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CPEC: Opportunity for Iran and Pakistan

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Historically, Iran and Pakistan enjoyed friendly relations and this relationship has noticeably improved in the recent years. The two countries have been successful in harmonizing their differences over Afghanistan where they have no more to enter into contestation, given Iran’s reconciliation with the Taliban and the two countries’ common threat perceptions over the rise of the Islamic State in the ‘AfPak’ region.Pakistan’s regional posture is India-centric, while Prime Minister Narendra Modi has also enunciated on several occasions a policy of encircling and isolating Pakistan regionally and internationally. Along those lines, India has substantially increased its influence in Afghanistan, and it has recently, too, started stepping up its engagement with Iran. Meanwhile, Pakistan, instead of countering Indian engagement in Iran, is directing its ire at Iran itself. This has further alienated Tehran, which has its own interests to pursue.

As per 2013 Pew Poll found that 69 per cent of Pakistanis had a favourable view of Iran, the highest percentage of 39 countries polled worldwide on perceptions of the Islamic Republic. According to a survey, conducted by the Pakistan Institute of Peace in 2013, political and religious parties in Pakistan hold on to the notion that Pakistan’s ties with Iran should not be determined by the fears of upsetting the US but need to be based on Pakistan’s own national interest. It will not only improve relations with Iran, but also promote security, economic cooperation and, sectarian harmony. According to a report by the International Monetary Fund (IMF) in 2013, while Pakistan ranked as the 11th largest trading partner of Iran, trade between the two countries has been well below its true potential despite geography and the infrastructure available under the Economic Organization Cooperation (ECO) framework. There is, however, a high volume of trade between the two countries through third country channels, smuggling and other illegal modes of financial transactions, mainly because of the western imposed sanctions on Iran, and the threats of penalties on the countries doing business with Iran.

Covering a land area of 1,648,195 km2 (636,372 sq mi), Iran is the second-largest country in the Middle East and the 18th-largest in the world. With 78.4 million inhabitants, Iran is the world’s 17th-most-populous country. It is the only country with both a Caspian Sea and an Indian Ocean coastline The country’s central location in Eurasia and Western Asia, and its proximity to the Strait of Hormuz, makes it of great geostrategic importance. Iran is heir to one of the world’s oldest civilizations, beginning with the formation of the Proto-Elamite and Elamite kingdoms in 3200–2800 BC. The area was first unified by the Iranian Medes in 625 BC, who became the dominant cultural and political power in the region.It is important to note that Tehran is very closely watching the realignments taking place in the region as well as at the international levels to assess its future plan of action. With a new block emerging in the region, Iran is fast shifting its weight towards China. Iran can join this coalition which aspires to keep the region peaceful and economically vibrant.

Iran, situated astride the Persian Gulf, Gulf of Oman and Caspian Sea, has Pakistan, Armenia, Afghanistan, Iraq, Azerbaijan, Turkmenistan and Turkey as its neighboring states. Being an energy abundant country, exports petroleum, cement, chemical products, carpets and fruits and imports capital goods, consumer goods, Industrial supplies and technical services. Iran’s trading partners include China, Japan, India, Turkey, South Korea and UAE. Initially opposing Gwadar as a perceived economic threat to Chahbahar, Tehran has recently shown its inclination to participate in CPEC with an intent to enhance land connectivity for trade purposes. With Iran’s positive disposition towards CPEC the erstwhile Iran-Pakistan-India (IPI) pipeline could be rechristened as Iran-Pakistan-China (IPC) Pipeline. Iran’s participation in the Project is likely to go a long way in bringing stability to the region, particularly Afghanistan. A train link connecting Pakistan, Iran and Turkey78 will not only strengthen Pakistan-Iran-Turkey partnership but would also ensure a safe trade route from South-Asia to Middle East and from Turkey right into Europe.

