Monday, November 21, 2016

Pakistan's Regional Economic Integration: CAREC or SAARC or Both?

Pakistan sits between two economically very dynamic regions: Central Asia (and Western China) and South Asia. Which region is better suited for its economic connectivity and integration? Should Islamabad focus on CAREC (Central Asia Regional Economic Cooperation) rather than SAARC (South Asian Association of Regional Cooperation)?

Ideally, Pakistan should be a major player in both vibrant regions. However, Indian Prime Minister Narendra Modi's policy of attempting to isolate Pakistan has essentially forced it to choose.

First, Mr. Modi decided to boycott this year's SAARC summit that was scheduled to take place in Islamabad, Pakistan. Then, he unsuccessfully attempted to hijack the BRICS economic summit in India to use it as a political platform to attack and isolate Pakistan.  The signal to Pakistan was unmistakable: Forget about SAARC.

Central Asia Regional Economic Cooperation (CAREC):

CAREC is a growing group of nations that is currently made up of 11 members, including China and a list of STANs.   The current membership includes Afghanistan (joined CAREC in 2005), Azerbaijan (2003), People's Republic of China (1997), Georgia (2016), Kazakhstan (1997), Kyrgyz Republic (1997), Mongolia (2003, Pakistan (2010), Tajikistan (1998), Turkmenistan (2010) and Uzbekistan (1997).



The last ministerial meeting of CAREC nations was held in Islamabad in October, 2016. The conference theme was “Linking connectivity with economic transformation".

Welcoming fellow ministers, Pakistan's Finance Minister Ishaq Dar talked about the importance of the China-Pakistan Economic Corridor (CPEC) to improve trade flow within the region and with the rest the rest of the world.

Dar said CPEC offered a massive opportunity for connectivity between Central Asia, Middle East and Africa and was bound to play a defining role in economic development of the regions. Dar said improving the transport corridor was not an end in itself but it was an investment in establishing sound infrastructure and complementary frameworks for shared prosperity of the present and future generations in the region, according to a report in Pakistani media.

CAREC Corridors:

CAREC region is building six economic corridors to link Central Asian nations. Six multi-national institutions support the CAREC infrastructure development, including the Asian Development Bank (ADB), United Nations Development Program (UNDP), International Monetary Fund (IMF), World Bank,  Jeddah-based Islamic Development Bank and European Bank for Reconstruction & Development, according to Khaleej Times.

Out of the total $27.7 billion CAREC infrastructure investment so for, $9.9 billion or 36 per cent was financed by ADB, a senior officer of the Manila-based multinational bank told Khaleeej Times.

He said other donors had invested $10.9 billion while $6.9 billion was contributed by CAREC governments. Of these investments, transport got the major share with $8 billion or 78 per cent. Asian Development Bank Vice President Wencai Zhang said: "There are huge financing requirements in Carec for transport and trade facilitation, for which 108 projects have been identified at an investment cost of $38.8 billion for the period 2012-2020. Investment for the priority energy sector projects will be $45 billion in this period."

CPEC North-South Corridor:

China Pakistan Economic Corridor (CPEC) is a major part of the north-south corridor that will allow trade to flow among CAREC member countries, many of which are resource-rich but landlocked nations. The corridor will enable the group to access to the Pakistani seaports in Gwadar and Karachi as part of the new maritime silk route (MSR) as envisioned by China and Pakistan.

Pakistan's Finance Minister Dar says the CPEC would complement the regional connectivity initiatives of CAREC. "Once the six CAREC corridors and mega ports, now under construction, start operating, they will provide access to global markets. They will deliver services that will be important for national and regional competitiveness, productivity, employment, mobility and environmental sustainability. All of us should gear our national policies to achieve these targets."

CPEC consists of transport and communication infrastructure—roads, railways, cable, and oil and gas pipelines—that will stretch 2,700 kilometers from Gwadar on the Arabian Sea to the Khunjerab Pass at the China-Pakistan border in the Karakorams.

China and Pakistan are developing plans for an 1,800 kilometer international rail link from the city of Kashgar in the Xinjiang Uygur autonomous region in Western China to Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to Zhang Chunlin, director of Xinjiang's regional development and reform commission.



 "The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said at the two-day International Seminar on the Silk Road Economic Belt in Urumqi, Xinjiang's capital, according to China Daily.

"Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the project has already started," Zhang said. "China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang added.

Afghan Instability:

Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. A trilateral conference of China, Russia and Pakistan is scheduled this month in Moscow as part of this effort. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.

Summary:

History shows that growth of regional and global trade in East Asia, Europe and North America regions has been a major driver of economic opportunity and prosperity.  Unfortunately, SAARC has been a huge disappointment for Pakistanis.  With the development of CPEC and CAREC, Pakistan can now begin to participate in the growth of regional and global trade that will benefit the people of Pakistan.  The path to Pakistan's participation in SAARC will open up if or when India-Pakistan relations improve.

Here's a National Geographic Documentary on CPEC:

https://youtu.be/q2lWYxbIBCs




Related Links:

Haq's Musings

1800 Km Pak-China Rail Link

China Pakistan Economic Corridor

CPEC to Create Over 2 Million Jobs

Modi's Covert War in Pakistan

ADB Raises Pakistan GDP Growth Forecast

Gwadar as Hong Kong West

China-Pakistan Industrial Corridor

Indian Spy Kulbhushan Yadav's Confession

Ex Indian Spy Documents RAW Successes Against Pakistan

Pakistan FDI Soaring with Chinese Money for CPEC


39 comments:

Riaz Haq said...

The Countries Building New Silk Road -- And What They're Winning In The Process. #CPEC #Pakistan #China via @forbes

http://www.forbes.com/sites/wadeshepard/2016/11/22/what-win-win-along-the-new-silk-road-really-means/#22aa1adb5ab3

..almost as soon as the Soviet Union disintegrated, the countries of Central Asia and the Caucasus began looking for ways to reconnect again. Inspiration for the future was soon taken straight from the pages of history. During the days of what had retroactively been dubbed the Silk Road the countries of Central Asia acted as land bridge, connecting the booming markets of China with those in Europe. Ancient Silk Road cities like Xi’an, Samarkand, Merv, Aleppo, and Baghdad all acted as major transshipment and manufacturing centers, where middlemen would relay wares between all points of the Eurasian landmass. While there is certainly a large amount of romance attached to this simplified rendering of history, this rendering is serving as a functional road map as to how the region is moving forward and developing today.

