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Answering the CPEC Challenges

Qura tul ain Hafeez

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China-Pakistan Economic Corridor will help sustain the economic growth of China and will highlight the strategic importance of Pakistan. It will offer Pakistan with a chance to broaden the horizon of its economy and enlarge its foreign reserves. However, whilst venturing towards industrialization and Foreign Direct Investment (FDI), CPEC in Pakistan faces certain challenges that have so far impeded the industries in realizing their full growth potential. Principal obstructions to investment in this regard are various security and political factors as well as the non-availability of infrastructure and power crises.

The answer to these challenges is that the FDI is very much necessary for raising the value of capital. Eventually, once the high capital value is achieved it will helps in developing infrastructure and for initiating large industries. Thus through Foreign Direct Investment (FDI) the dearth of capital will be lessened to greater extent. In order to set up competitive industries in the globalized world one of the priorities is the accessibility to the productive and high tech transportation for maneuvering of raw materials and finished goods. This is an understood observation that, economic expansion strengthens infrastructure advancement and vis a vis.

The second most important aspect is how far CPEC is beneficial for the Pakistani labors and how the industrial advancement will be creating Jobs through CPEC for Pakistani people? The youth surge is often named as asset and it should be chief concern of the State, because this strength has turned into burden owing to unemployment. In this regard CPEC could offer appropriate interference in the course of employment creation to take in hand the grievances of unemployed youth. The electricity shortage and network of infrastructure further minimizes the on hand base of small industries in Pakistan. The first phase of energy projects in early harvest program of CPEC will be effective in reducing the electricity shortfall. The inexpensive and unremitting power availability is indispensable for stimulating Pakistan’s manufacturing sector. This will increase the economic activities, create jobs and catch the attention of foreign investors to invest in trade zone of Pakistan. Eventually all the project which are part of CPEC, whether they are electricity production projects or infrastructural advancement projects need man power -engineers; civil mechanical, electrical. Along with disciplines of engineering technicians: masons, welders, carpenters, surveyors, steel fixer, machine operators, etc are also required. Moreover not only the labor and technical workforce, there is also a need of professional economists, finance, accounting, management HR and interpreters of Chinese language who will monitor and manage these projects. Thus to sum up the answer to the question that how far CPEC is effective in creating jobs, one can say that  according to the resources and as the above mentioned, CPEC will be generating around two million jobs implicitly or explicitly till 2030.

Moreover, this is also worth noting that if the Pakistan stakeholders are making their living and paying high tax regardless of the Chinese who are investing and they are exempt from taxes. Under such conditions how CPEC will be profitable for Pakistani investors and local industrialists if Chinese are tax exempt and local industries are not? In that case CPEC Special Economic Zones (SEZs) will be a fruitful strategy for promoting trade, employment and economic growth. Consequently to upgrade the industries, through SEZs, one of the intended objectives of the CPEC is to best serve the private sector of Pakistan to strengthen local industries through Free Trade Agreements (FTA). The proclaimed incentives which CPEC promises to offer the local enterprises include the promotion of Pakistan’s industries from accumulating imported parts and components to localized production of parts by utilizing the available resources, offering employment opportunities to the people and encourage bilateral connectivity between various Chinese and Pakistani enterprises. It will also expand trade volume and logistics, business-to-business (B2B) links, two-pronged trade arrangement, regional connectivity and encourage evenhanded trade maturity. Subsequently in order to facilitate the local business sector, Board of Investment (BoI) established “CPEC-SEZ Cell” in February 2017 in order to address the concerns of the stakeholders on the matters related to the CPEC and Special Economic Zones. The prime function of this support cell is to attract, facilitate and promote both local and foreign investment in the country as per Special Economic Zones (Amendment) Act, 2016 of Pakistan.

