trade, and building linkages to the west by which China can expand its influence. China’s most parochial motivation for the CPEC is to provide economic support to a flagging ally struggling with internal instability. Pakistan and China, as mentioned, have historically viewed each other as balances viS-a-vis their shared rival, India. Now, with the United States
explicitly turning its attention toward India to counter Chinese regional influence, and with India’s economy primed to grow, it is logical that Beijing would seek to apply a formidable counterweight. Pakistan’s previously announced purchase of eight submarines from China is a more overt manifestation of thls dynamic. The plan’s emphasis on energy project5, to which $37 billion is said to be devoted, is particularly pertinent for Pakistan, which has been struggling with an acute energy crisis for much of the past decade. Moreover, China has real cause to be
concerned about Pakistan’s susceptibility to terrorism and insurgency. Elements of China’s own Muslim Uyghur insurgency in its westernmost Xinjiang Uyghur Autonomous Region are reportedly tied to extremist networks in Pakistan and use the country’s lawless western regions as a base of operations. Beijing hopes that a massive economic infusion will promote economic growth and stability both at home and abroad, while strengthening its struggling ally.
China’s second interest in the CPEC is its potential to diversify energy trade routes to and from the Middle East. In recent years, China has worked hard to develop linkages to the energy-rich Central Asian states as a way to reduce its dependence on imports through the Indian Ocean and South China Sea, regions where a strong U.S. naval presence could allow for blockades at choke points, such as the Strait of Malacca, in the event of a confrontation between the two powers. The CPEC intends to make full use of the Chinese-constructed and operated Gwadar Port, situated along
the Strait of Hormuz in Pakistan’s western Baluchistan Province, as the access point by which energy shipments could arrive and be sent through Pakistan via proposed pipelines, thus bypassing easily disrupted shipping lanes. The famed Karakoram Highway, linking Pakistan and China via the Karakoram mountain range, is also scheduled to be upgraded. In addition, China has agreed to pay for the Pakistani portion of the oft-delayed Iran-Pakistan natural gas pipeline. Indeed, the promise of a Chinese-built economic corridor likely played a central role in Islamabad’s decision to avoid antagonizing its energy-rich western neighbor by remaining out of the Saudi-led coalition in Yemen, de5pite a history of close military ties to Riyadh.
These reasons alone, however, do not justify such a massive investment in a single country facing as many challenges as Pakistan. China’s geopolitical goals are increasingly global, expanding beyond its immediate neighborhood, and the decision to announce its massive investment in the CPEC is a clear indication that Beijing views Pakistan as an important partner in meeting its ambitious economic and political goals. China view5 its investment in Pakistan, particularly its goal of a rail corridor between the two countries, as the “flagship project” of its “One Belt,
One Road” initiative. This initiative seeks to link China’s economic partner5 in Southeast Asia to Europe by means of overland and maritime trade routes, including key Middle East energy resources and emerging African markets. Pakistan, by virtue of its status as a long-term

2 NBR Commentary • August 5, 2015

ally and its geographic position linking western China to sea routes through the Middle East, Africa, and, perhaps most importantly, Europe, could serve as a central crossroad5 for Beijing’s expanding global ambitions. The potential for Gwadar to be u5ed in support of future Chinese naval operations is also very real, although the nature of this usage is the source of ongoing debate. Regardless, when viewed in the context of China’s broader strategic aims, it is clear that the ambitions behind the CPEC go far beyond strengthening bilateral ties.

Implications and Recommendations
The Chinese plan to invest an enormous $46 billion into the planned CPEC clearly has implications for U.S. policymakers, particularly when viewed in light of Beijing’5 apparent long-term strategic objectives. That being said, it is important that decision-makers understand that a plan of this scale inevitably faces equally significant obstacles, not least of which are Pakistan’s own deteriorating security environment and complex domestic political dynamics. Furthermore, the evolving regional landscape presents U.S. strategists with opportunities, as well as challenges, to
ensure that our interests remain protected.
For all of their fanfare, the announced investment projects face significant hurdles, including a fractured Pakistani political environment, in which an apparent change in the CPEC route has already sparked protests from local and provincial leaders in Pakistan’s underdeveloped western provinces of Baluchistan and Khyber Pakhtunkhwa. Given both countries’ penchants for opacity, corruption appears to be an inevitable challenge. Additionally, the fact that Chinese companies, employing primarily Chinese workers, will carry out many of the projects may only serve
to increase political resistance. While navigating political turmoil is not particularly unusual in a development context, the ongoing insurgency in Baluchistan, where separatists have targeted Chinese workers in the past, and Pakistan’s continuing struggle with Islamic extremist networks present an enormously challenging security environment. Pakistan’s early commitment to establish a 12,000-man security force to protect Chinese workers is an indication of the seriousness of the challenge. An attack on Chinese civilians by militants with links to Pakistan could throw a wrench in diplomatic relations, as it has in the past. That being said, even if many of the proposed projects are not completed (which is probable), the impact on Pakistan is likely to be significant—$46 billion is an enormous figure. More importantly for U.S. policymakers, however, is the message that the proposal sends regarding the sincerity of China’s intentions to utilize Pakistan as a means by which to expand its global influence. This obviously presents challenges for the United States—challenges that are best met by continuing to engage with regional partners (including India) and allies, while reaffirming commitments to bolstering the U.S. presence in the Asia-Pacific.
Improving U.S. relations with Iran, particularly now that a nuclear accord has been reached, could be an important element in promoting regional stability while building linkages across the South Asian subcontinent. As mentioned, China has already announced an agreement to build a natural ga5 pipeline from Iran to Pakistan, and Washington would be wise to engage with Tehran to work toward expanding energy trade between Iran, Pakistan, and India. Promoting energy linkages between South and Central Asia, in addition to the stalled Trans-Afghanistan pipeline, can be an important step toward reducing Central Asian reliance on Russian and Chinese markets by providing alternative markets for the region’s energy exports. Opening diplomatic channels in the region will also be vital to ensuring long-term stability in Afghanistan—an interest Beijing shares. China’s potential to play a role in facilitating dialogue between the Afghan Government and the Taliban was on display in recently reported meetings between representatives of the two parties in Urumqi.

3 NBR Commentary • August 5, 2015

Finally, although U.S. policymakers should not simply accept platitudes regarding shared U.S.-China interests at face value (as has been demonstrated, Chinese interests go far beyond Pakistan’s stability and economic growth), this does not mean that diplomats and defense officials should not explore areas of trilateral cooperation, including in the field of counterterrorism. The United States, however, must not be 5een as complicit in the unjust and counterproductive marginalization and oppression of China’s and Pakistan’s respective Uyghur and Baluch minorities. China’s planned investment in Pakistan is motivated by an array of factors, including strengthening a useful regional ally and building advantageous trade routes that bypass potentially hostile waters. Most importantly, however, is Pakistan’s utility in furthering China’s growing power ambitions. For U.S. policymakers, this will require further rebalancing to the Asia-Pacific, solidifying old alliances and building new partnerships while finding creative
methods to build regional linkages that support U.S. interests.

The views expressed are those of the author.

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The China-Pakistan Corridor: a transit, economic or development corridor?


