THE PAKISTAN-CHINA ECONOMIC COOPERATION
Despite the fact that
the free trade zone port of Gwadar in Pakistan’s southwestern province of Baluchistan
has been an unprofitable enterprise with operational control now in Chinese
hands, its potential remains. If anything, the development of the deep ocean
port and an associated international airport, as well as the creation of a
transport walkway connecting Gwadar to China’s easternmost province of
Xinjiang, is a game changer for the Central Asian region.
The Chinese president
signed a series of agreements designed for breathe life to the walkway project
with the development of the passage, Central Asia, traditionally an
economically closed region owing to its geography and lack of infrastructure,
will have greater access to the sea and to the global trade network. For Afghanistan
and Tajikistan, both of which have signed transit agreements with Pakistan, it
will provide a more economical means of transporting goods, making their export
products more competitive globally. For China meanwhile the passage will
provide it with direct access to the Indian Ocean, enabling China to project
itself strategically into the mineral and oil rich regions of Western Asia and
Africa.
But for Pakistan, the
project provides the country not only a third deep-seaport but also a better
connected gateway into China’s backyard, giving Pakistan the potential to make
good on its free trade agreement with the dragon economy.
This projects makes
Pakistan a complicit satellite in China’s attempt to break the US encirclement
of Asia. Commentators link Gwadar to China’s numerous other port facilities and
passages developed in partnership with other nations of the globe. All of this
looks much like a noose around Southeastern Asia as far as India and the United
States are concerned. India in particular has looked on with continued unease
at the Pakistan-China passage and port in terms of its effect on the maritime
balance of power in the Indian Ocean. Ideally if regional relations were
better, the passage would be a circuit linking the three economic powerhouses
of the region, China, Pakistan, and India (as well as Iran for that matter),
integrating the economic systems of South Asia and Central Asia. The passage
will play crucial role in advancing Pakistan’s economic power. Exporting,
transiting and transporting goods into and out of Central Asia and carrying
them away on the current of the world’s sea lanes, the Pakistan-China walkway
will be a vital rector in Pakistan’s economic future. The passage is best
thought of as a comprehensive infrastructure package encompassing a wide range
of spinoffs, including gas and oil pipelines, railways, an expressway from
Karachi to Lahore, fiber optic cabling, metro bus and underground services for
key Pakistani cities. One could even link China’s financial assistance in the
development of nuclear power plants in Pakistan to the wider picture.
However, it is the same
circular argument, the security situation must improve and reform, both
economic and social, is required if the future economic prosperity of Pakistan is
to be guaranteed.
In reality,
agriculture, chemicals, textiles, and various other manufactured items are the
stuff of Pakistan’s true productivity- items that are tradable on the global
market and capable of boosting national income. Pakistan has always been well
placed to export given its access to the Indian Ocean and proximity to key
markets in the West and East, to say nothing of its international reach through
the Pakistani Diaspora and the fact that it has the third largest
English-speaking population in the world.
The cue is now for the Pakistani
government and the business community to formulate a more global economic
policy. As it stands the failure to fully capitalize on the free trade
agreement between China and Pakistan demonstrates the need for a major policy
effort to make the most of the corridor. For one the Pakistani government needs
to place greater emphasis on trade relations in its overall foreign policy as
well as foster the exporting aspirations of small and midsize companies. Expansive
economic policy, continued liberal reform and above all an improved security
situation are the formula needed to make full use of the tools of globalization which Pakistan
will soon have at its disposal.