Eurasia, as a contiguous continent stretching from the west of Europe to the eastern coast of China, is rapidly being drawn together into a massive market covering over 60 countries, 60% of the world’s population, 75% of energy resources, and 30% of GDP. Many plans have been brought forth by multiple regional players to guide this endeavor — the most dynamic of which is China’s multi-trillion dollar Belt and Road initiative — but the end goal of them all is the same: to create “win-win” solutions where all parties benefit by pursuing the similar goal of infrastructural development and economic integration.

“In order to create a situation where everybody is in the same boat in terms of economic development, they are putting together One Belt, One Road,” said Huang Jing of Singapore National University. “In other words, if everyone is economically in the same boat then if China goes up everybody goes up and if China goes down then everybody goes down. That’s the nature of the idea.”

-------


Pakistan currently finds itself caught in the middle of prolonged geopolitical and security quagmire. With a marked political struggle with India to the southeast, and having Iran to the west and Afghanistan to the north, the country’s economic potential has been very much stunted. Partnering with China on the China-Pakistan Economic Corridor (CPEC), a core part of the Belt and Road initiative, is seen as a key way not only for Pakistan to improve its energy capacities, enhance its infrastructure, and bolster its economy — and, ideally, assuage terrorism and other security threats in the process.

-----

Now a fundamental station on the China-led 21st Century Maritime Silk Road, Sri Lanka is engaging in large-scale infrastructure projects with China, which include Colombo Financial City — a financial center meant to rival Singapore and Dubai — a deep sea port in Hambantota, a new container terminal in Colombo’s port, the Mattala International Airport, and an impending 15,000 acre industrial zone that will reputedly attract 2,500 Chinese companies and create a million jobs. Although there have been multitudes of near catastrophic political, administrative, and debt problems associated with building this new infrastructure, the country’s prime minister still refers to it a once in a lifetime opportunity to jump-start development and generate a high-income society.

Riaz Haq said...

Dangerous Doval Doctrine: #Balochistan vs #Kashmir | Frontline. #India #Pakistan #Modi #BJP http://www.frontline.in/the-nation/balochistan-vs-kashmir/article9373742.ece …

The pursuit of a tit-for-tat diplomacy will not get India anywhere because Balochistan and Kashmir are not on a par, legally and politically. The time has come for India to drop the Baloch card and work for the settlement of Kashmir. By A.G. NOORANI
“PAKISTAN’s vulnerabilities are many times higher than us [sic]. Once they know that India has shifted gear from defensive mode to defensive-offence, they will find that it is unaffordable for them. You may do one Mumbai, you may lose Balochistan,” Ajit Doval, now Prime Minister Narendra Modi’s National Security Adviser, said at the 10th Nani Palkhivala Memorial Lecture at Sastra University, Thanjavur, on February 21, 2014. This was three months before he became NSA and the Manmohan Singh government was still in power.

The shock this Doval Doctrine of “defensive-offence” induced precluded any cool analysis of its implications (see the writer’s “The Doval doctrine”, Frontline, November 13, 2015). Doval was advocating a diplomacy of tit for tat with full knowledge of the perils it entailed, not least among them being the risk of matters getting out of hand in the retaliatory ladder of escalation. This becomes apparent when one moves from the doctrine to the specific, Balochistan.

Whoever perpetrated the Mumbai attacks committed a dastardly crime. But at no time did India ever allege that Pakistan’s top leaders were complicit in it. Is it not a wholly disproportionate retaliation to secure the detachment of one of Pakistan’s four provinces? Would its leaders, civil and military, sit back with folded hands when this is being attempted? And the Great Powers in the “Security Council”, especially China, which now has a stake in Balolchistan? And, pray, how does Doval propose to detach Balochistan? By military invasion? Far from it. Our “intelligence commando” has other plans whose elements are no secret. He proposes to do this by fomenting subversion through covert action. He could not possibly have made the claim (“you may lose Balochistan”) unless India had acquired significant “assets” there—as they are called in the idiom of covert operations—over the years. They cannot be acquired instantly. It is these existing assets, acquired, trained and funded over the years, which emboldened Doval to speak as confidently as he did.

Riaz Haq said...

#Pakistan Turns to #China in #Energy Binge With $21 Billion Investment. #Electricity #CPEC http://www.wsj.com/articles/pakistan-turns-to-china-in-energy-binge-1482062404 … via @WSJ


More than 10,000 Chinese workers are now building at least 10 partly Beijing-financed energy projects across Pakistan that are set to grow the country’s energy output by 60% within two years in the first major boost to supply in two decades.Mr. Sharif’s government plans to inaugurate a nuclear plant this month and a pipeline network in January that will carry large-scale gas imports upcountry.


“Never in the history of Pakistan has there been such a big package of electricity plants in the pipeline,” said Syed Akhtar Ali, in charge of energy at the Planning Commission, the ministry tasked with long-term development.

Mr. Sharif’s promise to solve the electricity crisis propelled him to office at a time when the energy deficit was knocking some 2 percentage points off growth, economists say, stifling industry and leaving school children to study by candlelight.

Pakistan’s economic growth has risen to almost 5% annually under Mr. Sharif’ and his government set a 7% target for the years ahead. That, his government hopes, will boost the moribund private sector, reduce unemployment and provide youth with more alternatives to extremism.

The energy plan is a centerpiece of that economic aspiration. Mr. Sharif is racing to fulfill his pledge and become the first incumbent to be re-elected in a country whose voters—or the interventionist military—have long ousted its leaders for their poor performance. Mr. Sharif, who led Pakistan twice before in the 1990s, hasn’t previously even completed a term in office.

“Electric power is going to be the swing factor in the election,” said Shahid Khaqan Abbasi, the minister for petroleum. “If we don’t deliver on power, we won’t be seen as having delivered.”