The China-Pakistan Corridor: a transit, economic or development corridor?

The China-Pakistan Economic Corridor: an assessment of potential threats and constraints

The China-Pakistan Economic Corridor: an assessment of potential threats and constraints


China and Pakistan have developed strong bilateral trade and economic ties and cooperation over the years. China has gradually emerged as Pakistan’s major trading partner both in terms of exports and imports. Bilateral trade and commercial links between the two countries were established in January 1963 when both signed the first bilateral
long-term trade agreement (Ministry of Finance, 2014:126). Under the Free Trade Agreement (FTA) between the two countries – signed on November 24, 2006 and implemented from July 1, 2007 , Pakistan secured market access for several products of immediate export interest.’ Later, both countries signed the FTA on Trade in Services on February 21, 2009 that became operational from October 10 that year (Ibid).

According to statistics provided in Pakistan Economic Survey 2013-2014, the volume of trade between Pakistan and China has increased from US$ 4.1 billion in the year 2006-07 to US$ 9.2 billion in 2012-13, representing an increase of 124 percent. While China’s exports to Pakistan increased by one percent during this period, Pakistan’s exports increased by 400 percent from around $600 million in 2006-07 to $2.6 billion in 2012-13. As a result, China’s
share in Pakistan’s total exports has gradually picked up from four percent in 2008-09 to 10 percent during the fiscal year 2013-14.2

The China-Pakistan Economic Corridor (CPEC) is expected to further strengthen trade and economic cooperation between the two countries. Chinese Premier Li Keqiang emphasized the construction of the CPEC during his May 2013 visit to Pakistan (Tiezzi, 2014). The incumbent Pakistani government has also shown much enthusiasm for the project since then. The corridor will connect Gwadar Port in Balochistan (Pakistan) to Kashgar in north-western China, which will make Gwadar not only fully operational but also a significant deep sea port in the region.
Opened for operations in 2007, the control of Gwadar Port was transferred to China’s state-owned China Overseas Ports Holding in February 2013. Since then, Gwadar is undergoing a major expansion to turn it into a full-fledged, deep-water commercial port (South China Morning Posf, 2014). When the corridor is constructed, it will serve as a primary gateway for trade between China and the Middle East and Africa.3 The corridor is expected to cut
the 12,000-kilometre route that Middle East oil supplies must now take to reach Chinese ports (Ibid).

‘These include cotton fabrics, blended fabrics, synthetic yarn and fabrics, knit fabrics, home textiles like bed-linen etc, minerals, sports goods, cutlery, surgical goods, oranges, mangoes, industrial alcohol, etc.
2 For details see chapter 8 of Pakistan
Economic Survey 2013-2014 available at
The whole project is expected to be completed by 2030, whereas related short-term projects including motorways and energy projects are to be finished by 2017-2018.

The China-Pakistan Economic Corridor

Besides meeting China’s needs in energy and developing its far west region and upgrading Pakistan’s economy, the CPEC is expected to benefit the people of countries in South Asia, contributing towards maintaining regional stability as well as economic integration (China Daily, 2013).
As cited earlier, the CPEC is a comprehensive development program that entails the linking of Gwadar Port to China’s northwestern region of Xinjiang through highways, railways, oil and gas pipelines, and an optical fiber link. Major physical infrastructure to be built includes 2,700-kilometre highway stretching from Kashgar to Gwadar through Khunjrab, railways links for freight trains between Gwadar and Khunjrab linking to China and having
possible regional connectivity with Afghanistan, Iran and India, and the Karachi-Lahore motorway.
The project will also undertake the revival and extension of the Karakorum Highway that links Xinjiang with Pakistan’s northern region Gilgit—Baltistan and Khyber Pakhtunkhwa.4 Besides physical links connecting Pakistan and China, the project also envisages establishing several economic zones along the corridor. Also, an Energy Planning Working Group of the CPEC has been established that will undertake fast-track implementation of power
projects related to the CPEC. Those projects of 21,690 MW power productions will be undertaken
with the assistance of China under the CPEC plan (Pokis/an Today, 2014).
This report assesses potential threats and risks that could affect the implementation of the CPEC project in terms of insecurity and violence that pervade Pakistan, internal political and economic constraints, and also global and regional geostrategic impediments. The purpose is to understand and evaluate Pakistan’s security, political and economic environment and regional geostrategic dynamics in the medium to long term to explore feasibility prospects for the corridor and also to manage potential threats, if any, that could hamper the implementation. Most
importantly, the report discusses the security aspect in detail in which the probability of threats vis-ñ-vis extremist militancy, nationalist insurgency and criminal violence are analyzed with the main focus on areas across Pakistan which will be traversed by the China-Pakistan Economic Corridor.

1. Political and economic constraints

Although Pakistan regards China an “all-weather friend” and bilateral relations between the two countries have never been uneasy over the course of history, yet it is important to evaluate the variables that can affect Pakistan’s political and economic capacity and response to implement the elements of the larger CPEC project over longer periods of time. Important among these variables are:

l) Pakistan’s political stability and policy consistency; and

2) The present situation of Pakistan’s economy and future scenarios.

With regard to the first variable, a positive aspect is that there is almost consensus among Pakistan’s political parties on maintaining friendly relations with China which suggests that in principle there should be no major political impediment in the way of the construction of the China-Pakistan Economic Corridor. With an exception of minor segments among nationalist parties in Balochistan,5 Pakistan’s regional parties look towards China in a
positive manner to preserve bilateral ties. Similarly Pakistan’s military 4 The highway was started in 1959 and completed in 1979.
Some Baloch nationalists believe that mega projects in Balochistan such as Gwadar Port are not providing due share or benefit to the Baloch people. In that context, too, it is not specifically an anti-China sentiment on their part rather it is their anti-mega projects narrative that makes nationalists aggrieved with Chinese involvement in Balochistan’s development projects.

The China-Pakistan Economic Corridor establishment, which is also a key stakeholder in policymaking processes in Pakistan, considers China a trusted and valuable partner in bilateral military, economic and strategic areas of engagement and cooperation. Every political party that comes into power in Pakistan holds frequent high-level meetings with the Chinese government to discuss the political and strategic prospects that are helpful in strengthening bilateral relations and cooperation. Nor have there been high-level bilateral exchanges of
military officials between the two countries less frequent.

Also, Pakistani and Chinese geostrategic concerns have historically remained largely converged around many common areas of strategic and bilateral interests. The relationship between the two countries mainly hinges on four shared areas of interest that include ‘economic cooperation, energy security concerns of both countries, shared internal security concerns, and largely converging geostrategic interests’ (Mezzera, 2011).

All these factors indicate that a change of government in Pakistan is less likely to reverse or halt the CPEC project as successive future governments are expected to maintain consistency in Pakistan’s foreign policy towards China and also policy on bilateral trade and economic engagement. For example, the incumbent Pakistan Muslim League-Nawaz (PML-N) government in Pakistan restarted the country’s political and economic engagement with China from the point where the outgoing Pakistan People’s Party (PPP)-led government had left it.