The willingness shown recently by President Rouhani to join with the world’s economic giant through CPEC is actually not linked to benefit economically but also the strategic significance of this new emerging alliance is also being taken care of.The bottom line is that both Iran and Pakistan regard China as a bulwark against US hegemony. The CPEC also brings in an economic dimension.Moving on, Iran’s inclusion in CPEC will help Pakistan in a number of ways. One, Iran’s re-entry into the active international fold after the recent lifting of sanctions bodes well for Islamabad. For Iran, there’s no looking back. Trade and economic representatives from all over the world are scrambling to Tehran to woo Iran to do business with them. Analysts are predicting a turnaround of fortunes for the Iranians as well as transformation of the oil market mechanistic dynamics.

For Pakistan, Iran’s resurgence is nothing but good news, especially as far as the long-forgotten Iran-Pakistan pipeline project is concerned. There is now a reason to believe that some progress will be made in the changed set of circumstances.Before Iran was hit by international sanctions, bilateral trade between with Pakistan was around $1.6 billion annually. After the economy-crippling sanctions were imposed, Pak-Iran bilateral trade was reduced to around $300 million. Now that the West lifted its sanctions against Iran due to the nuclear deal reached in 2015, the Iranian economy and, consequently, Pak-Iran bilateral trade, are slowly recovering.

Having said that trade and energy cooperation between Pakistan and Iran can be increased through the revival of the Iran-Pakistan gas pipeline. The gas pipeline could meet 25 per cent of Pakistan’s energy needs. The total cost of the project is estimated at US$7.50 billion with the cost, on the Pakistani side, of about US$1.25 billion. The project would supply 750 mcft daily through its 1700 km length, and it is estimated that at least 5000 MW of electricity could be generated through the use of Iranian gas. The pipeline can also become a part of the larger China-Pakistan Economic Corridor initiative;.According to South Asia analyst Michael Kugelman, “Iran may have concerns about Gwadar from a geopolitical standpoint, given that Gwadar and the broader pattern of Chinese investment in Pakistan is a competitor to the India-led transport infrastructure project that centers around the port of Chabahar in Iran. Based on scale and amount of investment, the Chinese investments in Pakistan are more formidable than India’s in Iran.” Kugelman continues, “At the same time, Gwadar could have benefits for Iran. China has suggested its broader CPEC project in Pakistan could include financing the Pakistani side of a new gas pipeline from Iran. Also, China’s massive investments in Pakistan could merely be the precursor to broader Chinese regional infrastructure investments, including in Iran. Who knows – we could even see the Chinese making some contributions to Chabahar. Anything is possible.”

Pakistan is especially interested in improving and coordinating its economic relations with Iran. With the lifting of the international sanctions on Iran, all legal hurdles of doing trade with Iran have now been removed. This will give a boost to economic relations between the two countries and both the countries would no longer have to rely on indirect trade. While economic relations will be the major focus of future relations, there will be many foreign policy issues that will impact such relations. Of particular concern would be China’s efforts to develop the China-Pakistan Economic Corridor (CPEC), and Iran’s growing relations with India.

The mounting ties between China and Iran is an important factor that needs to be weighed by the leadership in Pakistan to immediately take necessary steps to ensure a trilateral cooperation among Pakistan, Iran and China. There is an added factor to push this kind of cooperation forward. During a visit to Iran by Chinese President Xi Jinping in January 2016, both Iran and China signed a US$600 billion trade deal. Both agreed to expand multidimensional ties and increase bilateral trade more than tenfold in the next decade. The two countries signed seventeen accords including agreements on cooperation in nuclear energy to become a part of China’s One Belt, One Road‟ initiative.

For Iran, the corridor would provide the  country with much  required openness to the  east. In  addition, Iran‘s  entrance in  this venture would  lead  to  an  era  of  improved  economic  development  across  the  Sistan-Baluchistan  province  by enhancing trade  between Pakistan,  China, and Iran  and would  offer a  cost-effective gateway to  the Gulf region for states like Russia and India. Presently, the need for Pakistan is to take into account the concerns of Iran especially if  Pakistan  wants to balance India‘s  influence  in the region and  wishes to fulfill the old dream of Iran-Pakistan gas pipeline. iran must look forward to the removal of non-tariff barriers and Pakistan must set mechanism to purchase oil from Iran instead of going miles away. Strategic importance of Gawadar does haunt neighboring countries but Pakistan has to mainstream this right strategic narrative of cooperation for greater good of both countries. Pakistan as friendly gesture could lay modes of connectivity between Chabahar and Gawadar.

