Emergence of Economic Power by turning CPEC to ICEC!
Colonel Avninash Muley
M. 7756901701
China-Pakistan Economic Corridor (CPEC) was conceived by the China in early 21st century to boost the transportation of goods by road to central Asia as well as to revive the old silk route. It was launched with two aims in mind. China will get alternate land route for its trade to Afghanistan and middle east countries as well as central Asia. Second aim was to have access to the deep sea port of Gwader. Chinese convinced the Pakistani leadership about the infrastructure created in this area, job opportunities, creation of wealth and thereby the revival of Pakistanis economy which was in doldrums.
The project stated in 2013 with initial outlay of dollars 42 Billion. Now with passage of time it has shot up to 68 Billion dollars. Pakistan is worried about revival of its economy and is doubting its ability to pay back the loan China had offered at very high rate of interest. Chinese are also doubtful about their economic goal be fulfilled through this route. This has resulted in 62 % dip in Chinese FDI in CPEC.
With the projection of giving fillip to the Pakistan economy, China Started creating infrastructure along CPEC. With the passage of time Pakistan came to know that the Chinese hidden agenda, as most of the contracts were signed by the Chinese agencies and very little employment had come to the POK. Hence local population has gone against Chinese occupation of their land and utilization of their resources for the benefit of Chinese Infrastructure Companies.
Pakistan also came to know the economic trap sprung by the Chinese due to heavy interest rate levied against the loans given by the Chinese for creating infrastructure. Indian think tanks and policy makers should take the advantage of this situation by suggesting China to operate on Karakoram Kandla axis. That is by opening ICEC (India-China Economic Corridor)
The Chinese also are not sure that Pakistan will be able to pay back the loan they have taken from China. Moreover it is not economically viable option for transportation of Oil/ Gas through this CPEC because of the following factors:
A. Long lines of Communication
B. Growing internal resistance of Local people.
Hence now Chinese are also thinking whether to go ahead with CPEC or not. Last year the Chinese FDI in this project had dipped by 62% which is enormous and indicative of disinterest by China on this project.
Indian Interest:- China and India are two economies in the world which are growing at very fast pace. As there is a problem in South China Sea on which Chinese trade depends, Chinese are exploring alternate route to export their goods and import its energy requirements. Hence CPEC was conceived. Presently because of Pakistan’s economic condition, Chinese are not ready to pump in more money in CPEC.
As the Chinese had already created massive infrastructure till Karakoram Ranges, there is possibility of opening up a ICEC i.e India- China Economic Corridor from Karakoram to Kandla, the nearest deep sea port. Historically China and India were partners in trade since ages. There were two main silk routes passing through India. Due to the trade and cooperation, the GDP of these two countries was more than the GDP of rest of the world at that time. Indian can leverage the area ceded by Pakistan to China Against having access to the Kandla Port.
The infrastructure already exist from Leh to Kandla which can be upgraded at no cost .Chinese can develop Roads from Karakoram to Leh which is very cost effective than pumping money in CPEC. This is a win – win situation. Once these two Nations are dependent for trade and development there is hardly any danger of Chinese waging war with India and vice a versa. The existing border disputes can also be solved amicably which will reduce the ever increasing economic burden on both the countries by maintaining standing Army.
India had always been professing the principal of Co-existence and cooperation. If China and India come to terms on trade and development, the day is not very far that these two nations again bask in the glory of the past.
Colonel Avninash Muley