Mr. Sharif’s plan depends heavily on ​China, which​ is translating its long-term strategic ties with Pakistan into an economic partnership, part of a broader infrastructure push across Eurasia. China is financing many plants as commercial investments. But to expedite projects, the Pakistani government is funding ​some​ power stations in the run up to the election, including three gas-fired plants in Mr. Sharif’s home province of Punjab. The eventual aim is to more than double Pakistan’s current output of around 16,000 megawatts.

By comparison, Washington’s multibillion-dollar civilian aid program for Pakistan has been far less ambitious, adding 1,000 megawatts to the country’s power generation in recent years by enhancing existing power stations.

The plan is to add 10,000 megawatts of the new China-backed infrastructure, a mixture of coal, gas and hydro electricity, by early 2018, months before elections, at a cost of $21 billion. The schedule is tight. The massive amounts of natural gas and coal needed for the plants require an extensive delivery system of ports, pipelines and railways. The country also needs to upgrade its power distribution network to be able to carry the extra electricity.


“My concern is that gaps in longer term planning, including much needed structural, regulatory and market reforms, will once again fall by the wayside in the euphoria of having achieved a temporary electricity supply surplus,” said Jamil Masud, a partner at Hagler Bailly Pakistan, an energy consultancy,

---
At Karachi’s Port Qasim, a $2 billion coal-fired plant is taking shape. After only 1.5 years under construction, one 400-foot high cooling tower is up and the second is almost complete. The hulking metal frames for the boilers are in place and a jetty for imported coal is taking shape. Around 4,000 people work on the site, 24 hours a day—half of them Chinese workers who aren’t allowed to step outside its boundary.

On the other side of the port, a massive tanker ship serves as a terminal for liquefied natural gas imports, which are piped across Pakistan. Three more terminals are planned by the government.

Riaz Haq said...

#Pakistan #Railway track upgrade to include overpasses, underpasses & grade separation for high-speed trains #CPEC https://www.geo.tv/latest/124093-Railway-tracks-to-be-made-gate-free-and-signal-free-under-CPEC …

LAHORE: Railway tracks from Karachi to Peshawar will be made gate-free and signal-free under the next phase of the China-Pakistan Economic Corridor (CPEC), Geo News reported, citing sources.

A fence would be built around the tracks, similar to Motorway, and an underpass or overheard bridge would be built at every gate on the tracks, the sources said.

Work on the project would be initiated from January. The first phase of the project would focus on railway tracks between Rawalpindi and Peshawar.

The signaling system in Pakistan Railways will also be upgraded under the project.

According to the sources, the purpose behind making railway tracks gate-free and signal-free is to make train journeys safer and faster for the public. The fencing and bridges would also lead to a reduction in accidents.

Once the project is completed, the tracks would be able to accommodate high-speed trains. The railways authorities have completed the planning for the project, the sources added.

Riaz Haq said...

#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

Acting Chinese Ambassador to Pakistan, Zhao Lijian Monday said that his country would set up a large steel factory at Gwadar to further expedite economic developments being carried out under China-Pakistan Economic Corridor (CPEC) framework.
“Both China and Pakistan would very soon sign an agreement to establish the steel factory, three times bigger than the free economic zone being set up in Gwadar city,” he made this announcement while addressing participants of a day-long conference on CPEC: Potential and Prospects organized by Strategic Vision Institute (SVI) here.
He said, industrial cooperation was the forth pillar of CPEC initiative and both the country would discuss it in the next meeting of Joint Cooperation Committee (JCC) of CPEC to be held in Beijing this month.
“After completion of energy projects, transport infrastructure and development of Gwadar Port, industrial cooperation between China and Pakistan will be the main topic at the next JCC,” he added.
Zhao Lijian informed that China was working a lot for the development of Gwadar Port which was built with the Chinese government’s assistance.
He said, after completion, the port was handed over to Singapore but there was no improvement even after passage of five years.
Finally, it was given to the Chinese government by Pakistan government and the port was made functional and a ship carrying Chinese goods left for Africa.
He said, a business centre, hostel for different companies, fisheries processing plant with cold storage facility had been established in the free economic zone spread over around nine kilometers.
About Gwadar airport up-gradation, he said, the new international airport would have landing facility for all the modern aircraft including A-380 Airbus after completion, adding, prior to the up-gradation only C-130 or propeller-planes could land at the old airport.
The Acting Chinese Ambassador said, a 150-bed hospital was being built for the treatment of local people while a vocational institute had been set up for imparting training of different skills especially for the fishermen.
Talking about different energy project being completed under CPEC initiative in different parts of Pakistan, he particularly mentioned about the coal-based power plants which were being built in accordance with environmental standard set by the World Bank (WB) and other concerned international organizations.
He said, China produces around 60 percent of its total power generation through coal based power stations using modern and state of the art technology.
“The environmental concerns will be taken into consideration during the completion of these power stations,” he added.
Zhao Lijian pointed out hydro power plant, coal based power plants, wind power plants and solar based power plants were being set up to meet the electricity shortage in Pakistan.
He informed that the Karot Power Plant was being financed by the Silk Bank established by the Chinese government.
The groundbraking of Suki Kinari, Kohala Hydro Power Project would be held early next year, he said and added, Sahiwal Power Plant and Port Qasim Power Plant would be completed by next June and December respectively.
He said, a power plant set up at Thar coal site would also be inaugurated in next June.
He said, HUBCO power plant, one of the biggest coal-based power plant, would provide constant and stable power supply throughout the year.

Riaz Haq said...

