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Central Asia

China and Central Asian Republics’ Connectivity Through CPEC

Syeda Dhanak Hashmi

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photo by Taik president's press service

The CPEC is just not a road but a network of connectivity, industrialization, trade promotion, energy generation, and much more. The main purpose of the package is to create a land link between western China and Pakistan by providing access to the southern port of Gwadar in Balochistan province. This port was especially designed to cater the needs of China and Central Asian Republics. CPEC route provides immense opportunities to Central Asian Republics to expand trade with Pakistan and also go through China and expand their trade. Chinese Xinjiang enjoys centuries old cultural traditions and trading links with Central Asia. The ancient Chinese Silk Road first connects with Central Asia than rest of the world. Central Asia is thus central to Silk Road. It is believed that Gwadar Port and its allied road infrastructure is a Suez Canal for China and Central Asia. With abundance of natural resources such as oil, gas, gold, and other metals, Central Asian Republics have great potentials to investment in CPEC-related projects and also to investment in the new industrial zones. Pakistan’s location at the crossroads of West Asia, South Asia, Central Asia and the Middle East makes it the natural gateway for the landlocked Central Asian Republics.

The Central Asian Republics have been historically connected to the world through the ancient Silk Road, situated at the crossroads of East Asia, West Asia, South Asia and Europe, their location is excellent for trade. The CARs states are literally a goldmine of energy reserves with Kazakhstan having 30 billion barrels of oil reserves while Turkmenistan’s natural gas is estimated at 265 trillion cubic feet, this wealth makes the region central in the battle for resources between world powers and portend to play an important role in determining global supremacy. Central Asian countries have always looked to access regional markets, including Pakistan, China, India, and the countries of West Asia. In this regard, CPEC could serve as a strategic opportunity for Turkmenistan, Uzbekistan, Kyrgyzstan, and Tajikistan to transport their goods and market them more competitively to regional and global markets. Pakistan also desires to access the rich resources of Central Asia via Afghanistan to meet its energy needs, as well as transport goods to Central Asia. It becomes pertinent at this point to state that indeed the China-Pakistan Economic Corridor has great potential to become a gateway to Central Asia and to provide the region with the much needed economic uplift. It would be a natural extension of that strategy by connecting Central Asian countries with CPEC, China intends to cultivate new markets with significant growth potential in the region and evolve goodwill with neighbouring countries.

In this context, several Central Asian countries have welcomed the implementation of the CPEC by emphasizing the role of the project in promoting progress and prosperity. For instance, Turkmenistan has been allowed to use the crown jewel of CPEC, the newly modernized Gwadar deep-sea port in Pakistan, which gives Turkmenistan access to the Indian Ocean. Tajikistan is also eying access to Gawadar port, as it would be a junction to connect the landlocked Central Asian state with the rest of the world. Uzbekistan expressed a similarly supportive stance about CPEC. The participation of energy-rich Uzbekistan in the CPEC project has the potential to double Pakistan’s energy output for the next six years, ensuring the country with permanent access to electricity. Kazakhstan is also seemingly eager to launch joint projects under CPEC and highlighted the importance of the CPEC project for Kazakhstan and the Central Asian region. Kazakhstan would like to join the mega project as it would provide an alternative route to the Central Asian State for access to sea. Kazakhstan and Pakistan concluded that both countries had a large scope for trade in textile and cotton products, pharmaceuticals, food items, engineering equipment and machinery and construction enterprises. They ended up signing Memoranda of Understanding (MOUs) for cooperation in the areas of trade and investment, defence and strategic studies and training in foreign services along with establishing the need of cooperation for bringing peace in the region.

The Central Asian Republics happen to be the nearest and most dependable source of energy supply via fastest trade routes for China’s burgeoning economic growth. Three of the Central Asian states have common borders with the Chinese province of Xinjiang so it is being planned as a future economic and transportation hub for 75% of Chinese trade with CARs. Further down the route Xinjiang connects with Pakistan so it is all set to function as a key trade centre on the economic belt. An extensive highway network is to be laid for transporting oil, coal and agricultural products from Xinjiang which would be shipped out from Pakistan’s Gwadar Port. Thus Central Asia is unlocked once it links to these trade routes and it gains access to the China Pakistan Economic Corridor. China’s BRI kicked off with its first corridor, the China Pakistan Economic Corridor, it would connect the Central Asian Republics (CARs) to the world with Pakistan becoming a center-point where most routes converge. The CPEC lies at the very heart of an intricate network of corridors working their way through land and sea as they connect vast regions, it can be defined as the most important of the six OBOR corridors and it is the linchpin of the entire strategy.