Furthermore in line with changing global economic structure CPEC will bring trade openness. For that Pakistan has prioritized the establishment of SEZs. So far 41 sites have been identified for SEZs and the Board of Investment (BoI) has mapped out nine exclusive Industrial Zones to be built under the larger umbrella of CPEC. It is also pertinent to mention that the CPEC project is not merely a route that connects Gwadar port with Kashgar but an opportunity for both China and Pakistan to enjoy the fruits of trade openness with Europe, Middle East, South and Central Asia as well. Thus the establishment of SEZs  promises to bring  Trade Openness through a massive socio-economic development  in the country specifically in the areas of energy, trade, agricultural, infrastructural development, connectivity, industries, poverty alleviation, tourism, cooperation between financial institutions and markets, and financial cooperation between Free Trade Zones (FTZs).

Last but not the least the difficulty of capital and capacity insufficiency can be alleviated through joint ventures between Chinese and Pakistani business community under CPEC. It is necessary to enlarge the stakes of domestic industry and protect their interests under CPEC. Pakistani entrepreneurs should be given incentives similar to Chinese investors for investment in the CPEC projects.

Qura tul ain Hafeez has done M Phil in international relations from Quaid-I Azam University Islamabad. She is currently working as a Research Associate at Strategic Vision Institute Islamabad. She can be reached at Quraathashmi[at]gmail.com

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US geopolitical interests offer Iran sanctions loophole amid mounting tension

Dr. James M. Dorsey

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The Indian-backed Iranian port of Chabahar has emerged as a major loophole in a tightening military and economic noose and ever harsher US sanctions that President Donald J. Trump, reluctant to be sucked into yet another war, sees as the best way to either force Tehran to its knees or achieve regime change.

Alice Wells, the State Department’s assistant secretary for South and Central Asia, said during a meeting with Afghan foreign minister Salahuddin Rabbani that Chabahar had been exempted at Afghanistan’s request.

The State Department said earlier that the exemption was granted because it was related to “reconstruction assistance and economic development for Afghanistan, which includes the development and operation of Chabahar Port.”

US officials said privately that the exemption was also a nod to India that sees Chabahar as vital for the expansion of its trade with Afghanistan and Central Asian republics.

They said it was moreover an anti-dote to the Chinese backed port of Gwadar just 70 kilometres down the Arabian Sea coast in the troubled neighbouring Pakistani province of Balochistan.

That may be a long shot, certainly as long as India like much of the rest of the world is restricted by the US sanctions in its economic and commercial dealings with Iran.

The exemption comes however as Chinese security concerns in Balochistan as well as Pakistan at large are mounting.

China’s massive US$45 billion plus Belt and Road-related infrastructure investment in Pakistan with Gwadar and Balochistan at its core has become a prime target for nationalist insurgents that has officials in Beijing worried. It has also reinforced long-standing doubts in some circles in Beijing about the viability of the project.

Dubbed the China Pakistan Economic Corridor or CPEC, China sees the project, involving a network of roads, railways and pipelines that would link Gwadar to China’s troubled north-western province of Xinjiang as a key economic component of its brutal effort to Sincize the strategic region’s Turkic Muslim population.

“China, you came here (Balochistan) without our consent, supported our enemies, helped the Pakistani military in wiping our villages. But now it’s our time… Baloch Liberation Army (BLA) guarantees you that CPEC will fail miserably on the Baloch land. Balochistan will be a graveyard for your expansionist motives,” a commander of the BLA’s Majeed Brigade said in a video message released a week after militants stormed a hilltop, highly secured luxury hotel in Gwadar, killing five people.

The BLA claimed a month earlier responsibility for an attack on a convoy on a highway leading out of Gwadar in which 14 Pakistani military personnel died and an assault last year on the Chinese consulate in Karachi.

The attacks and threats have prompted Chinese sceptics of China’s massive investment in Pakistan to express their doubts more publicly.

“Gwadar wants to be in the shipping business, but it has failed to do so. Pakistan’s economy is not very good, and this port has become very wasteful … under these circumstances, including with the hotel attack, how can China conduct its business? The roads and traffic cannot even be maintained,” said Beijing-based military analyst Zhou Chenming.