#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

The Acting Chinese Ambassador said, the 50MW wind power plants and the 100-MW solar power plant set up at Balochistan would boost the power production and hoped there would be no loadshedding in Pakistan after completion of all energy projects.
Giving overview of transport infrastructure projects, he said, the Multan-Sukkur section of Peshawar-Karachi motorway would be completed at a cost of US$ 2.8 billion.
He pointed out that no other country was ready to support this project because of being less populated and having less-transport.
China came forward to build this project on Built-Operate-Transfer (BOT) basis in three years.
He said, KKH Phase-II would be completed at a cost of US$ 1.3 billion, adding, its Phase-I had already been completed while Phase-III would soon be planned.
About railways upgradation, he said, after completion of dual tracks, speed of trains could be enhanced upto 160 km per hours.
Speaking on the occasion, Chairman, Parliamentary Committee on CPEC, Senator Mushahid Hussain Sayed said, the CPEC initiative would be beneficial for not only Pakistan and China but also the South Asia and regions beyond.
He said, at a time when nobody was coming forward to help Pakistan, China extended support and confidence to its time-tested friend.
He informed that the land route of CPEC would connect 65 countries through Pakistan’s Gwadar port.
He said, China’s cooperation in energy sector, transport infrastructure development including railways upgradation, Gwadar port, development of Thar coal, Karachi-Peshawar motorway, employment to 10,000 Pakistanis and early harvest projects under CPEC had given a new impetus to economic growth.
“These projects have not only pushed Pakistan economic revival but also help integrate different parts of our country,” he added.
Mushahid opined that importance of Shanghai Cooperation Organization (SCO) had increased manifold for regional cooperation and after India’s stubborn attitude regarding South Asian Association of Regional Cooperation (SAARC).
In his welcome address, President, SVI, Dr. Zafar Iqbal Cheema said that the CPEC was not only a game changer for South Asia but also for Central Asia and regions beyond.
He said, CPEC would have global implications over the time, adding, it would promote trade and economic activities in the entire region.



Riaz Haq said...

#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

The Acting Chinese Ambassador said, the 50MW wind power plants and the 100-MW solar power plant set up at Balochistan would boost the power production and hoped there would be no loadshedding in Pakistan after completion of all energy projects.
Giving overview of transport infrastructure projects, he said, the Multan-Sukkur section of Peshawar-Karachi motorway would be completed at a cost of US$ 2.8 billion.
He pointed out that no other country was ready to support this project because of being less populated and having less-transport.
China came forward to build this project on Built-Operate-Transfer (BOT) basis in three years.
He said, KKH Phase-II would be completed at a cost of US$ 1.3 billion, adding, its Phase-I had already been completed while Phase-III would soon be planned.
About railways upgradation, he said, after completion of dual tracks, speed of trains could be enhanced upto 160 km per hours.
Speaking on the occasion, Chairman, Parliamentary Committee on CPEC, Senator Mushahid Hussain Sayed said, the CPEC initiative would be beneficial for not only Pakistan and China but also the South Asia and regions beyond.
He said, at a time when nobody was coming forward to help Pakistan, China extended support and confidence to its time-tested friend.
He informed that the land route of CPEC would connect 65 countries through Pakistan’s Gwadar port.
He said, China’s cooperation in energy sector, transport infrastructure development including railways upgradation, Gwadar port, development of Thar coal, Karachi-Peshawar motorway, employment to 10,000 Pakistanis and early harvest projects under CPEC had given a new impetus to economic growth.
“These projects have not only pushed Pakistan economic revival but also help integrate different parts of our country,” he added.
Mushahid opined that importance of Shanghai Cooperation Organization (SCO) had increased manifold for regional cooperation and after India’s stubborn attitude regarding South Asian Association of Regional Cooperation (SAARC).
In his welcome address, President, SVI, Dr. Zafar Iqbal Cheema said that the CPEC was not only a game changer for South Asia but also for Central Asia and regions beyond.
He said, CPEC would have global implications over the time, adding, it would promote trade and economic activities in the entire region.

Riaz Haq said...

Dr Jean-Francois Di Meglio, President of #Asia Centre in #France: "#CPEC is a game-changer for #Pakistan". #China
https://www.dawn.com/news/1303725/cpec-is-a-game-changer-for-pakistan

KARACHI: China may have more core benefits from the China Pakistan Economic Corridor (CPEC) but it’s a game-changer for Pakistan which will also benefit from it. Contrary to what some Europeans think, Pakistan has a strategic position in the region.

This was one of the main points raised by Dr Jean-Francois Di Meglio in his lecture on ‘The Economic, Strategic and Environmental Consequences of the New Silk Roads’ at the Area Study Centre for Europe (ASCE), University of Karachi, on Wednesday.

Dr Di Meglio, who is President, Asia Centre, France, said he was not an expert on CPEC so what he would talk about was based on his experiences. He said his talk was divided in two parts: Europe’s standpoint on the Silk Road project and China’s point of view.

Regarding the first part, Dr Di Meglio said when China announced the project in 2013, Europeans were doubtful about it. They thought since it was a 35-year project nothing could be achieved in the short term. They also thought that China was trying to rejuvenate something that used to exist in the past and there was no point doing it. Some people, however, harboured the notion that it was part of a grand plan. It was innovative because earlier the flow [of goods] was from West to East and now China was trying to reverse the direction of history.

Shedding light on what Silk Road used to be, Dr Di Meglio said in the late 20th century it was just a road but also entailed some key points and strategic places, one of which was the area crossing the border between Pakistan and Afghanistan. In modern history, he said, two significant events took place. The first was the Great Game between Russia and Britain at the end of the 19th century where Russia had accumulated wealth and wanted access to the sea; the other was the Afghanistan War that resulted in the disintegration of the USSR.

Dr Di Meglio said it was complicated for Europeans to talk about CPEC but countries like Germany and France had shown interest in it. With regard to negative feedback, some Central Asian countries were of the view that Russia was trying to re-establish links with China and the risk was that “China would be too much present”. But the Europeans discarded many important factors, he said.

On the Chinese approach to the situation Dr Di Meglio said [economic] reforms in China started in 1978 and after 35 years, in 2013, they came up with another project. If you looked at the dates, another 35 years added to 2013 would mean the arrival of the year 2048. In 2047 Hong Kong would come back to Chinese sovereignty fully; and 2049 would be the 100th anniversary of the People’s Republic of China. He said reforms brought in 1978 came through a simple process: enrichment. If the people were richer they would be easier to manage. The Silk Road had the potential of making some countries marginally richer. That could be done by building infrastructure and by linking them up with China.

Dr Di Meglio said CPEC was not an easy project but was not the most difficult to achieve either. There was room for Pakistani companies and politicians to take the initiative and speak to the Chinese for a level playing field as much as possible. Whosoever was going to benefit more from it, it was a game-changer for Pakistan. He argued that let’s say Pakistan was only benefiting 10 per cent from the project; even then you had other benefits like “influence” and “footprint”. He said some Europeans thought that Pakistan existed because there was a partition in 1947; they did not realise that Pakistan had an important strategic position.