The Central Asia Regional Economic Cooperation (CAREC) transport corridors are key conduits, improving connectivity and facilitating cross-border movement in the region. Most CAREC countries are landlocked and rely almost exclusively on overland transport for trade within the region and with markets just outside. Comprising an extensive, but still underdeveloped, network of roads and railways spanning the region, the six CAREC corridors are intended to expand trade and improve competitiveness, and in the process augment regional economic cooperation. The notion of a ‘corridor’ was developed to address the trade and accessibility problems of landlocked countries. The corridor concept has since evolved to include transport, trade, logistics, economic, and even supply chain corridors. In addition, these corridors have exceeded their primary functions, and are now indispensable in promoting global and regional economic development. The map shows the three CAREC corridors.

Where there are advantages there are drawbacks too and here the negative factor is the presence of various radical Islamist movements that could destabilize the entire region, so it is essential that CARs be integrated and stabilized with trade and economic opportunities to stem militancy before it spreads across the length and breadth of Eurasia. China would like to quell Uighur rebellions in its territory and prevent the influence of militants from the Central Asian countries. Consequently, the Shanghai Cooperation Organization was formed as a confidence building forum aimed to promote the integration of the region, borders were demilitarized and the vision is to reduce the influence of Western influenced world forums like the United Nations. The focus of the SCO is on economic initiatives, India and Pakistan also became members recently and the mandate has been broadened to include joint security, trade and anti-war pacts.

Central Asia is important in its own right because it is the vital fulcrum between the dynamism of East Asia and the wealth and technology in Western Europe. Pro-actively, Central Asia is being reoriented into the new Silk Road and Eurasian Economic Union to promote the joint objectives and unity of the region. The US would certainly like to have unrestricted access to the CARs energy reserves and maintains military bases at this valuable strategic location, Russia feels that the US is intruding in its territory and has its own military bases to counter American invasive intentions. The Central Asian states of Kazakhstan, Kyrgyzstan, and Tajikistan are members of the Moscow-led Collective Security Treaty Organization (CSTO) while all the Central Asian Republics are part of the Shanghai Cooperation Organization as well and are well consolidated with China and Russia.

While highlighting the significance of Pakistan in the CPEC connectivity initiative it is observed that the country is actually one of the supercontinent’s most important economic hopes, as it has the potential to connect the massive economies of the Eurasian Union, Iran, SAARC, and China, thereby inaugurating the closest thing to an integrated Pan-Eurasian economic zone.” Moreover, the strategic significance of all this enhanced connectivity can mean the end of an empire and result in a multi-polar world, shifting the ‘power base’ to Eurasia. US geopolitical strategy has received this setback at a time when it is a progressively weakened force, this is why analysts call this the Eurasian Century, the integration and economic prosperity it offers make its success inevitable.

To conclude, CPEC is instrumental in economically uplifting the entire region not only through the land routes but also through sea channels, not only benefitting Pakistan but also the Central Asian Republics.

Author is a Foreign Policy Analyst and Research Head at a think tank based in Islamabad. She has done Master of Philosophy (M.Phil.) in Governance and Public Policy. Her areas of research include both regional as well as global issues of contemporary international relations.

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Central Asia

Chimes from Tashkent

Sabah Aslam

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Located at the new center of global attraction for economic activity, Pakistan and Uzbekistan share a long string of relations. After the independence from the soviets, Pakistan was among the first countries to recognize it. In 1992, Pakistan established their first diplomatic sanctuary in Tashkent. Since then delegations from both the countries paid visits to each other.

The bond shared between the two countries, that lie in close proximity, is strengthened by similar eastern culture and fortified by the religious ties. This sharing of cultural and religious values is clearly visible in the national language of Pakistan which borrows thousands of words from Uzbekistani language. This nexus is now getting even stronger with the increase in co-operations in social and economic sectors.

Relations between both the states saw an unprecedented growth in recent times and this social integration is ever growing. During the last year only,

63events such as seminars, presentations and business forums were arranged for general public. Whereas, the Uzbek Embassy had a significant number of bilateral meetings with the top tier of business community including several associations and unions. The same sentiment was reciprocated by Pakistani side when more than 50 companies paid visit to Uzbekistan with the purpose of investment. There were a number of exhibitions, events and investment forums in Tashkent, Jizzakh and Bukhara. Eight different Pakistani companies participated in such events.

Uzbekistan and Pakistan have also been working on 38different joint ventures for launching import/export operations.

In economic sphere, Islamabad and Tashkent hold great trade potential. In just 2018, the mutual trade between both countries crossed USD 98.4 million’s mark, which means a raise of around 170%.Prior to 2018 in 2017 numbers of economic activity between two states were low and accounted for just USD 36.6 million.

In 2018 Pakistani export to Uzbekistan increased for 150% and amounted 66 million USD (in 2017 – 26 million USD).