At the same time, as the revised alignment of the corridor, or eastern alignment which will be discussed at length later in the report, will not run through most parts of Balochistan and Khyber Pakhtunkhwa (KP) as initially planned, some analysts are of the view that it would be difficult for the federal government to muster political ownership for the CPEC project from all the provinces.6 As the new CPEC route will largely pass through Punjab, the political leadership of Balochistan and KP may view their provinces as being deprived of the development and employment opportunities the CPEC will bring with it. However, the government claims it has not abandoned the original western route, which will be constructed later, and that the decision to first construct the eastern alignment was based on financial and security reasons.

Apart from that, long-term political stability will be required in Pakistan to smoothly implement projects such as the CPEC. In the past, Pakistan has faced many phases of political instability and turmoil that weakened the country’s development roadmap and also affected policy consistency. It was a very promising development for the country’s political stability that a democratically elected government completed its five year term and a peaceful transition of power happened after the 2013 elections. But the current government now faces a political crisis after just 14 months of being in power. This crisis unfolded itself after two political parties – Pakistan Tehreek-e-Insaaf (PTI) led by Imran Khan, and Pakistan Awami Tehreek (PAT) led by a religious scholar Tahirul Qadri – started their protests and sit-ins
in Islamabad on August 14. Apart from certain other demands, both parties demanded the resignation of the prime minister. While the former is a political stakeholder having representation in the National Assembly and also heads the coalition government in Khyber Pakhtunkhwa, the latter had not contested the 2013 election and does not have considerable electoral strength. The PTI alleges the ruling PML-N of rigging in elections and demands fresh elections under a ‘neutral’ interim set-up. Nonetheless, the PAT advocates a new political system that ensures ‘true and participatory democracy.

6- Author’s interview with Fazlur Rehman, executive director, Pakistan Council on China, Islamabad, October 2014.

The China-Pakistan Economic Corridor

The ongoing political instability has already caused huge losses to the economy besides distracting the political leadership from other matters of vital importance related to governance, terrorism, policymaking, and implementation of policies. Certain important visits to Pakistan of heads and officials from different countries and also international organizations including the International Monetary Fund (IMF) were either deferred or shifted to locations outside Pakistan in the summer-autumn of this year.

As far as the second variable is concerned, economic growth and development are linked to political stability to a great extent. At present, Pakistan’s economic outlook, although not bright, seems positive and improving. On August 18, 2014, the IMF raised its growth forecast for Pakistan to 4.3 percent for the current fiscal year, up from 4 percent (Daily Times, 2014). In the absence of certain major political crises and policy breakdowns, it would be safe to say that the country’s economy is right on track and will improve gradually.

Put it another way, Pakistan can provide the required funds and facilities for the CPEC project over a longer period of time, if there is no major political conflict and no economic meltdown. The government has already allocated over Rs73 billion as the budget for the Public Sector Development Program (PSDP) to execute development projects under the CPEC during the current fiscal year. Most of it this will be spent on the construction of Karachi-Lahore motorway and connecting roads and for land acquisition and relocation of utilities (Zafar, 2014). But in the case of a prolonged political crisis and economic meltdown gripping the country, such yearly and periodic allocations for the project could be disturbed causing delays to the project outcomes beyond the set targets.

The China-Pakistan Economic Corridor project needs about $32 billion of investment and loans for the project are expected to come mainly from Chinese banks and corporations. For that purpose, the Federal Minister of Planning, Development and Reform Ahsan Iqbal and Punjab Chief Minister Shahbaz Sharif held several meetings on their three-day visit to China in July 2014 with the Chinese National Development and Reform Commission, National Energy Administration, China Development Bank, Industrial and Commercial Bank of China, Exim Bank, and heads of the  Chinese corporate sector (Ibid).

Secondly, the corridor will be largely built on BOT (build-operate-transfer) basis. As a result of Chinese financing loans, the project will be completed by Chinese companies, especially state-owned enterprises in China. It is expected that the project will be financially viable for these companies because the revenues generated by the project through BOT-related facilities would cover its cost and provide sufficient return on investment. Under BOT
arrangements, Chinese companies will also receive concessions from the government to finance, design, construct, and operate the designed projects as agreed in the concession contract, or BOT. The government may also provide support for the project in form of provision of the land.

2. Geostrategic dynamics

The CPEC is part of China’ efforts meant to strengthen its trade and commerce connectivity with different regions of world. In September 2013, Chinese President Xi Jinping emphasized reviving the ancient trade routes connecting China, Central Asia and Europe through developing three main corridors through southern, central and northern Xinjiang, which connect China with Russia, Europe and Pakistan (Jia, 2014). Also, the Chinese have recently increased focus on the Bangladesh-China-India Myanmar corridor that would provide China’s landlocked Yunnan province access to the Bay of Bengal (Chowdhury, 2013).

The China-Pakistan Economic Corridor to pass through While China’s prime focus in constructing these corridors seems to strengthen its trade and economic connectivity with countries in the region and beyond primarily to fulfill
its soaring energy needs and enhance exports, it is expected that Pakistan could emerge as a hub of commerce and trade in the region with the construction of the CPEC that would entail establishing several economic and industrial zones and physical road and railway links connecting Pakistan and China. As the corridor also anticipates having regional connectivity with India and Afghanistan-although it is still too early to comment whether the regional element of the CPEC will become operational or not—it could also enhance regional economic and trade cooperation, which in turn would contribute towards regional peace and stability.

Gwadar holds central place in the utility of the China-Pakistan Economic Corridor because without making the Gwadar Port fully functional, it would be difficult for China to see the anticipated corridor as an energy corridor that appears as one of its main objectives behind the construction of the CPEC. Located near the Strait of Hormuz, which channels about one third of the world’s oil trade, Gwadar could play a key role in ensuring China’s energy security as it provides a much shorter route than the current l2,900km route from the Persian Gulf through the
Strait of Malacca to China’s eastern seaboard (Chowdhury, 2014).

However, there is the view that the construction of the CPEC will ‘place Gwadar on the matrix of intense geo-strategic competition’ (CPGS, 2014). It has been said that Gwadar will also put China and Pakistan in a strategically advantageous position along the Arabian Sea compounding already existing Indian concerns that stem from ‘China’s involvement in nearby ports such as Hambantota in Sri Lanka, Sittwe in Myanmar and Chittagong in Bangladesh’ (Chowdhury, 2014). One the other hand as India is also energy hungry it looks forwards to developing Iran’s
Chabahar Port. In October 2014, Indian Prime Minister Narendra Modi’s cabinet decided to develop Chabahar Port, which many believe is central for India to open up a route to landlocked Afghanistan, where it has developed close security ties and economic interests (Daze, 2014a), and to have access to energy-rich Central Asian States.

While Gwadar is located in Pakistan’s Balochistan province, where a nationalist insurgency is rife, Chabahar is located in the Iranian province of Sistan-Baluchistan where unrest prevails as well mainly due to certain violent Sunni sectarian-nationalist groups operating in the district. If peace and stability is not achieved in Afghanistan after the drawdown of international assistance forces, and countries in the region,

The China-Pakistan Economic Corridor mainly India, Pakistan, and Iran, engage in proxy wars, it could have some implications for internal security mainly for Pakistan, Afghanistan, and Iran that could impact development projects.
Pakistan has blamed India in the past for supporting Baloch insurgents from Afghan soil. Similarly, Iran has concerns regarding Jundullah-a sectarian insurgent group based and operating in Iran’s Sistan-Baluchistan province with free cross-border movement into and from Pakistan.
But analysts argue that while Pakistan has struggled to achieve security in Balochistan, Iran has the capacity to enforce its writ in Sistan-Baluchistan that suggests Chabahar could become functional earlier than Gwadar, if pursued by India and Iran fervently.