On China’s ambitions, Dr Di Meglio said while it wanted prosperity and stability, it did not want domination in the region. China knew that in the past empires rose and fell. “The way to last long is not to dominate other countries but to play with them.”

Riaz Haq said...

Pakistan’s Response to Hybrid War on CPEC?
The over 100 Pakistani martyrs who were killed over the past week as part of the joint US-Indian Hybrid War on CPEC don’t need to have their sacrifices be in vain.

By Andrew Korybko - February 17, 2017


http://regionalrapport.com/2017/02/17/pakistans-response-hybrid-war-cpec/

Pakistan was attacked by terrorists over the past five days when eight separate blasts ripped through the country and reminded the world that Islamabad is on the front-lines in the War on Terror. Unlike after the end of the Soviet intervention in Afghanistan, this time it wasn’t just ‘wayward freedom fighters’ boomeranging back to their home base and setting off a chain reaction of blowback, but dyed-in-the-wool terrorists hell-bent on wreaking as much havoc as possible in order to offset China Pakistan Economic Corridor (CPEC).

Old Tactics for New Reasons

This major contextual difference is attributable to the redefined geostrategic significance of South Asia across the past couple of years. The CPEC has become the driver of China’s One Belt One Road (OBOR) global vision of New Silk Road connectivity and the poster project for the emerging Multipolar World Order, thus making Pakistan the “Zipper of Pan-Eurasian Integration” at the “Convergence of Civilizations”.

The US and its unipolar allies such as India have a completely different conception for how the future should look, and are dead-set opposed to CPEC for the simple reason that it would undermine their hegemonic ambitions. Instead of joining the project and contributing to a win-win solution for all of Eurasia, Washington and New Delhi have decided to sabotage CPEC out of the pursuit of their own subjectively defined self-interests.

Pursuant to this goal, both actors utilize Afghan-based terrorists in order to destabilize Pakistan, understanding that this can in turn reduce the attractiveness of CPEC to international investors and partners. The thinking goes that if high-profile terrorist attacks capture the global media’s attention, they’ll inevitably succeed in leading the worldwide audience to once more inaccurately conflating Pakistan with instability, which in turn feeds speculation and thus creates a dire risk for the business vitality of CPEC.

Riaz Haq said...

#China’s Economic Deals May Buy It Influence in #Pakistan That Eluded US #America. #CPEC

http://news.antiwar.com/2017/03/06/chinas-economic-deals-may-buy-it-pakistani-influence-us-long-sought/

US Military Aid on the Decline, Ties Seen Waning
by Jason Ditz, March 06, 2017
Print This | Share This
Large-scale military aid has been seen by a number of US Administrations as the sure-fire, one-size-fits-all solution for buying allies, and seeing value in cozying up to Pakistan during the occupation of Afghanistan, the US started throwing billions upon billions at Pakistan’s military.

It bought limited support, as US drone strikes and other regional policies were fueling anti-US sentiment at least as fast as the government to sign checks to try to keep the government placated. In recent years, the US is backing away from even trying.

China, however, sees Pakistan as a potentially valuable economic partner, and in the course of setting up massive economic deals is also offering substantial support for Pakistan’s infrastructure. Unlike the US military aid, which was always seen as cynical attempts to buy politicians, China’s aid seems to be embraced more broadly, with hopes that Pakistan’s struggling economy can get a rub from China’s massive growth.

In a nation with a long history of military coups, the US may have miscalculated in thinking they could buy Pakistan’s support with military aid, and China may go farther with efforts aimed primarily at helping state-run Chinese companies operating in Pakistan than that aid ever did.

Riaz Haq said...

#UN Security Council Endorses #CPEC (#Pakistan) and #China's #OBOR projects. #India unhappy. # via @htTweets

http://www.hindustantimes.com/world-news/un-security-council-resolution-includes-china-s-bri-india-s-pok-claims-in-jeopardy/story-k6isroFAMdnlA6NtX4nPKN.html


A UN Security Council resolution has for the first time incorporated China’s Belt and Road Initiative (BRI), a multi-billion inter-continental connectivity mission that has a flagship project passing through Pakistan occupied Kashmir (PoK).

The resolution, which extends an ongoing UN assistance mission to Afghanistan, says international efforts should be strengthened to implement the BRI, President Xi Jinping’s legacy project about which he first spoke in 2013.

Beijing claims it has rounded up at least 100 countries in BRI’s support, including Pakistan, Bangladesh and Sri Lanka.

India is yet to sign up for the initiative. Foreign secretary S Jaishankar spelt it out to the Chinese government in February that India has a “sovereignty” issue with the BRI because its flagship project, the China-Pakistan Economic Corridor (CPEC), passes through PoK. According to diplomats, India endorsing the BRI would mean giving up its claims on PoK.

The UN endorsing the BRI could complicate the situation as far as India’s claims are concerned.

The resolution in question renewed the mandate of the UN Assistance Mission in Afghanistan for one year. In it, the 15-nation UN body urged to promote security and stability in Afghanistan and the region “to create a community of shared future for mankind”.

“Also included in the newly adopted council resolution was China’s Belt and Road Initiative, which aims to build a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes,” official news agency Xinhua reported.

The resolution “welcomes and urges further efforts to strengthen the process of regional economic cooperation, including measures to facilitate regional connectivity, trade and transit, including through regional development initiatives such as the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (the Belt and Road) Initiative”.

The council resolution urged “further international efforts to strengthen regional cooperation and implement the Belt and Road Initiative”.

Besides the BRI, the resolution also mentions other projects like “regional development projects, such as the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, the Central Asia South Asia Electricity Transmission and Trade Project, the Chabahar port project agreed between Afghanistan, India and the Islamic Republic of lran”.

China has taken the inclusion of BRI in a UN resolution as a diplomatic victory of sorts.

Riaz Haq said...

A cautionary tale of #Pakistan's trade with #Kyrgyzystan in #CentralAsia. #Karachi #Bishkek #China #Afghanistan https://www.geo.tv/latest/134951-From-Karachi-to-Kyrgyz-a-made-in-Pakistan-story …

What connection does Naryn, a remote sparsely-populated mountain town in the Kyrgyz Republic, have with Karachi?