Last year Ambassador of Uzbekistan to Pakistan Mr. Furqat A. Sidikov while addressing business community at Islamabad Chamber of Commerce and Industry expressed that trade volume between Pakistan and Uzbekistan has the potential to rise up to USD 1billion in next 5-6 years. It clearly signifies that both countries can provide enormous benefit to each other’s socio-economic segment. Pakistan has been exporting edibles like mango, citruses, raw and refined sugar. Furthermore, chemical products, pharmaceutical products, and leather and textile goods are major exports of Pakistan to Uzbekistan.

Uzbekistan is also a hub for petrochemical goods, cotton and silk goods. Its exports to Pakistan includes: leather raw materials, petrochemical products and mineral fertilizers, cotton yarn, cotton fiber, raw silk, plastic products, agricultural machinery, clothing, etc. Not only this, dry fruits and vegetables are also exported from Uzbekistan to Pakistan.

In 2018 Uzbekistan-Pakistan Business Council was established in Islamabad in order to facilitate and support the business community in two countries. Apart for this, several forums are also established in main cities of Pakistan to boost up the economic potential.

Accessibility remains a key subject in establishing people to people relations thus recognizing this flight route from Tashkent-Lahore-Tashkent was resumed in April of 2017. Both states also look forward to initiate new routes from Islamabad and Karachi as well. Earlier in May Uzbekistan’s Ambassador to Pakistan had a meeting with Chairman Senate of Pakistan to discuss the inter-parliamentarian cooperation between Pakistan and Uzbekistan. Sideways to expanding parliamentarian relations it was also discussed to further strengthen the cooperation on transport sector to provide uninterrupted route to trade of goods.

Both countries share many economical and regional platform and are member of Organization of Islamic countries (OIC), Shanghai Cooperation Organization (SCO), and Economic Cooperation organization (ECO)and others. Multiple times these platforms were used to freshen up the relations between two countries. Based on mutual trust both countries can have free trade agreements to amplify the relations between them.

Enormous potential lies in social, economic and political sectors on which both countries can work. Both countries can play a key role in bringing peaceful non-military solution to misery in Afghanistan as well as in the region. Pakistan needs to explore new avenues for cooperation with countries like Uzbekistan and extract the maximum benefit for itself.

Uzbekistan understands importance of Pakistan in keeping stability and prosperity of the whole South Asian region. Both countries are interested in continuing bilateral partnership on all key issues of the regional security and stability agenda, including the conflict resolution in Afghanistan and expansion of infrastructure, trade and economic ties between Central Asia and Pakistan.

Uzbekistan initiated logistic project that project will include the construction of the massive railroad transport corridor “Uzbekistan-Afghanistan-Pakistan”. In details, this corridor will compose the rail line “Uzbekistan-Mazarisharif” which has been already realized between Uzbekistan and Afghanistan as well as construction of new rail road “Mazari-Sharif-Kabul-Peshawar”. 

In perspective, full realization of this unique transport corridor, will make Pakistan as a Central regional trade hub between South Asian and Central Asian regions.

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Central Asia

No More Business as Usual: Improving Water Usage in Central Asia

MD Staff

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Central Asia’s future economic development, including its energy and water security, depends to a great extent on how effectively countries manage their natural water supplies, especially under increased pressures from climate variability, economic growth, and population expansion.

The population of Central Asia is expected to grow by around 30% by 2050. As such, demand for water services will also increase significantly.

Central Asia is heavily dependent on agriculture, which provides livelihoods for about 50% of the population in some countries. But its level of water productivity is one of the lowest in the Europe and Central Asia region. More efficient use of water in the economy could significantly contribute to increased agricultural productivity, green energy production and the health of the region’s environmental assets.

According to estimates, the adoption of modern agricultural techniques and methods could increase the region’s crop yields by over 20% by 2030, and by 50% by 2050. On the other hand, if countries continue a “business as usual” approach, Central Asia is among the regions that could experience a significantly negative impact on GDP under climate change. Each year, inadequate water supply and sanitation leads to overall economic costs equivalent to around $2.1 billion, although these costs differ from country to country – ranging from almost 0.5% of GDP in Kazakhstan to around 4.25% in Tajikistan (2017 data).

“The water agenda in Central Asia is always viewed through the lens of the Aral Sea disaster,” said Ato Brown, World Bank Country Manager for Kazakhstan. “Today, it is high time for us to start changing the narrative so that Central Asia is known for being an oasis of production and productivity.”

According to a World Bank report, Central Asia is among the regions that have most to gain from properly managing water resources under climate change.

Most of the major rivers in Central Asia cross borders, therefore countries need to coordinate water management to advance sustainable development and climate resilience.

Water resources in the region are sensitive to climate variability, which poses significant challenges to the agriculture and energy sectors.