While many in Pakistan believe that the BLA enjoys Iranian support and Iranians are convinced that Pakistan enables shadowy Islamic militants who have claimed responsibility for a rare suicide bombing in December in Chabahar and attacks on Revolutionary Guards elsewhere in the Iranian province of Sistan and Balochistan, fact of the matter is that both countries are vulnerable to Baloch insurgents.

The situation on both sides of the Iranian-Pakistani border is complicated by suspicions that the violence also has links to the rivalry between Iran and Saudi Arabia and that the Baloch provinces of Pakistan and Iran could become a stage for a proxy war.

Amid reports that China has reached out to Baloch nationalist leaders in exile, Pakistani security analyst Muhammad Amir Rana cautioned that the exiles may no longer be in control.

“The new leadership of the Baloch insurgency largely hails from the educated middle class with urban backgrounds and is not hiding in Europe; therefore, it does not face the sort of constraints that exiled Baloch leaders do vis-à-vis Iran,” Mr. Rana said.

Mr. Rana noted that Iran’s influence in Pakistani Balochistan was visible in oil smuggled across the border, Iranian products in grocery shops and the supply of electricity to the coastal strip of Makran that includes Gwadar.

“For Pakistan, the security cost of CPEC is increasing which could frustrate the Chinese as well as foreign and local investors,” Mr. Rana warned.

For now, China confronts a more serious challenge in Gwadar, Balochistan as well as other parts of Pakistan that are struggling with un-related incidents of political violence compared to India and Chabahar.

That could change if the Saudi Iranian component of the low level Baloch insurgency spins out of control with the escalating stand-off between the United States and Iran.

Iran appears to have pinned its hopes that Chabahar will be shielded from the impact of regional tensions on the perceived US geopolitical need to protect India’s interest in Afghanistan and Central Asia.

Said Pir Mohammad Mollazeh, an Iranian Afghanistan and Central Asia scholar: “US long-term geopolitical interests, due to the lack of relations with Iran, require India to maintain its position in the region and protect India as a partner in Central Asia… Chabahar port is considered to be a very important and strategic which is an opportunity for our country to enable Iran to reduce its sanctions by means of economic exchanges in Chabahar.”

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Pointless Colonial Massacres and Post-Colonial Wars and Killings on the Indian Subcontinent

Dr. Arshad M. Khan

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Two colonial mass killings from the twentieth century are always remembered:  The Qissa Khwani Bazaar massacre on April 23, 1930 in Peshawar (then India, now in Pakistan) was the result of peaceful demonstrations protesting the arrest of Khan Abdul Ghaffar Khan who had called for a nonviolent movement of ‘patience and righteousness.’  Authorities nervous at the size of the crowds called in the military.  The local Garhwal Rifles refused an order to fire.  A special city disturbance column and four armored cars were sent for;  they did not.  The number of dead vary with the source ranging from 20 to 400.  Whatever the figures, the incident legitimized the protest movement and creating a new Gandhi of the northwest in Ghaffar Khan. 

Pakistan since independence has had insurgencies — in the Northwest where Peshawar is located,in Baluchistan (ongoing) and, the worst of all in  its eastern half in 1971 that led to the birth of Bangladesh.  Estimates of casualties range from 300,000 to 3 million. 

This year is the centenary of the notorious Jallianwalla Bagh massacre in Amritsar.  April 13, 1919 was the day of Baisakhi, a major Sikh festival, so people had come to the holy city from surrounding Punjab villages and gathered to listen to speakers.  They were also unhappy with the deportation of independence leaders Dr. Saifuddinn Kitchlew and Dr. Satya Pal out of state to Dharamsala.  The protesters were mostly Sikh, the leaders being deported a Muslim and a Hindu, and India then secular in the minds of the people. 