Located at a five-hour drive from the capital Bishkek, the sleepy town with a population of under 35,000, looks nothing like Pakistan. Other than the recently inaugurated campus of the University of Central Asia, even Google won't give you anything special about Naryn.

But Karachi-born Syed Mahir Shehzad has left his mark on the picturesque Central Asian mountain town.

From classrooms to the library, student dormitories to faculty and staff residences, Shehzad's Karachi-based office décor company has supplied every piece of high-end furniture at the 13,927 square metre UCA campus—almost all of it made in Pakistan.

"It was challenging for us not just in the sense that we had to compete with leading European companies, we—or pretty much any furniture company in Pakistan—had never exported to Kyrgyzstan," says the 36-year-old owner of Dimensions, which manufactures and assembles state-of-the-art modern office furniture competing with some of the leading brands in the world.

"We sourced some of our material from China, Malaysia and Indonesia, but a majority of it was assembled and manufactured in Pakistan, which we then mostly exported via trucks through the Pak-China border at Sust and then onwards to Naryn."

Owing to vast amounts of natural resources underexploited during the Soviet era, the five CACs –Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – make Central Asia a US$339-billion, 68 million-strong economy with varying levels of purchasing power and a largely untapped market.

But trade with Central Asian countries amounts to only a fraction of Pakistan’s dwindling exports, recorded at $26 billion in 2015.

----

Because of the uncertain security situation, Shehzad chose not to take the Pak-Afghan route.

"When we first got the project last year, we had no idea how we would export our goods to Kyrgyzstan. These are countries that we had never even thought of visiting, let alone export to. We faced a lot of trouble in even finding a logistics company that could transport our goods there," says Shehzad.

While Central Asia is becoming an increasingly important region, connecting Europe to South and West Asia, it can also be a challenging region for many new-to-the-market traders and investors.

Customs clearance in Central Asia is often said to be overburdened, with bureaucratic obstacles, arbitrary seizures of goods, excessive documentation, and a lack of proper protocols leading to significant delays.

With little support or guidance from the government authorities, Pakistani exporters face the same hurdles in reaching this largely untapped virgin territory.

"There was a lot of documentation. Our first containers got stuck in China shortly after crossing the Sust border. With only weeks to go for the launch of the campus, I had to wait for almost three weeks in Bishkek to face the nervous clients, before our transporter somehow managed to clear the trucks and bring them to Kyrgyzstan," says Shehzad.

Fortunately, after the first consignment, Shehzad says it took only five days for the rest of the trucks to reach Naryn from Karachi. "We were just ecstatic when the first trucks finally reached. From there on, it was just a matter of time. Even our clients were extremely proud."

The strategic Central Asia region can be a key market for Pakistani products, with lower labour costs in Pakistan giving the country a competitive advantage over European manufacturers

Riaz Haq said...

#India & #Pakistan in 8-member #SCO a boon for regional stability, development. #China #Russia #SCOsummit @XHNews http://news.xinhuanet.com/english/2017-06/08/c_136349784.htm …

The Shanghai Cooperation Organization (SCO) will witness its first-ever expansion at the upcoming Kazakhstan summit.
The inclusion of India and Pakistan, both major countries in the region, demonstrates the organization's growing appeal.
Once New Delhi and Islamabad officially in, the eight-member bloc will then cover nearly half of the world's population and three-fifths of the Eurasian continent. Its role in promoting regional stability and prosperity would thus be greatly boosted.
Since its founding in 2001, the SCO has encountered numerous naysayers and critics who have questioned its motives, principles and development.
Yet the organization's steadfast commitments to peace and growth in some of the world's most volatile nations have remained unshaken over the years.
That's because the SCO countries have shared great needs to maintain peace and security in the region, and even greater needs to foster faster economic development. These common interests outweigh their differences in political systems, cultures, social textures and levels of economic development.
After India and Pakistan are admitted to the SCO, they will enjoy broader anti-terrorism intelligence sharing with other partners within the bloc.
A mature multilateral mechanism such as the SCO will also help the two countries strengthen their trust-building process and enable them to work together to combat their common enemy -- terrorism.
Moreover, the SCO could also serve as a platform to better promote their shared economic and trade development, especially cooperation under the Belt and Road Initiative.
"The SCO has never been just a security group from the beginning. The Belt and Road Initiative offers a timely and convenient framework for the SCO members to facilitate connectivity and ultimately, achieve free flows of goods, capital, service and technology," said Sheng Shiliang, a researcher at the Xinhua Center for World Affairs Studies.
Sun Zhuangzhi, secretary-general of the SCO Research Center affiliated to the Chinese Academy of Social Sciences (CASS), said "comprehensive cooperation at all levels as part of the regional integration process is unstoppable. India cannot keep itself from this general trend for too long, it will come and join in like this time, sooner or later."
The impressive performance of the SCO in the past 16 years deserves greater global confidence in its ability to dispel doubts and divergences.
As Chinese President Xi Jinping and other heads of state gather in Astana for the SCO summit on Thursday and Friday, the world can expect that the organization, by absorbing two major regional countries, can help promote regional unity in the quest for a more secure and prosperous future.

Riaz Haq said...

Pakistan uses Iran corridor to transit fruits to Central Asia

http://www.xinhuanet.com/english/2017-12/26/c_136853593.htm

Recently major consignment of fruits from Pakistan to Kazakhstan has been transited through Iran which could open a new corridor for shipment of food items from Southeast Asia to markets as far as Russia, IRAN Daily reported on Tuesday.

The consignment that comprised 350 tons of tangerines was railed to Iran's southeastern city of Zahedan from Pakistan's Quetta and is on its way to the port city of Octave in Kazakhstan. It would be then loaded on ships to be transited to Russia, the report said.

In April, the first transit consignment from Quetta was sent to Octave through the same route. It comprised potatoes, mango, tangerine and rice, Press TV wrote.

Pakistan is expected to transit as much as one million tons of goods through Zahedan-Quetta railway every year, Majid Arjoni, the director general for Iran's Southeast Railway Department, said.

The railway is 650 kilometers long and it takes almost 33 hours for trains to travel between the two cities.

