Transport project with China could boost economy

The China-Pakistan Economic Corridor initiative, a planned $46 billion network of transport links, appears to be gaining momentum, which is good news for Pakistan's sluggish economy. Still, security and funding issues remain an obstacle. 


The CPEC project, agreed to by Chinese Prime Minister Li Keqiang and his Pakistani counterpart, Nawaz Sharif, in May 2013, would connect the Arabian Sea port of Gwadar in southwestern Pakistan with the Xinjiang region of northwestern China upon its scheduled completion in three years.


The corridor is part of China's "One Belt, One Road" initiative to establish a network of transcontinental land and sea routes. China views Gwadar as a potential hub for trade with the Middle East, Africa and Europe. The project is also aimed at promoting development in Xinjiang and Tibet.



Gwadar, a deep-sea port that is widely expected to become Pakistan's biggest, started container ship operations in May.


Claude Rakisits, senior fellow at the South Asia Center of U.S. think tank the Atlantic Council, said the project could be good for Afghanistan, too. "If peace eventually does come to Afghanistan, CPEC will help that country integrate more closely economically with Pakistan and Iran," he said. "And, of course, it will provide direct access to western China and its hinterland ... a vast and fast-growing region in need of development."


Added Rakisits, "Needless to say, with better roads and railroads, the huge Pakistan market will be easier to access for foreign investors."


Aiming too high?


However, some question the Pakistani government's ability to complete the project given its persistent financial difficulties.


"CPEC is a very ambitious and expensive project, and both [Pakistan and China] appear very keen on making it work," said Michael Kugelman, senior associate for South and Southeast Asia at the Woodrow Wilson International Center for Scholars, a U.S. think tank.


 But is it too ambitious? "Many of the projects [planned under the CPEC] are in a holding pattern," Kugelman said. "China is supposed to fund Pakistan's side of a new Iran-Pakistan gas pipeline, but until the U.S. releases sanctions on Iran, I doubt this funding will materialize. Also, many of the energy projects associated with CPEC are focused on coal, but Pakistan appears to be scaling back its earlier plans to develop its indigenous coal resources."