Islamabad based freelance contributor and researcher. His area of research is south Asia special focus on china India relations.

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South Asia

Will CPEC be a Factual Game Changer?

Asad Ullah

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Pakistan’s economy is shrinking, and shrink economy always needs reforms, reforms either political, social or economic can be an upright source of wherewithal to fight preceding challenges. Since independence Pakistan is swathed with many serious issues, these are the issues which extremely hamper Pakistan’s economic growth. Nearly every political leader since independence didn’t pay courtesy to deal with problems, however, every political leader has tried to snatch public wealth through different means. For domestic development and trade balance Pakistan always went towards IMF toabailout. Recently in 2019 Pakistan again bailout of almost US$ 6 billion for 39 months.

Pakistan faces long-term economic challenges, including high budget and the debt deficit, low-income mobilization, low external vulnerability and less spending on education, social, health and many other sectors. This imitates the birthright of the jagged and cyclical economic policies of current years aimed at stimulating growth, but at the disbursement of growing weaknesses and persistent structural and institutional weaknesses, Pakistan failed to boost its economy. Thanks to Chinese One Belt One Road Initiatives, which will help Pakistan economy to grow self-reliant under the China Pakistan Economic Corridor CPEC.

The question of whether the so-called CPEC will certainly help Pakistan’s shrink economy or will abundantly abolish the nascent economic system where the Chinese investor will hold the power of the industrial sectors. Most of the leaders see CPEC is another obliteration for Pakistan economy. Furthermore, they believe that the CPEC will destroy the usual exquisiteness, for the construction of the roads, and Special Economic Zones (SEZs), they will cut down thousands of trees, many agriculture lands will convert to buildings, roads, and the pollution level will twofold compare to the present. They refused to ignore that CPEC is a game-changer for Pakistan but rather destruction for the country contemporary status quo.

Such questions got much attention in public, and researchers are worried about the specific outcome. As argued by many intellectuals the CPEC is win-win game, if CPEC allow China to the warm-water of the Arabian-Sea for smooth trade with less coast and safe route to save billions of dollars, so as for Pakistan the CPEC will bring a vast amount of employment opportunities, as well as trade prospects to the domestic people which will minimalize the level of unemployment, poverty, besides most importantly will link all those isolated people and their small business to the industrial hub as well as economic-cantered. 

The CPEC according to most of the observers parting optimistic impacts on Pakistan economy. It believes that the CPEC has generated more than 60,000 jobs for Pakistani in 2015 and expected to generate more than 800, 000 job opportunities in near future 2025. A report released by the Think-Tan of South Asia Investors, the CPEC will offer about two million direct as well as indirect jobs, which will boost the economy and will raise GDP growth to 7.5% compared to 5% present.

Additionally, the data revealed by the World Bank, that the GDP of Pakistan has increased remarkably for $244 billion in 2014 to $300 Billion in 2017. To be more specific the annual GDP of Pakistan improved from 5.2% in 2018to 5.527% in 2019, viewing continuous improving with time being. Consequently, from the above facts, we conclude that CPEC is a game-changer for Pakistan, which will not only build the infrastructure but importantly will boost the economy and will add millions of jobs, unswervingly contributing toward the GDP growth of Pakistan.

The story isn’t finished yet. The CPEC, on the other hand, emphasis on Special Economic Zones (SEZs), under the CPEC agreement, there are eight SEZs has been planned. The important aims of special economic zones SEZs are to sustain trade balance, increase employment, create jobs and increase investment. These are the zones where the trade and other business’s laws are different from the rest of the states though SEZs are located inside the border of a nation. As far as SEZs are concerned China experienced successful stories of the so-called SEZs.