Iran hopes to use rail track for the transit of goods from its southeastern port of Chabahar to Central Asia and Europe in what would eventually become a major East-West corridor.

The project to develop Shahid Beheshti Port in Chabahar started in 2007 through investment of one billion U.S. dollars and President Hassan Rouhani inaugurated the port project early this month.

According to the report, the annual cargo tonnage of the port is currently almost as high as 8.5 million tons.

It can also accommodate 100,000-tonne ships, what officials say can help promote the country's international trade activities.

The overall development of the project will bring the port's total annual cargo capacity to 82 million tonnes.

Riaz Haq said...

#Modi's shift from #SAARC to Bimstec.Saarc leaders at Modi's swearing-in as PM in 2014. #BIMSTEC leaders for Modi's second oath taking ceremony on May 30. #India #Pakistan #SouthAsia https://www.indiatoday.in/india/story/story-behind-narendra-modi-s-shift-from-saarc-to-bimstec-1536707-2019-05-28 via @indiatoday

India has invited the leaders of Bimstec countries, extending it to Kyrgyzstan President and Mauritian premier for Narendra Modi's swearing-in as prime minister on May 30.

Five years ago, the oath taking ceremony of Prime Minister Narendra Modi was witnessed by top Saarc (South Asian Association for Regional Cooperation) leaders.

The occasion was the showpiece event of PM Modi's neighbourhood diplomacy. It began with optimism particularly in the context of Pakistan.

It was followed by unusual gestures including a mid-air diversion to then Pakistan Prime Minister Nawaz Sharif's family function and an unscheduled meeting during Shanghai Cooperation Organisation (SCO) summit in Kazakhstan's capital Astana in 2017.

Why this shift?

A series of cross-border terror (Pathankot, Uri and Pulwama) attacks hampered Modi's neighbourhood push in diplomacy. The Modi government has gone back to "talks and terror can't go together" stand putting India-Pakistan relation on a freeze. This was reflected in his invitation to leaders for his second oath-taking ceremony.

It appears that Bimstec was not on PM Modi's agenda till September 2016, when Pakistan-based terrorists targeted Uri base camp of the army. Uri terror attack jolted Modi government's trust in Pakistani leadership of fighting terror.

At Brics (Brazail, Russia, India, China and South Africa) summit in Goa, PM Modi also hosted an outreach summit with Bimstec leaders in October 2016. This was the first big push under the Modi government to India-Bimstec relationship.

So, when the Modi government boycotted November 2016 Saarc summit in Islamabad, almost all Bimstec countries supported India. Summit was postponed, Pakistan stood isolated in the grouping and India claimed diplomatic victory on the issue of terrorism.

Following the sudden change in regional equation, Bimstec emerged as a platform of neighbourhood engagement involving five of Saarc members and two Asean (Association of Southeast Asian Nations) constituents.

In 2017 Bimstec summit, PM Modi announced, "It is a natural platform to fulfill our key foreign policy priorities of Neighborhood First and Act East."

What is Bimstec?

Bimstec, standing for the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, is a regional grouping of Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.

Formed in 1997 with an aim to integrate littoral economies of the Bay of Bengal, Bimstec originally had only Bangladesh, India, Sri Lanka and Thailand. Myanmar, Nepal and Bhutan became its part later.

Currently, it includes all key South Asian nations except Afghanistan, Maldives and Pakistan. Many experts view it as India's effort to create an alternative mechanism to trouble-torn Saarc.

Bimstec is strategically significant for India as China has diverted its attention to the Bay of Bengal with greater assertion. The Bay of Bengal acts like a funnel to the Malacca Strait, a major trade route for China, which has also undertaken massive infrastructure projects in Bimstec countries except India and Bhutan.

The Bay of Bengal is the route for about 25 per cent of global trade and has huge untapped resources especially in the energy sector - massive reserve of natural gas, the future of power supply. India's robust relation with Bimstec will give it extra leverage in the Bay of Bengal region over China and other major powers.

Riaz Haq said...

#Asia #Pacific trade pact can go on without #India 'for the time being' as China grows impatient with the slow progress on the #RCEP talks. #Malaysian PM Mahathir proposes going ahead with just 13 countries — without #India, #Australia and #NewZealand. https://cnb.cx/2L91HdL

Malaysian Prime Minister Mahathir Mohamad said on Saturday that he’s willing to conclude a mega Asia-Pacific trade agreement without India “for the time being.”

Mahathir was referring to the Regional Comprehensive Economic Partnership, or RCEP, which involves 16 countries in Asia Pacific. Negotiations have been going on since 2013, with one of the major sticking points being India’s reluctance to open up its markets.

A recent report by Nikkei Asian Review said China, growing impatient with the slow progress on RCEP talks, proposed going ahead with just 13 countries — removing India, Australia and New Zealand from the deal.

The 16 countries involved in RCEP are the 10 Southeast Asian nations and six of their large trading partners: China, Japan, South Korea, India, Australia and New Zealand. If the agreement is finalized, the 16 countries will form a major trading bloc that covers around one-third of the world’s gross domestic product.

GP 190621 Containers at Lianyungang Port
Aerial view of shipping containers sitting stacked at Lianyungang Port on June 3, 2019 in Lianyungang, Jiangsu Province of China.
Wang Jianmin | Visual China Group | Getty Images
In an interview with CNBC’s Tanvir Gill, Mahathir acknowledged the hurdles in reaching a deal among the 16 countries.

“I think we will work towards it. It’s quite difficult because we are competing economies ... we’re competing with each other and from there, to go on to work together requires some radical change in our mindset. That will take time,” he said in Bangkok, Thailand, where he’s attending a summit for the Association of Southeast Asian Nations.

In the end, we have to stop this trade war and certainly not to escalate (it).
Mahathir Mohamad
MALAYSIAN PRIME MINISTER
The Malaysian leader added that RCEP participants will have to consider which framework works best: China’s proposed 13-nation deal or the original one involving all 16 countries.

“But I think I would prefer 13 ... for the time being,” he said, suggesting he’s open to having India, Australia and New Zealand joining the pact in the future.

Trade war escalation
Several participating countries of RCEP have expressed hopes of coming to an agreement by the end of this year, as they say the U.S.-China tariff fight has brought fresh urgency to wrap up talks in Asia Pacific.