Since the 1950s, average annual temperatures have increased by 0.5°C in the mountainous areas of southern Central Asia, and glaciers that feed the region’s main rivers – Amu Darya and Syr Darya – have shrunk by a third. With the melting of glaciers, the expected fall in river flows will have a major impact on agricultural production.

By 2025, hydropower is expected to overtake gas as the main fuel source for energy production in Central Asia. Where hydroelectricity production is based on reservoir storage, there can be flow management benefits for climate change adaptation, including flood and drought prevention and mitigation, as well as timely delivery of irrigation and drinking water.

“Central Asian countries need to start with a joint project, and there are opportunities for working together,” said Ato Brown at the Astana Economic Forum. If the countries of Central Asia invest sufficiently and effectively in better water management, they have the potential to become not just economically prosperous and resilient to climate change – but also to provide new opportunities and hope for all their citizens.

World Bank

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Central Asia

Pakistan and the -Stans

Sabah Aslam

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From the coasts of Caspian Sea to the rouged lands touching Afghanistan, there lies a belt of resource opulent countries, the Central Asian States. Comprising of five states, it is now becoming the new hub for social and economic development. As it lies at the heart of ancient silk route, central Asia also holds key importance in the new  geo-economics of world as well. With combined population of more than 66 million and alone Uzbekistan accounting for approx. 29 million, Central Asia is an emerging market for investing companies.

Known as the five -STANs since all five states include -STAN at the end of their respective names. When these states got independence from the Soviet Union in 1991, Pakistan was among the first and few countries to recognize them and establish diplomatic relations with them. Since then, Pakistan and Central Asian countries enjoy healthy relations. Form visits of high-level delegations to signing of MOUs for establishing Joint Economic Commissions (JECs) Pakistan is fully acknowledging the role and importance of Central Asian states.

Geography plays a key role in the importance of these states located on the crossroads of East and West, Central Asian culture is an amalgam of ancient civilizations and modern era. Pakistan and the other STANs have a lot in common. Deeply connected with the bond of the religion, Pakistan and Central Asia, share many similitudes in culture. For instance, Sufism is enrooted in both societies. The architecture, cuisine, arts and handicrafts and even the dresses are somewhat similar. The languages also contain words and structures that are common. Thus, implying that both have immense potential of bilateral co-operation. For this, cross-cultural integrating policies and measures will boost the relations.

Out of many cross-cultural programs, Students’ exchange programs can be very beneficial. Pakistan in 1992-93 started Special Technical Assistance Programs, under which apart from language courses, diplomacy, banking and accountancy expertise were also exchanged. Programs were fully funded by the government of Pakistan. Presently, Central Asian Faculty Development Program had 7% of its fellows from Pakistan in Phase I. Similar programs can help improve the relationship between Central Asia, at not only state level but also it will be beneficial in context to people to people diplomacy.

Economic diplomacy stands as one of the guiding principles for Pakistan’s foreign policy now, hence the already important trade and commerce now stands even more important between the two societies. Presently, Pakistan’s trade volume is almost 58.4 USD in region with exports comprising of larger numbers, indicating the Central Asia can be very favorable market for Pakistani exporters and investors. Kazakhstan being the largest trade central Asian partner of Pakistan, is followed by Tajikistan and Turkmenistan. This trade and commerce between the two can contribute a lot in economic development of the countries and uplifting the standard of living.

Pakistan now is lying a greater emphasis on tourism industry than ever before. It has also been a driver for development in Central Asia. Travelers from across the globe are now visiting the region because of its unique cultural heritage and landscape. The number of visitors to Central Asia is ever increasing as it increased from 2 million visitors in 2010 to 6 million in 2016. Pakistan has also aims at a single tourist visa for all Central Asia Regional Economic Cooperation (CAREC). The promotion of tourism for strengthening of economic and cultural ties across countries and generation of employment and business opportunities had been the priorities under CARCE 2030.

After Washington’s venture on War on Terror and Pakistan becoming the pivot of it tables got turned. When Pakistan experienced the ricochet of Uncle Sam’s policies in Afghanistan , there seemed a decline in Pakistan’s heed towards the Central Asia. Affected by terrorism and its export from across the border with severe internal security challenges, discourse of Pakistan’s foreign policy took a major shift. Pakistan’s primal objective was to secure its internal and external parameters. After more than a decade, the dark clouds are dispersing from Pakistani skies and it is rising from the dungeon of bloodshed.

Now is the time for Pakistan to revamp its foreign policy framework and extend its diplomatic arms across the regions. Since both societies can benefit and can bring robust advancements to their socio-economic fabric by cooperating with each other. Pakistan should thus align its foreign policies with the overall shift in global politics. Since East now holds much important on international scenario, Pakistan and Central Asian co-operation will stand for a more promising future of region.

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