Fortunately, most of the SEZs are also in those isolated areas like Baluchistan, Gilgit Baltistan and Mohmand Agency, these areas are almost disregarded by many preceding governments due to the deficiency of pecuniary resources. The infrastructure, education, and the health system of these areas are self-same diminutives. Hence, after the construction of SEZs in these areas, will not only pave the infrastructure but health and the standard of living will rise along with education and many other amenities. In conclusion, all these SEZs will create thousands of jobs across the country which will raise thousands of people from poverty, unemployment as well as improve the standard of living.

Considering the fact that CPEC has a positive impact on Pakistan’s economy, such impacts are strongly related to trade and investment. Since a longtime, China is a major and important investor in Pakistan. But the flow of goods and services, as well as the investment, has risen up particularly after 2000. Trade is thus important for economic development. The CPEC has tremendous positive impacts on the trade relation between China and Pakistan, as well as the neighbour’s states. The CPEC will improve the trade relationship between Pakistan and the neighbour countries in addition to a general trade opportunity directly or indirectly, which will improve the economic condition of Pakistan.

Finally, it’s concluded that economically the CPEC is the combination of SEZs, infrastructures, gas, and pipeline which will, of course, help Pakistan to overcome energy shortage, infrastructure problem, unemployment, eradicate poverty up to some extent and will raise the GDP.

In previous ten years, the country experienced political instability which blowout many domestic social, economic as well as a political problem, resulting in the high inflation rate, corruption, poverty, social isolation because of poverty and unemployment. These kinds of problems which up to a great extent affect the country’s economic and social system are predictable to change under the CPEC contract. This contract will not only boost the economy but will also change the social and cultural ways of life. People to people communication, adopting a new culture, the rise of the living standard are all related to the CPEC.

The CPEC will also bring socio-cultural changes such as educational exchange, training and skill exchange, media exchange and business exchange. Thus, the CPEC is a real game-changer for Pakistan, which will increase regional cooperation, peace and stability in the region, diverse investment opportunities, socio-economic development (education, water and gas supply, medical treatment, poverty alleviation), educational exchange, professional drill, and will improve safety and constancy in the areas.

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South Asia

Post-UNGA: Kashmir is somewhere between abyss and fear

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Hailed as a hero for calling out New Delhi’s draconian measures in occupied Kashmir, Imran Khan warned the world of a “bloodbath” once India lifts its lockdown of Jammu and Kashmir. He persuaded global leaders to denounce the brutalities and human rights violations unleashed on Kashmiris ever since the disruption of the decades old status quo, which had been granted by the symbolic autonomy of Articles 370 and 35(A) within the Indian constitution. The constitutional coup d état ensures the alienation of Kashmiris in IOK beyond the point of redemption with massive spillover effects across the LOC. Pakistan is home to 4,045,366 self-governed and independent Kashmiris as per the 2017 census, who are desired of more than a political and diplomatic support for their brothers in IOK. India and Pakistan have already fought three wars on the Kashmir issue.

Focusing on the brazen denial of core human values, Imran Khan prognosticated a more radicalized world as the scourge of radicalism finds more fodder in a discriminated society. If climate change is ignored, the clichés of religious affiliation continues and the inherent right of self-determination remains disregarded, violent reaction is inevitable. He said, “we all know that marginalisation leads to radicalization”… “No one did research that before 9-11, the majority of suicide bombers in the world were Tamil Tigers. They were Hindus”, but Hindus rightly escaped the blame since belief and religion has nothing to do with desperation.

Imran Khan talked more like Gandhi than the nation of Gandhi itself. He reminded the world of the reincarnation of the progrom and racial ridden medieval periods when religion and state were inseparable .It has reshaped and now resides more in inter-state relations while negatively stirring regional cooperation and globalization. Already enwrapped in a world of deprivation, the fifth largest population of South Asia is fearfully seen at the brink of a nuclear war with there being very few options left for a seven times smaller nuclear state of Pakistan, which has been already driven to the wall. The speech was well received and touched a chord with many Kashmiris reeling under the unprecedented communications blackout and travel restrictions in place since August 5.