Brig-General Reginald Dyer the local commander had banned all meetings.  To him the crowd gathering in the Bagh was a challenge to authority.  He took a contingent of Gurkha troops and proceeded forthwith to disperse what to him was an illegal assembly.  It is worth noting that Nepali Gurkhas are alien to the area, speak a different language, and look more like Tibetans.  The force took up positions on a raised bank at the main entrance and were ordered to fire on the unarmed crowd.  People tried to flee toward the other exits and in the stampede some were trampled.  Yet the firing continued for an incomprehensible ten whole minutes using up 1650 rounds and leaving hundreds dead and over a thousand wounded.

No respite for the Sikhs despite their anti-Muslim stance during the 1947 partition.  In 1984 following Indira Gandhi’s assassination by a Sikh bodyguard — itself a result of her military response killing Sikh religious zealots occupying the Amritsar Golden Temple — riots broke out.  An estimated 8000-17,000 Sikhs were killed in Delhi and Haryana.  The connivance of the Delhi police and the Congress party has long been suspected, and Human Rights Watch has complained of no prosecution for the killings.  Ditto for the perpetrators of the Muslim pogrom in Gujarat during Narendra Modi’s rule.

While the callousness of the Qissa Khwani Bazaar and Jallianwalla Bagh incidents horrifies, the number killed pales in comparison to what has happened since independence.  Within months of freedom, India invaded the independent principality of Hyderabad, allied to the British since the 18th century.  An estimated 200,000 people were killed and many fled to Pakistan.

It also invaded, occupied (1973) and then annexed Sikkim in 1975, a Himalayan foothill monarchy since 1642.  The suppressed independence movement in neighboring Assam and the Northeast and other ongoing insurgencies across at least a quarter of India continue. 

In Kashmir, a decades long struggle for some kind of autonomy has cost tens of thousands of lives.  Estimates vary from 40 to 80 thousand.  Some Indians have a conscience:  Long critical of India’s stance, the Booker Prize winning novelist and peace activist Arundhati Roy has called the Modi government ‘reckless’ in its policy there.

The Muslim minority in India appears to be intimidated and abused.  A recent feature story on Chamanganj, a Muslim neighborhood in Kanpur, illuminates the distress and discrimination experienced by Muslims.  The Congress candidate never visits; the BJP candidate shows up hoping to capture some votes but his party’s policy is notoriously anti-Muslim.

The violence against Christians is also on the rise.  Opendoorsusa.org reports over 12,000 incidents last year, while the number of churches attacked rose dramatically from 34 to 98.  It has now become the 10th most dangerous country in the world for Christians on the 2019 World Watch List.

A secular India, the pride of Indian independence leader and its first prime minister Jawaharlal Nehru, is under threat.  In its place, a muscular Hindu nationalist agenda enforced by goons from nationalist organizations has been labeled “saffron terror”.  The Hudson Institute called these attacks “not inchoate mob violence, triggered by … insult; rather they involved careful planning by organized Hindu extremists …”

The record is surprising yet evident:  Independent India has killed hundreds of times more people than the Dyer atrocity, and the present-day Indian subcontinent is becoming a noticeable contrast to the relatively secular country of 1919.  In India itself, the Modi government and its affiliates by encouraging Hindu nationalism must shoulder the blame. 

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The Durand Line Issue

Hareem Aqdas

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The Durand Line is a 2,200-kilometre debated border between Pakistan and Afghanistan. It was set up in 1893 between Sir Mortimer Durand, a British negotiator and respectful hireling of the British Raj, and Abdur Rahman Khan, the Afghan Amir, to settle the constrain of their individual circles of impact and make stride discretionary relations and exchange between the two nations. Afghanistan was considered by the British as a free state at the time, in spite of the fact that the British controlled its remote issues and discretionary relations. The single-page assertion, dated 12 November 1893, contains seven brief articles, counting a commitment not to work out obstructions past the Durand Line.

 A joint British-Afghan boundary overview took put beginning from 1894, covering a few 1,300 km of the border. Built up towards the near of the British-Russian “Great Game”, the coming about line set up Afghanistan as a buffer zone between British and Russian interface within the locale.