Nonetheless, China has devised a pro-active foreign policy vis-ñ-vis the Middle Eastern countries by using the United Nations as a platform to negate the ongoing war in the region (CPGS, 2014). As far as Iran is concerned, China wishes to resolve the Iranian nuclear issue through peaceful political settlement. Moreover, when it comes to ties between Pakistan and India, China has played its part (Ibid). At the same time, for China, Pakistan’s geo-strategic position is very crucial as it serves as a window into the Middle East. Meanwhile, it has already expanded its trade, infrastructure and energy links with most of the Central Asian Republicans (Pakistan-China Institute, 2014). But insecurity and instability in Afghanistan are a major source of concern not only for China but also other neighboring countries including Pakistan, India and Iran. China is already the biggest economic investor in Afghanistan
with about $7.5 billion investment (Ibid). China has recently enhanced bilateral and trilateral efforts aimed at strengthening regional cooperation and coordination. It hosted the Fourth Ministerial Conference of the Heart of Asia-Istanbul Process Beijing on October 31, 2014 with a view to promote security and stability in the Afghanistan, in
cooperation with its neighbors (Arif, 2014). China has also pushed the matter of Afghanistan’s future after the drawdown withdrawal to the top of the Shanghai Cooperation Organization’s agenda (Pakistan-China Institute, 2014).

While cooperation among all countries in the region, at least in terms of trade and economy, would be an ideal scenario with changing regional dynamics, there is a strong likelihood that persisting bilateral conflicts and an environment of mistrust will keep them polarized and part of alliances where Pakistan would certainly remain closer to China, with emerging regional dynamics having little impact on the construction of the CPEC and functioning of the Gwadar Port. But it still remains to be seen whether or not the CPEC and Gwadar could become instrumental in forging and enhancing regional coordination and cooperation, although they are designed to have regional connectivity with India and Afghanistan.

3.  Security-related threats

There are certainly security-related threats linked to the China-Pakistan Economic Corridor and while most might originate in Pakistan, the Xinjiang province in western China is also facing security threats from Uighur militants and the East Turkestan Islamic Movement (ETIM).
Uighur and ETIM militants have long sought shelter in Pakistan’s tribal areas along with the local militants. However, Pakistan’s security forces have fought foreign militants in North Waziristan Agency including ETIM and Uighurs in recent months with the commencement of the military operation Zarb-e-Azb which has also weakened the operational capacity of ETIM (Khan, 2014).
Furthermore, US drone strikes in various areas of FATA have also dented the group by eliminating a number of its leaders.

The security of the corridor is of crucial importance for Pakistan as well as China in order to further strengthen trade and development-related ties. It is feared that growing militancy will threaten the commencement of projects designed for the corridor. It will thus be a challenge for both countries to quash

The China-Pakistan Economic Corridor militant groups and their fighters along and across their borders. China also expects assistance from Pakistan in this regard. The presence of local and foreign militants in Pakistani tribal areas usually generates pressure on the government, therefore affecting bilateral relations (Rana, 2014).

Militant groups in Pakistan are relatively less hostile to China when compared to America and its western allies, but at the same time, they have targeted Chinese citizens, workers and engineers in past. The Uighur militants’ links with the Taliban in FATA pose a major threat to Chinese interests in Pakistan. An Uzbek- speaking militant leader Mufti Abu Zar al-Burmi recently released a video message directing all Taliban groups to carry out attacks on Chinese embassies and companies and kidnap or kill Chinese nationals (Rehman, 2014). The second source of threat to security could be Baloch insurgent groups who are against mega-development projects in Balochistan, including Gwadar Port currently being developed by Chinese companies.
Thirdly, the militant-criminal nexus in certain areas also poses a threat to Chinese engineers, workers and citizens in the form of kidnapping and robberies. In the past, there have been many incidents of kidnapping and killing of Chinese citizens working and living in Pakistan.

This part of the report discusses the nature and level of potential security threats to the China-Pakistan Economic Corridor, which can appear in different parts of Pakistan in form of protracted violence, terrorist attacks, kidnapping and criminal activities. The threat assessment for different regions-through which the CPEC will pass-is based on the frequency of terrorist attacks reported from these areas over the past few years, and also the presence of militant,
insurgent and criminal groups in those regions.

3.1 Geography of the CPEC

The CPEC is a huge project that will undertake the construction of highway and railway links running through most of Pakistan starting from Gwadar in Balochistan and culminating in Kashgar in western China, while passing through parts of Balochistan, Sindh, Punjab, Khyber Pakhtunkhwa provinces and Gilgit-Baltistan in northern Pakistan to reach the Khunjrab Pass and beyond to China.

Eastern alignment: Pakistan and China have decided to initially construct the eastern alignment of the corridor mainly due to two reasons: first, Chinese companies are reportedly willing to undertake the construction of the eastern alignment on a BOT (build-operate-transfer) basis, and secondly it is more secure compared to the western
alignment planned earlier. The eastern alignment will run through only a few areas of Balochistan and KP provinces where the security situation is more volatile compared to other parts of the country. This change in original planning earned some criticism from parliamentarians in these two provinces who thought the new alignment will deprive their respective provinces of development and employment opportunities that the CPEC brings (The News, 2014).
Senators from KP and Balochistan during a meeting of the Senate Standing Committee on Finance held in June 2014 said that the new corridor alignment [eastern] excluded many areas of their provinces and the new route largely passed through the Punjab (Ibid). The Federal Minister for Planning and Development, Ahsan Iqbal informed the senators that investors were unwilling to construct the western route on a BOT basis. He said the government had decided to construct the relatively more secure eastern route first with Chinese assistance and that it had not abandoned the original western route, which would be constructed later (Ibid).

The China-Pakistan Economic Corridor

The eastern alignment of the corridor originates from Gwadar, travels parallel to the Makran Coastal Highway eastwards (towards Karachi), and then after passing through parts of interior Sindh, and southern, central and northern regions of Punjab, it reaches Islamabad. From Islamabad, it extends to Haripur, Abbottabad, and Mansehra districts of the relatively peaceful Hazara Division in KP -this part of the corridor will also run through Muzaffarabad, the capital of Azad Jammu and Kashmir-and reaches Khunjrab after passing through Diamer and Gilgit areas in northern Pakistan. The corridor will also run through the Pamir Plateau and Karakoram Mountains. A link from Taxila through Peshawar and Torkhum will connect the eastern alignment of the corridor to Jalalabad in Afghanistan. Regional connectivity with India through the eastern alignment is designed to be provided through
the Hyderabad-Mirpurkhas- Khokhrapar-Zero Point link and the Wagha border, Lahore.