“It felt like there is someone to watch our back. It felt that someone is talking for us, that we are not alone”, was the feeling commonly displayed. Hundreds of affected Kashmiri stakeholders came out of their homes, shouting slogans in support of Imran Khan and calling for the independence of Kashmir despite the movement restrictions and deployment of additional force by India in Srinagar.A fresh charge sheet has also been filed by the National Investigation Agency (NIA) of India against the chief of Jammu & Kashmir Liberation Front, (JKLF) Yasin Malik, and other leaders including Asiya Andrabi, and Masarat Alam on October 4, 2019.

Conjuring up his dystopian vision, Prime Minister Modi made no mention of the disputed region of Kashmir in his read-out speech at the UN along the lines of diplomatically bureaucratic explanation. He only ticked the fanciful boxes of development, progress, and world peace, annihilation of terrorism and protection of environment. This speech however, was soon followed by a threat from his own government’s defence minister calling for the liberation of Pakistani Administered Kashmir as the next step in India’s quest for regional dominance.

Moreover, Imran Khan has also expressed his fears in his erstwhile meetings with Donald Trump, Angela Merkel, Emmanuel Macron and Boris Johnson on the sidelines of the General Assembly session. Trump has offered mediation, but only if both Pakistan and India agree. A senior US diplomat for South Asia called for a lowering of rhetoric between India and Pakistan, while saying that Washington hoped to see rapid action by India to lift restrictions it has imposed in Kashmir and the release of detainees there. Similarly, State Councilor and Foreign Minister of China, Wang Yi, in his address to the General Assembly on 27 September stated that,;”The Kashmir issue, a dispute left from the past, should be peacefully and properly addressed in accordance with the UN Charter, Security Council resolutions and bilateral agreements.”

Nonetheless, an arrogant denial by India to the support of Pakistan’s stance on Kashmir by Turkey and Malaysia is more of an inept understanding of diplomacy and international commitment. India needs to step out of the skeptical comprehension of the role of the UN that was pronounced by Ms. Vidisha Maitra India’s Permanent Mission to the UN. The sway of diplomatic terms espoused with preconceived historical interpretations could be misguiding for political leaders. Modi needs to keep his ears close to the ground to save his political future. It is an extensional battle for Kashmiris. No concertina wire can blur the contradiction in his approach to the issue, “when they are in India they say it is an internal issue and when they are on the international forums, they consider it a bilateral issue,” said one of the residents of Srinagar. Confusion exacerbates the fear, which consequently becomes a forerunner to terrorism. Same goes for the US whose mediator’s role gets paradoxical by Trump’s close alliance with Modi in his perusal of Asia-Pacific policy. Though, Imran Khan is perpetually using his political and diplomatic influence proactively, to mobilize both the international community and his own people, the anti-India feeling, the pro-militancy sensitivity and the general sense of despair — is stronger than before in Kashmir.

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South Asia

Kashmir Issue at the UNGA and the Nuclear Discourse

Haris Bilal Malik

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The Kashmir issue has more significance in view of the nuclearization of South Asia as many security experts around the world consider Kashmir a potential ‘nuclear flashpoint’ between India and Pakistan. The revocation of the special constitutional status of Kashmir by the BJP government on August 5, 2019, also referred to as Jammu and Kashmir Reorganization Act 2019 and the subsequent lockdown in Kashmir has since considerably increased political and diplomatic tensions between India and Pakistan. India’s recent moves and actions in Kashmir have once again internationalized the Kashmir dispute. This was evident during the UN General Assembly’s 74th Session, where the Kashmir issue remained a crucial agenda item for several countries.

During this year’s session prominent leaders of the world condemned Indian brutalities in Kashmir. Turkish President Recep Tayyip Erdoğan criticized the international community for failing to pay attention to the Kashmir conflict and called for dialogue to end this dispute. Malaysian Prime Minister Dr. Mahathir Mohamad said that Kashmir “has been invaded and occupied” by India despite the UN resolution on the issue. Chinese Foreign Minister Wang Yi also discussed the issue and called for a peaceful resolution of the dispute based on the UN Charter and Security Council resolutions. Based on the grave importance of Kashmir as a potential ‘nuclear flashpoint’ between India and Pakistan, Prime Minister Imran Khan, while addressing the UNGA warned the world community about the dangers of a nuclear war that according to him might break out over Kashmir due to Indian atrocities. The current situation appears to be the most critical time for both the countries and the region as both countries are nuclear-armed.