The line, as somewhat adjusted by the Anglo-Afghan Settlement of 1919, was acquired by Pakistan in 1947, taking after its independence. The forced Durand Line cuts through the Pashtun tribal ranges and assist south through the Balochistan locale, politically partitioning ethnic Pashtuns, as well as the Baloch and other ethnic bunches, who live on both sides of the border. It demarcates Khyber Pakhtunkhwa, Balochistan and Gilgit-Baltistan of northern and western Pakistan from the northeastern and southern areas of Afghanistan.

From a geopolitical and geostrategic viewpoint, it has been depicted as one of the foremost unsafe borders within the world. Although Pakistan recognized the Durand Line as an international border, it remains to a great extent unrecognized by Afghanistan. In 2017, in the midst of cross-border pressures, previous Afghan President Hamid Karzai said that Afghanistan will “never perceive” the Durand Line as the international border between the two countries.

The Durand line remains a bone of contention between the two nations and a primary reason why Afghanistan and Pakistan have yet failed to establish cordial relations. Afghanistan claims a chunk of the KPK and Balochistan provinces of Pakistan on the basis that it was acceded to Pakistan, though it was originally a part of Afghanistan, with people dwelling on each sides having the same culture, language and way of life etc.

What is very clear is that relations between the two states have been tinged with hostility ever since Pakistan became an independent state in 1947. There are mainly two interrelated, historical reasons for this: the problem of the “Durand Line” — the shared but disputed border of the two countries; and Afghan support for the “Pakhtoonistan” movement in Pakistan’s North West Frontier Province (NWFP)

The questions is answered by both nations with a bias towards their respective national interest in mind, both Pakistan and Afghanistan claiming areas divided by the Durand line as their legitimate part.

Major accusations of Afghanistan over the Durand line are: its legitimacy period has terminated; it was in the original agreement between the British and the Afghans claimed its validity only for 100 years, which has expired. Nevertheless, neither Afghan government, nor the foremost dynamic advocates of this see have ever displayed any plain instrument demonstrating their claim. Nor do we discover, upon looking at the pertinent archives, i.e. the Durand Line assertion and the rest of the records confirmed until 1896 by the individual committees for assurance and boundary of the British-Afghan border, any arrangement confining the term of the understanding to 100 year time. It is undoubtedly a riddle how this supposition might spread over the nation without being addressed at all.

Another claim of Afghanistan in the de-legitimizing the boarded is that the assertions relating to it collapsed when the British exchanged powers to Pakistan. The agreement was done with British India and not with Pakistan. This was a main reason that Afghanistan was one of the very few countries that opposed the addition of Pakistan in the UN- since it alleged it of illegally annexing Afghanistan’s territory.

One more accusation to not accept the boarder comes as the understandings were persuasively forced upon Afghanistan-it is ethically unmerited- is certainly an issue worth encourage talk and contention. In any case, whereas one may concede the dispute to be fair and genuine, it remains deficiently to refute the status of the Durand Line as an international border between Afghanistan and Pakistan. The Durand Line understanding of 1893 isn’t the sole point of reference in border assessment. At slightest other four assertions (of 1905, 1919, 1921 and 1930), which had the assent of both sides, must be counseled. Clearly, Afghanistan cannot claim that all of the afterward four assertions were concluded in a coercive environment, particularly the Kabul 1921 understanding for foundation of neighborly commercial relations, which not as it were marked but approved in 1922, and beneath which disobedience was traded by the agents of both states in Kabul.

The boarder is not rejected by any other party of the world except Afghanistan itself, making the Afghan case further weakened.

No matter how much Afghanistan retaliates over this matter, the Durand line is widely accepted as an international boarder and the afghan claim will likely not bear fruit. The Afghans should rather hold the British accountable for the “so said” unfair distribution and not Pakistan, since Pakistan did not decide into this matter at all but was a decision purely made between the Afghans and the British- rather battle the British towards their claim and not make this a political issue more than a legitimate claim.

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