Western alignment: This was the original alignment which the government says it has deferred until the eastern alignment of the corridor is completed. According to the western alignment plan, the economic corridor (highway and railway) starts from Gwadar and runs through some southern and eastern districts of Balochistan (Khuzdar and Dera Bugti, respectively), and some districts in South Punjab to reach D.I. Khan in KP. From D.I. Khan, it further extends
to Islamabad and Abbottabad and from there onwards, the route is the same as in the eastern alignment. The western alignment will have an additional regional connectivity link to Afghanistan through Chaman and will connect to Iran through Quetta-Kho-e-Taftan link.

Karachi-Lahore Motorway: It will run from Karachi to Lahore through traversing interior Sindh (mainly Hyderabad, Dadu and Sukkur), and parts of south Punjab, including Raheem Yar Khan and Multan.

3.2 Potential security threats to CPEC in each geographical region of Pakistan

Pakistan faces diverse challenges to its security and stability, for instance, Taliban militancy in KP and the tribal areas, a nationalist insurgency in Balochistan, ethno-political violence in Karachi, growing religious extremism and radicalism, and the deteriorating law and order amid acts of terrorism and violence being reported from across the country almost on daily basis.

This prevailing environment of insecurity, militancy and violence can pose serious threats to the construction of the China-Pakistan Economic Corridor. As the level and nature of this threat is not uniform, it is a positive aspect that the finalized eastern alignment of the corridor runs through parts of the country that are relatively more secure with few exceptions.

As China and Pakistan have decided to initially construct the CPEC along the eastern alignment, this section of the report assesses the security, law order situation and militant landscape of the regions through which the Gwadar-Kashgar Highway and railways will run, also including areas to be traversed by the Karachi-Lahore Motorway.

Gwadar and Makran Coastal Highway!

‘All data and statistics used in this section are taken from the Pak Institute for Peace Studies’
(PIPS) database on conflict and security (http://san-pips.com/index.php ?action=db&id=1), unless
otherwise stated.

The China-Pakistan Economic Corridor

Summary: Baloch insurgents pose the key threat in Gwadar and the coastal belt; the Taliban and sectarian militants have minimum presence in this rrgion. Baloch insurgents can carry out Ion intensi fi attacks targeting the CPEC- linked installations and infrastructure and workers besides attempts at kidnappin gs. The level of threat is medium, Dnd needs sfringenf security meftsores.

The 653 kilometers long Makran Coastal Highway extends towards the east to link Gwadar with Karachi. This is where the Balochistan part of the CPEC will originate from and run similarly towards Karachi. Security threats to the construction of the CPEC and workers can also appear from neighboring northern districts of Gwadar and Makran Coastal Belt, e.g. Kech, Awaran and Lasbela. As the militant landscape of these districts is largely linked to that
of Panjgur and Khuzdar, too, it is pertinent to assess the security situation of this entire region spread over 6 districts.

A review of reported terrorist attacks between 2007 and July 2014 suggests that Kech and Khuzdar are the most volatile districts in this region. {See ChDrt 1) A worrisome factor is that Gwadar shares boundaries with Kech, a district where the activities and influence of Baloch insurgents has increased over the past few years. On the whole, 1,040 terrorist attacks took place in these six districts between 2007 and July 2014, representing 23 percent of
total attacks reported from Balochistan during that period. In other words, 23 percent of total terrorist attacks reported from Balochistan between 2007 and July 2014 were concentrated in six districts of Gwadar, Kech, Awaran, Panjgur, Lasbela and Khuzdar.

Targets hit in most of these attacks included security forces, civilians, political leaders, non-Baloch settlers and workers, gas pipelines and power pylons, railways tracks, and government installations and property etc.

Violent religious/sectarian and militant groups such as Lashkar-e-Jhangvi (LeJ) and the Tehreek-e- Taliban Pakistan (TTP) or its Balochistan chapter Tehreek-e-Taliban Balochistan (TTB) have very little presence and operational activities in Gwadar, Kech, Awaran and Lasbela, four districts that will have immediate proximity with the CPEC alignment. But religious extremist and violent sectarian groups have enhanced their presence and activities in Khuzdar that lies towards north of Lasbela and Awaran districts.

The China-Pakistan Economic Corridor

— That means the immediate threat to the CPEC in Balochistan is less likely to come from the Taliban or associated groups and sectarian groups such as LeJ due to their minimum presence in Gwadar and its immediate neighborhood. Another reason is the fact that such development projects have not been prime targets for religious extremist and sectarian groups.

However, most of the insecurity in terms of terrorist attacks and threat of kidnapping in Gwadar, Makran Coastal Belt and neighboring districts emanates from Baloch insurgent groups, mainly the Balochistan Liberation Front (BLF) and Lashkar-e-Balochistan (LB) while the Balochistan Liberation Army (BLA) and Baloch Republican Army (BRA) are also occasionally found involved in insurgent attacks reported from these four districts.

The BLF, led by Dr. Allah Nazar Baloch, is predominantly focused in the southern coastal Makran belt although it operates across Balochistan. The group represents disgruntled middle-class and lower middle-class Baloch youths. The LB led by Javed Mengal is concentrated in south-western districts of Balochistan (Panjgur, Gwadar, Kech, particularly Turbat) and also Khuzdar. It is suspected that the group was involved in terrorist attacks on the Chinese
Consulate in Karachi and a blast at the Lahore Railway Station in August 2012 (PIPS, 2013). The BLA and BRA are also active in parts of Gwadar and its neighboring districts particularly Panjgur and Kech.

As far as the security situation of Gwadar district and Gwadar coastline is concerned, the frequency of terrorist attacks in these areas in quite low compared to other regions of Balochistan. From 2011 onwards, Baloch insurgents have hit different targets in Gwadar at an average of nine attacks in 2013 or less than one attack a month. These targets range from security forces including Gwadar coast guards, non-Baloch settlers, state installations,
public and private property, and political leaders and workers etc.

— The drug peddlers, human traffickers, and criminal groups are also present in Turbat, headquarters of Makran Division, and parts of Gwadar. Also, the growing nexus of Baloch insurgents with Taliban-like groups and criminal networks has the potential to increase the overall security threat for Gwadar and its neighborhood. To curtail such a threat it is necessary to counter the Taliban, sectarian groups and criminals from across Balochistan so that they are not able to expand their outreach to Gwadar region.

Karachi and interior of Sindh*

Summary: The level of threat is medium in Karachi and very low in the interior parts of Sindh. With the presence of large numbers o/ militant, sectarian extremists and criminal elements in Karachi, there is a probability Of DttDCkS OH engineers and workers o/ the CPEC-related proJec/s and also security personnel deployed to provide security to the project sites and workers. Incidents of kidnapping too cannot be ruled out.

A security analysis of major areas of Sindh along the eastern alignment through which Gwadar-Kashgar highway and railways and Karachi-Lahore motorway will run reveals that major threats can emerge from Karachi whereas the level of threat in the interior of Sindh is quite low.

8Al1 data and statistics used in this section are taken from the Pak Institute for Peace Studies’
(PIPS) database on conflict and security (http://san-pips.com/index.php? action=db&id=1), unless
otherwise stated.

