By Yasmeen Aftab Ali
In 2016, Turkmenistan, Uzbekistan, Kazakhstan, Iran, Oman, and Pakistan, jointly sighed the Ashgabat Agreement – a multi-model transit agreement that aimed to connect Central Asia and the Persian Gulf. Similarly, in November 2017, Pakistan signed an agreement to develop the Lapis Lazuli Corridor with Azerbaijan, Turkey, Afghanistan, Turkmenistan and Georgia. This agreement also had similar aims to that of the Ashgabat Agreement; where a Custom Procedure Integration was envisaged in the region. Both these regional agreements, however, point towards a common denominator; China’s flagship Belt and Road Initiative and its positive impact on building regional alliances.
The US is already irked by the CPEC with the project being made part of BRI (Belt and Road Initiative) by China. The BRI aims to build physical infrastructures across roughly 65 countries including Africa, Asia and Europe. Pledging $900 billion for the initiative, China aims to pump in $150 billion in BRI related projects every year. The initiative includes ports, bridges, railways, and a sea route aimed to link the Mediterranean and East Africa with the Chinese southern coast. The initiative has two components: one is called the ‘21st Century Maritime Silk Road’ (the road) whereas the other is the ‘Silk Road Economic Belt’ (the belt). The latter is a number of overland corridors that aimed at connecting China with Europe through the Middle East as well as via Central Asia.
The progress of BRI had remained slow until 2016, when President Xi made a call for “model projects” to be the forerunners for the BRI. CPEC is one such showcase project of the BRI. The $62 billion CPEC is a huge network of port, roads, power plants, and factories. Once completed, CPEC will create roughly one million jobs in Pakistan. It includes various developmental projects consisting of industries, educational institutes, airports, sea and land ports and shipping infrastructures, rail links and upgrading of Mainline 1 (ML-I). Also, not the mention the establishment of a New Dry Port at Havelian (Buldhair) District Haripur.
It is an extremely ambitious project that aims to involve many countries to invest and derive benefits from a well-planned and a well laid out transit line. Impressive progress has already been made that includes a detailed design of mining under progress for a surface mine in Block II of Thar Coal field ( with a capacity of 6.5 metric ton per annum) along with the HUBCO Coal Power Plant in Hub Balochistan.
This ambitious posture of China raises the fundamental question of as to whether it will be United States or China who will ultimately determine the rules of trade and investment.
The initiative is considered a huge outreach by China to the rest of the world, seeking international markets for export of goods and technology to boost their economy and at the same time offering benefits to linking nations as well. Charles Parton, a former EU diplomat in China who has researched the initiative, states that the project is, “ultimately a domestic policy with geostrategic consequences rather than a foreign policy” and that “Once completed, BRI could cover over 4.4 billion people and generate a Gross Domestic Product of over $21 trillion” (Executive Summary from the Inaugural Belt and Road Summit, Hong Kong, 18 May 2016).
On the other hand, the US is finding it hard to compete on this scale with China. Former US President George W. Bush had supported the TPP (Trans-Pacific Partnership) and Obama had given final touches to the plan involving trade in the Asia-Pacific region. Unfortunately, Trump pulled out of the TPP on his very first day in office. By staying in the TPP, the US could have helped those countries wanting to be part of the BRI, hence minimising their economic risks. Without the TTP, the US can no longer offer competitive investment plans to its allies.
Also, in 2017, China launched the ‘petro-yuan’. This allows crude oil future contracts to be priced in yuan convertible in gold. Not only does it allow trading countries to avoid US sanctions to trade oil in yuan, it also does not need conversion into US dollars or investing money in Chinese assets. What the US is now left with is a fear of China’s outreach. Leaving TPP – the pragmatic path of moulding the economic game to its advantage – the US is playing a smaller-scale game by joining hands with India to create unwarranted issues in the region. One example is of Secretary Mattis who, while opposing the BRI, made a geographically incorrect statement that the road passed through a disputed territory in Pakistan. Such statements and the clichéd blame-game played by the US, holding Pakistan responsible for issues in Afghanistan, is all part of the same jigsaw.
If the Indo-US partnership succeeds in destabilising Pakistan for the next few years, China will lose momentum and the thrust of a “model project”. Very recently, in a speech, Rex Tillerson stated that “the Indo-Pacific – including the entire Indian Ocean, the Western Pacific, and the nations that surround them – will be the most consequential part of the globe in the 21st century” and that “the greatest challenge to a stable, rules-based Indo-Pacific is a China that has taken to reworking the international system to its own benefit.” (Oct 21, 2017). If China cannot make this project a success, BRI will suffer a severe setback.
Additionally, joining these transit projects like Ashgabat Agreement and the Lapis Lazuli Corridor will strengthen Pakistan’s geographical position establishing her as a strong player in the comity of nations.
The writer is a lawyer, academic and political analyst. She has authored a book titled ‘A Comparative Analysis of Media & Media Laws in Pakistan.’ She can be contacted at: firstname.lastname@example.org and tweets at @yasmeen_9