However, unfortunately, the Indian leaders and media perceived Prime Minister Imran Khan’s warning as a nuclear threat and termed it as ‘brinkmanship’. Contrary to this perspective, it is worth mentioning here that the Indian leadership itself is involved in negative nuclear signaling and war hysteria against Pakistan in recent months. For instance, the 2019 Indian General Election campaign of Prime Minister Modi was largely based on negative nuclear signaling comprising of several threats referring to the possible use of nuclear weapons against Pakistan. Furthermore, as an apparent shift from India’s ‘No First Use’ (NFU) policy, on August 16, 2019Indian Defence Minister Rajnath Singh, while on a visit to the Pokhran nuclear test site paid tribute to the late former Prime Minister Atal Bihari Vajpayee and asserted that India might review its NFU policy. He stated that a change in future circumstances would likely define the status of India’s NFU policy. Since then there is no official denial of this assertion from India which indicates that India might abandon its NFU policy.

Moreover, India’s offensive missile development programs and its growing nuclear arsenal which include; hypersonic missiles, ballistic missile defence systems, enhanced space capabilities for intelligence, reconnaissance, and surveillance and the induction of nuclear-powered ballistic-missile-capable submarines clearly indicate that India’s nuclear weapons modernization is aimed at continuously enhancing its deterrence framework including its second-strike capabilities vis-à-vis Pakistan. This is also evident from India’s military preparations under its more recent doctrines such as the 2017 Joint Doctrine of the Indian Armed Forces (JDIAF) and the 2018 Land Warfare Doctrine (LWD)which are also based upon more proactive offensive strategies and indirect threats of pre-emptive strikes against Pakistan.

As evident from the above-mentioned developments, it seems likely that India aspires to increasingly project itself as a regional hegemon and a potential superpower. The BJP government under Prime Minister Modi inspired by the Hindutva ideology is taking offensive measures under the notions of ‘a more Muscular or Modern India’ based on strong military preparedness. In such circumstances, Pakistan’s threat perception would likely remain increasingly inclined towards its eastern border. Pakistan due to its economic constraints would also likely face considerable difficulties in competing with India toe to toe with respect to its military modernization plans. Pakistan is already punching well above its weight, and nuclear deterrence would be the only way through which Pakistan can maintain a precise balance of power to preserve its security. This could only be carried out by deterring India with the employment of both minimum credible deterrence and full-spectrum deterrence capabilities. This posture clearly asserts that since Pakistan’s nuclear weapons are for defensive purposes in principle, they are aimed at deterring India from any and all kinds of aggression.

Hence, at the present India’s forceful annexation of occupied Kashmir and the resultant nuclear discourse at the UNGA has further intensified Pakistan-India tensions. Under present circumstances, the situation could easily trigger another politico-military escalation between India and Pakistan. Prime Minister Modi has bet his political reputation on his move to annex the region and his political career is on the line. The same way Pakistan’s politico-military establishment is equally unlikely back down from its stance on Kashmir. It would be difficult for both countries to come down from the escalation ladder because politico-military reputations would be at stake at both ends. Consequently, Pakistan might be forced to take action before India’s modernization plans get ahead and might respond even sooner.

The nuclear discourse in Prime Minister Imran Khan’s speech against the backdrop of the Kashmir crisis at such a high forum like UNGA would likely keep the issue internationalized. The situation demands the UN fulfill its responsibility of ensuring peace and to prevent billions of people from the dangers of a nuclear war. However, Indian blame game, aggressive behavior and offensive nuclear signaling against Pakistan all present a clear warning of nuclear war. It would greatly limit the prospects for international mediation especially by the United Nations whose resolutions on Kashmir clearly provide a right of self-determination to decide Kashmir’s future.  

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