The China-Pakistan Economic Corridor

Between 2007 and July 2014, as many as 962 terrorist attacks took place in areas of Sindh through which the CPEC and Karachi-Lahore Motorway will run. Most of these attacks, 889, occurred in Karachi alone. Among 31 attacks reported from Hyderabad, most were low-intensity attacks carried out by Sindhi nationalists and others.

Most of these attacks targeted security forces and law enforcement agencies, civilians, Shia and Sunni religious communities, and political leaders and workers. A few attacks also targeted NATO supply vehicles. A considerable number of low-intensity attacks also hit railway tracks and trains, mainly in interior parts of Sindh.

Chart 2: Terrorist attacks in parts of Sindh where CPEC-linked projects will run (January 1,
2007-July 31, 2014)

Karachi has become hub of the Tehreek-e-Taliban Pakistan (TTP) and associated groups and sectarian militants such as Lashkar-e-Jhangvi and Sipah-e-Muhammad. While sectarian groups are largely engaged in sectarian violence-with an exception of Lashkar-e-Jhangvi that is also engaged in terrorist attacks on security forces and other targets being a key ally of TTP-most of the terrorist attacks including high profile are carried out by the TTP and associated

The ongoing security operation in Karachi has failed to break the network of militants in the city. Reports also suggest that criminals were mainly targeted in security forces’ surgical strikes going on in the city for several months now. There is dire need to launch a comprehensive operation against militants in Karachi because the TTP and its allies including foreign militants are well entrenched in the city, more than what is usually thought, mainly in areas of Gadap, Sultanabad, Gulshan-e-Buner, Manghopir, Sohrab Goth, Mauripur, Musharraf Colony, Usmanabad,
Steel Town, Sultanabad, and Orangi Town. The brazen attack on cargo terminal of Karachi airport in June this year provides enough evidence to suggest how militants have established their network and strengthened their operational capabilities in Karachi. It also highlights lapses in the state’s security and intelligence infrastructure.

The China-Pakistan Economic Corridor

— Also, Karachi can become more vulnerable after the military operation has been launched in North Waziristan. Taliban militants based in Karachi along with Sunni sectarian groups will be more than happy to welcome their fellow Taliban militants fleeing from North Waziristan.

— As far as parts of interior Sindh are concerned, in recent years religious extremism has been reported to be gradually rising there. The increasing incidents of persecution of religious minorities there suggest that interior Sindh, which historically and traditionally has been a land of peace and pluralism, is not safe anymore from the
onslaught of religious extremism and radicalism. Although the frequency of terrorist attacks has been quite low in interior parts of Sindh, yet few high profile attacks were reported from there in recent past including a lethal suicide-and-gun attack by a group of five militants on the regional headquarters of the Inter-Services Intelligence (ISI) in Sukkur in July 2013.

— While the presence and activities of militant groups have been quite low in parts of interior Sindh, through which the CPEC will run, threat to security of these areas has been gradually rising from Sindhi nationalist groups mainly Sindhu Desh Liberation Army. Sindhi nationalists have carried out some low intensity cracker attacks in recent months and years targeting state infrastructure such as railway tracks but their operational capacity and organizational strength are too weak to cause some heavy damage. Hence the threat from nationalists to security of interior parts of Sindh also remains low that can be easily managed with stringent security measures.

PunJab and Rawa Ipindi-lslamabad9

Summary: The overall threat level is low in those parts of Pun)ab and Islamabad from u›here the CPEC corridor will pass. Hornier sporadic incidents of violence including against the project-related fargefs such as sites, engineers, workers and security personnel cannot be ruled out completely. It is imperative to eliminate TTP’s sflpporf structures in Pen/afi to present high value and high intensity attacks in future.

Over the past eight years, starting from 2007, Lahore and Islamabad-Rawalpindi have faced maximum terrorist attacks and casualties compared to other regions of Punjab through which the CPEC-linked roads and railway links will pass. However, sporadic attacks have also been reported from other areas as illustrated in Chart 3.

Chart 3: Terrorist attacks in parts of Punjab and Islamabad where CPEC-linked projects will run
(January 1, 2007-July 31, 2014)

All data and statistics used in this section are taken from Pak Institute for Peace Studies’
(PIPS) database on conflict and security (http://san-pips.com/index.php? action=db&id=1), unless
described otherwise.

The China-Pakistan Economic Corridor

Targets for most of these attacks were security forces, civilians, and Shia and Sunni communities. Some attacks were also aimed at political leaders and workers, private property and NATO supply vehicles. A spree of terrorist attacks including lethal suicide attacks gripped Lahore and Islamabad-Rawalpindi after the 2007 Red Mosque siege and that continued for 2 to 3 years. Even after that time period, high intensity attacks have been reported in few other
cities of Punjab.

— The TTP has support structures in parts of Punjab in the form of groups like LeJ and also some Deobandi madrassas. These support structures have helped the TTP in past to carry out lethal attacks in the heart of Punjab, Lahore, Rawalpindi and Islamabad. But strong vigilance and surveillance of security and law enforcement agencies in Punjab have denied the TTP permanent operating bases or safe heavens. That keeps the security threat to the CPEC-linked projects and personnel in Punjab low.

— Secondly, the eastern alignment of the CPEC will run through those parts of Punjab which are relatively safer and tactically difficult for the free movement and entrenchment of militants. For instance, the CPEC alignment in southern Punjab (Raheem Yar Khan, Bahawalpur and Multan regions) will be located towards the east of the Indus
River and will be least vulnerable to security threats that could emerge from the western side of the River Indus. To the west of Indus certain areas are the hub of extremist groups and criminals gangs (D.G. Khan and Rajanpur, respectively) but also serve as districts where militants from Khyber-Pakhtunkhwa are found as it is the simplest entry- point into Punjab —
D.G. Khan through the Indus Highway and link roads is the route used. Also, to the west of the Indus, there is the presence of criminal elements, mainly in Kacha area of Rajanpur, an area that lies between the River Indus and the Indus Highway. These criminals reportedly have formed a nexus with LeJ and have been found involved in kidnapping and road robberies.

Areas in central and northern Punjab parts of the CPEC alignment are even relatively safer than south Punjab. Although Chart 3 displays a large number of terrorist attacks reported in Lahore and Islamabad-Rawalpindi between 2007 and July 2014, as mentioned earlier these cities were specifically targeted in the aftermath of Red Mosque operation of 2007. Also, most of these attacks were

The China-Pakistan Economic Corridor

orchestrated from outside and  terrorist infrastructures have minimal presence in these cities, although operational support exists. Another factor to be noted is that development projects and infrastructure schemes have hardly remained targets for militants in these and other cities of Punjab.

— Although it appears that security threats to the CPEC project in Punjab will be low and minimal, it is also important that militants have the capacity to orchestrate high value and high intensity attacks in those areas of Punjab from where the CPEC road and railway links will pass. It is imperative to ensure that the tribal militants’ support structures in Punjab are eliminated and strong surveillance and vigilance is maintained to prevent any major terrorist attacks. Police and intelligence agencies have a major role to play here.

Khyber Pakhtunkhwa and UK’

Summary: The threat level for the CPEC alignment in fhis region iS ftfso low because the Hazara Division o/ KP is relatively more secure and safer com militancy than other parts o/ the province. However, local Taliban militants in Mansehra, some of them linked with the TTP, could pose a security threat to u›orkers and engineers associated with the CPEC.

Parts of KP through which the CPEC will travel (Haripur, Abbottabad, and Mansehra) have traditionally been least violent when compared to other regions of the province. The presence of militant groups is also low in these areas, with the exception of Mansehra where local Taliban groups are operational but with minimum capacity to carry out major attacks without help and support from outside terrorist groups. Between 2007 and July 2014, as many
as 4,732 terrorist attacks took place in KP and only 52 of these attacks, or l percent, occurred in the three districts of Haripur, Abbottabad and Mansehra. Also most of these 52 attacks were concentrated in Mansehra alone; 4 in Abbottabad and 2 attacks took place in Haripur, respectively. (See Chart 4)


Chart 4: Terrorist attacks in parts of Khyber Pakhtunkhwa where CPEC-linked projects will run (January 1, 2007-July 31, 2014)

‘ All data and statistics used in this section are taken from Pak Institute for Peace Studies
(PIPS) database on conflict and security (http://san-pips.com/index.php? action=db&id=l), unless
otherwise stated.

The China-Pakistan Economic Corridor

As mentioned earlier, local Taliban militants in Mansehra, some of them linked with the TTP, can pose a degree of threat to workers and engineers with the CPEC, but the probability and intensity of such a threat is low.

— Abbottabad and Haripur have remained largely isolated from Taliban militancy in the province. However, the Taliban in the past have tried to make inroads into these areas. For instance, in September 2007, an attack on army’s mess building in Haripur had killed 20 soldiers.
Since no major terrorist attack has been reported from these two districts. Strict security measures are required to keep the TTP and other militants away from this region, and also to counter any threats that might be posed by local Taliban and extremist groups.

This part of the CPEC will also be linked to Muzaffarabad, capital of Azad Kashmir. Muzaffarabad has also remained peaceful over the years with the exception of a few attacks in the past; only three terrorist attacks occurred in the city between 2007 and July 2014, all in 2009. One of these attacks was a sectarian-related suicide attack that claimed 10 lives and injured 81 others. Another suicide attack had targeted am army barracks killing two soldiers, while the
third attack was a low intensity cracker blast that killed one person. 2009 was the year when reports started to appear in the media that the TTP was trying to make inroads into Muzaffarabad, but since then no such attacks have been reported; nor have any reports surfaced describing the TTP’s presence in the region.

Diomer and Gilgit!

Summary: The region has seen plenty of sectarian violence in past. Some high intensity attacks in recent years on security/forces and foreigners also revealed TTP and other militants’ outreach to these areas. However, the absence of militant bases and support sort/ores in Gilgit end Boffistan suggests the threat level to the CPEC in this region will below. However, sporadic attacks on the CPEC-linked sites and QC£SOt2Ne/ can not be ruled out.

” All data and statistics used in this section are taken from Pak Institute for Peace Studies”
(PIPS) database on conflict and security (http://san-pips.com/index.php? action=db&id=l), unless
described otherwise.

The China-Pakistan Economic Corridor

After passing through parts of KPK and Azad Kashmir as described earlier, the CPEC will run through Diamer and Gilgit districts of Gilgit-Baltistan. Sporadic terrorist attacks from the region in recent years, aimed at high value targets, attracted global attention and also raised concerns that Pakistani militants, mainly the TTP, in collaboration with the ETIM and Chinese Uighur militants would attempt to entrench themselves in this region. Other than
that most violent incidents reported from this region have been sectarian-related.

A total of 74 terrorist attacks were reported from Gilgit-Baltistan between 2007 and July 2014 – 7l from Diamer and Gilgit alone – out of which 55 were sectarian-related and only 16 were carried out by the TTP and associated militants and other groups. (See Chart 5)

Chart 5: Terrorist attacks in parts of Gilgit-Baltistan where CPEC-linked projects will run (January 1, 2007-July 31, 2014)

On June 23, 2013, militants killed 11 people including nine foreign tourists and two Pakistanis at Nanga Parbat tourists’ base camp near Bunar Nullah. The TTP spokesperson Ehsanullah Ehsan told media representatives through telephone calls that the group’s faction named Junud-e-Hafsa had carried out the brutal attack. He further said the killings were in revenge for US drone attacks and the killing of TTP chief, Waliur Rehman Mehsud (Khan, 2013). The Diamer attack also revealed that the nexus of the TTP, Al-Qaeda and the East Turkistan Islamic Movement (ETIM) could pose as a threat to Pakistan’s internal security and also that of China’s Xinjiang province.

— Later on August 6, 2013, three security force officials, including an army colonel, a captain and the Superintendent of Police in Diamer were shot dead in Chilas City (the district headquarters of Diamer) by the TTP militants. These officials were investigating the Nanga Parbat incident and the killing of foreign tourists by the militants (The News, 2013).
— On July 4, 2014, over three dozen militants wearing Pakistan Army uniforms stormed a police station in Diamer district. They took away 10 guns, three pistols, thousands of rounds, wireless telephone sets, police uniforms and other police personnel belongings (Damn, 2014b). Locals from Diamer suspected these attackers were associated with Taliban militants.

The China-Pakistan Economic Corridor

3.3 The state’s capacity and responses to maintain security and law and order Pakistan has the required capacity and security infrastructure to deal with potential threats to the CPEC project. The country has a huge security and law enforcement infrastructure comprising military, paramilitary including Rangers and FC, police and local
police forces such as the Khasadar force in FATA and Levies force in Balochistan. Additionally,
it has strong professional intelligence agencies. Sufficient sources and equipment for security, law enforcement and intelligence agencies would imply better standard. But with the threat of terrorism being non-conventional and asymmetrical, Pakistan needs more stringent efforts to deal with this threat.

Tribal militants against whom the Pakistani army has launched several military operations in the past, including latest military operation, Zarb-e-Azb – launched on June 15, 2014 in North Waziristan that is ongoing -would suggest a policy of containment of militancy, but much needs to be done in this regard. Initial reports following the launch of the military operation in North Waziristan suggested that foreign militants mainly those from Central Asia and
China were prime target of military strikes. Several militants belonging to ETIM and the Islamic Movement of Uzbekistan (IMU)-both groups along with the TTP have close links with Chinese Uyghur militants-have been killed in the military operation so far. The government and army have vowed to clear North Waziristan of all militants including local and foreign, so there is hope that these foreign militants from Central Asia and China will no more find sanctuaries and shelter. Some reports suggest many of them have already relocated to either Afghanistan and elsewhere or other parts of FATA and Pakistan. However, it has been established that many of their ’hideouts’ in Waziristan have been destroyed. This will certainly reduce security threats for the CPEC project emanating from FATA.

As far as Balochistan is concerned, the province is already under strict security scrutiny in the presence of the Frontier Constabulary, police and Levies. In recent months, attacks by ationalist insurgents and militants have decreased. The state’s security apparatus in Balochistan, if utilized effectively, is capable to deter any threats to CPEC-linked projects and activities.

However, there is an immediate need to address security problems in Karachi, which is a complex city where militants find many weak spots and spaces to hide, recuperate, recruit, plan and operate. The Rangers and police have carried out security operations in the city, but there is need to expand scope of this operation to eliminate all sorts of militants.

Law enforcement agencies, mainly the police can handle the security of the CPEC alignment in Punjab, Islamabad, KP and also Gilgit-Baltistan with the help of intelligence agencies. Coordination among different security, law enforcement and intelligence agencies will be vital to secure the route, construction and workers of the CPEC project.

Provincial police departments can take pre-emptive steps to ensure the security of Chinese engineers and others working on the CPEC-related projects. Some precedents were set in the recent past. For instance, the Lahore City Police established eight special security desks around the city in June 20l4for Chinese citizens employed in government, semi-government and private sectors (Express Trihone, 2014).

4. Conclusion

The China-Pakistan Economic Corridor

Long-term political stability in Pakistan is vital to smoothly implement the projects like the China-Pakistan Economic Corridor. In the past, Pakistan has gone through phases of political instability and turmoil that weakened the country’s development roadmap and also affected policy consistency. Similarly, if now or later, some prolonged political crisis and economic meltdown grip the country, the yearly and periodic budget allocations for the CPEC
project could be disturbed causing delays to the project outcome beyond set targets.

Although the prevailing environment of insecurity, militancy and violence in Pakistan can pose serious threats to the construction of the China-Pakistan Economic Corridor, the level and nature of this threat is not uniform across Pakistan. It is encouraging that the areas through which the finalized eastern alignment of the corridor will run are relatively more secure than those of the earlier planned western alignment, though with few exceptions.
The level of threat to the security of the CPEC project, including sites and personnel, is low along most areas of eastern alignment with the exceptions of Gwadar, the Makran Coastal Belt and Karachi, where threat level is assessed to be medium. At the same time, it is imperative to ensure stringent security measures along the entire CPEC alignment.

The China-Pakistan Economic Corridor

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The China-Pakistan Economic Corridor

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The China-Pakistan Economic Corridor


An assessment of potential threats and constraints.

China’s Constructive Role in Asia

Sultan M. Hali

CHINESE President Xi Jinping has made positive overtures for peace in the region as well as peace in the world. His meetings with US President Barrack Obama and British Prime Minister David Cameron as well as the other world leaders have been a one-point agenda: to shed rivalry and join forces to establish world peace. President Xi Jinping’s proposal has been devoid of rhetoric and based on genuine concern for the uplift of the less developed countries, which have been caught in the crosshairs of superpower contentions.
Believing that charity begins from home, China has endeavored to settle its disputes with its neighbors amicably through dialogue. Taiwan, which is a breakaway province of China and is expected to rejoin mainland China sooner than later, has never faced physical antagonism or threats from China. Instead, China is maintaining trade, tourism, and economic ties. The recent meeting between Chinese President Xi Jinping and Taiwan’s President Ma Ying-jeou on the
sidelines of a state visit by President Xi to Singapore, was an epoch making event. China’s reaching out to Taiwan speaks volumes for its policies of ‘live and let live’ and reunification of Taiwan and China.
In the near past, the unprovoked incursion of a US Naval warship in the territorial waters of China adjacent to the disputed Spratly Islands, did not raise tempers in Beijing, instead the US and Chinese navies held high-level talks and agreed to maintain dialogue and follow protocols to avoid clashes. US chief of naval operations Admiral John Richardson and his Chinese counterpart, Admiral Wu Shengli, during their meeting agreed on the need to stick to protocols established under the Code for Unplanned Encounters at Sea and confirmed that the scheduled port visits by US and Chinese ships and planned visits to China by senior US Navy officers will remain on track.
With the display of such maturity, South Asia, which unfortunately has become a hotbed of conflict and tension, necessitates sagacious counseling by peace loving China. Notwithstanding the strategic cooperative Sino-Pak partnership, one would expect China to take a neutral stand and urge India to accede to international and regional overtures for Indo-Pak peace talks. Both India and Pakistan are nuclear weapons equipped states and any armed conflict between them will spark the flashpoint which will be disastrous for the entire region. The world has stood by and observed China’s peaceful rise to development. India, which is also desirous of achieving the same level of development as China, has unfortunately adopted the path of confrontation with its neighbors. Such a jingoistic and belligerent attitude is not only contrary to principles of humanity but will also prove counterproductive towards India’s aspirations for prosperity, besides stunting the growth of its neighbors.
India’s industrial development and its energy requirements including the peaceful use of nuclear resources are understandable. US has favored India with a civil nuclear energy deal, while denying Pakistan the same. Were it not for China, to have extended its support to Pakistan and expand its civil nuclear co-operation under IAEA safeguards, Pakistan would have been suffering even worse energy shortage. China understands and appreciates that Pakistan is a proponent of peaceful use of nuclear technology and supports objectives of nuclear non-proliferation and safety and security of its nuclear assets. While China is investing heavily in economic development of its neighbors through its One Belt One Road (OBOR) project and China-Pakistan Economic Corridor (CPEC), and the establishment of the Asian Infrastructure Investment Bank (AIIB), it is simultaneously reaching out even to India to support it in its development projects despite Indian animosity towards China.
In this milieu, where China understands and appreciates the multiple security challenges in South Asia and envisions a common, co-operative, comprehensive and sustainable security framework for the region, it is hoped that China also takes cognizance of South Asia’s two major challenges. These challenges are firstly in the form of India’s unprecedented and unwarranted quest for weapons and secondly conflict resolution.
An inclusive, non-discriminatory and criteria based approach needs to be adopted to treat regional states like Pakistan and India. This, however, is easier said than done. While Pakistan envisions a peaceful neighborhood, India is reluctant to improve relations with Pakistan. It has made it a state policy to avoid engaging Pakistan in peace talks. Even the four point proposal for structural dialogues submitted by Pakistan has been rejected by India. Under the circumstances,
calling on the sagacity of Chinese leadership and in view of China’s constructive role in South Asia and East Asia, it would not be out of place to solicit Chinese support for urging India for a dialogue for peace with Pakistan.
In the post 9/11 era India and the US have edged closer to each other. They enjoy a strategic partnership and despite India’s sovereignty, pride and independence, India is open to suggestions and recommendations of its well wishers. As China and Pakistan enjoy a deep rooted strategic partnership, India and the US too have developed close links. To ensure world peace, avoid an accidental Indo-Pak nuclear conflict, both China and the US can play a positive role. The US can urge India to sit at the negotiations table with Pakistan and resolve their outstanding issues including the core issue of Kashmir. Pakistan will need little prodding and would engage diplomatically with India willingly.

 It is understandable that India is averse to third party role in conflict resolution but friends and allies can support peace talks without intervening directly. Sometimes a bit of cajoling and a slight nudge can do wonders. If the US and China can sink their differences and instead of competing with each other, resolve to support peace initiatives, Pakistan and India are prime candidates for such an undertaking. It is strongly recommended that the major powers of today the US and China, which are also major economic giants, can make concerted efforts for ensuring political stability in the region by resuming composite dialogue and resolving disputes between Pakistan and India.
—The writer is retired PAF Group Captain and a TV talk show host.

Courtesy to Pakistan Observer