U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet later this month at the G-20 summit in Japan. But Mahathir — like many who follow the developments closely — said he doesn’t expect much to come out of that meeting.


Taking sides in the trade war will be a ‘disaster for the world:’ Mahathir
Malaysia has often been cited as one of the beneficiaries of the trade war as companies move production out of China to circumvent elevated U.S. tariffs. Muhammed Abdul Khalid, an economic advisor to Mahathir, told CNBC in May that the Southeast Asian nation’s growth is set to gain an additional 0.1 percentage points due to the trade diversions to his country.

While that’s good for Malaysia, Mahathir on Saturday cautioned that such benefits may only be temporary. He explained that if there’s a change in government in the U.S., the new administration may have a new set of policies that could once again prompt companies to rethink where they want to locate their production and supply chains.

“In the short term, I think it is good news. But in the end, we have to stop this trade war and certainly not to escalate (it),” he said.

Riaz Haq said...

WORLD BANK LOANS $406MN TO #PAKISTAN FOR MOTORWAY between #Peshawar and #Kabul, thru Khyber Pass, as part of Corridors 5 and 6 of Central Asia Regional Economic Cooperation (#CAREC) of #Afghanistan, #Tajikistan and #Uzbekistan with Pakistan & Arabian Sea. https://www.newsweekpakistan.com/world-bank-loans-406mn-to-pakistan-for-kpec/

THE KHYBER PASS ECONOMIC CORRIDOR WILL COMPRISE A 48KM, 4-LANE MOTORWAY CONNECTING PESHAWAR TO TORKHAM
The World Bank on Friday inked an agreement with Pakistan for a loan of over $406 million to construct the Khyber Pass Economic Corridor Project.

Witnessed by Economic Affairs Minister Hammad Azhar in Islamabad, the loan agreement aims to facilitate the construction of a 48km, 4-Lane, dual carriageway high-speed motorway connecting Peshawar to Torkham.

Under the proposed project, regional connectivity would improve by facilitating commercial traffic and economic activities between Pakistan and Afghanistan would be boosted. It would also promote private sector development along the corridor and is expected to generate up to 100,000 new jobs in Khyber-Pakhtunkhwa province.

The project envisages the use of public-private partnership and private financing to develop clusters of economic activity, economic zones and expressways. According to state-run Associated Press of Pakistan, the connecting transport infrastructure and economic zones will provide a strong foundation for private businesses to invest in these zones.

The expressway between Peshawar and Kabul, through the Khyber Pass, represents a section of Corridors 5 and 6 of the Central Asia Regional Economic Cooperation (CAREC). Corridor 5, which runs through Pakistan, has the potential to provide the shortest link between the landlocked countries of Afghanistan, Tajikistan and Uzbekistan with the Arabian Sea.

Corridor 6 provides access to Europe, Middle East and Russia. Under KPEC, the Peshawar-Torkham expressway portion of Corridor 5 will be completed.

The Peshawar-Torkham expressway will also form an integral part of the planned Peshawar-Kabul-Dushanbe Motorway, APP added.

Azhar said the loan agreement indicated the World Bank’s resolve to support the development agenda of the incumbent government. World Bank Country Director Patchamuthu Illangovanwhile, at the signing, appreciated the reform initiatives of the PTI-led government, and committed to extend all possible facilitation and financial support to Islamabad in its efforts to promote economic activities in the country and to put the economy back on track.

Riaz Haq said...

Uzbekistan on Thursday formally sought Pakistan’s support for accession to the Quadrilateral Traffic in Transit Agreement (QTTA) in a bid to utilise Karachi and Gwadar ports for its trade operations.

The formal request was made by Uzbek Deputy Prime Minister Sardor Umurzakov during a video conference with Adviser to the Prime Minister on Commerce Razak Dawood. Uzbekistan’s Ambassador to Pakistan Furqat Sidikov also joined the meeting held at the Ministry of Commerce in Islamabad.

The QTTA is a transit trade deal among Pakistan, China, Kyrgyzstan and Kazakhstan to facilitate the passage of goods and traffic. A road project under the China-Pakistan Economic Corridor will provide access to China and the Central Asian States to Pakistani ports.

Responding to the request, Dawood assured Pakistan’s support for Uzbekistan in QTTA (Qudrilateral Traffic in Transit Agreement)

Pakistan plays a central role in the QTTA which is believed to be an alternative route bypassing Afghanistan and relying on the Karakoram Highway via China to reach Central Asian States.

Uzbekistan also sought the establishment of Joint Working Group for trade and investment cooperation.


https://www.dawn.com/news/1555445

Riaz Haq said...

Nine Central and Western Asian countries have signed an agreement in Tashkent that could pave the way for the creation of a regional energy market that could benefit billions of people from Europe to China.

https://www.rferl.org/a/will-massive-project-make-central-asia-the-core-of-regional-energy-market-/30227503.html

But success for the project would require tremendous financial investment and a great deal of trust and cooperation between countries not always known for having close ties.

Officials from Afghanistan, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan, and Uzbekistan met at the Central Asia Regional Economic Cooperation (CAREC) Energy Ministers’ Dialogue in late September to discuss how Central Asia’s energy export potential could be harnessed to bring electricity to markets in Afghanistan, Pakistan, China, and others, as well as opening up trade arteries to Europe.

A concluding declaration from the Tashkent meeting "sets the region on a faster reform path toward more liberal energy markets with greater private sector participation and investment, increased power connections and exchanges between countries, and a strong commitment to tap renewable energy sources and clean technologies."

The Asian Development Bank (ADB) launched the CAREC program in 2001 to "establish multimodal transportation networks, increase energy trade and security, facilitate free movement of people and freight, and [lay] the groundwork for economic corridor development."

Reconnecting Old Links

The project is designed specifically to improve the infrastructure in Inner Asia (broadly defined as regions in Central, East, and North Asia including parts of Mongolia, western China, and eastern Russia), giving the region new connectivity to countries in Far Eastern Asia, Europe, and the Middle East, but also bringing the Inner Asian countries closer together energywise.

The Energy Ministers’ Dialogue is an example of how the countries of Inner Asia could help one another by providing energy supplies rather than importing those raw materials.

At the core of this planned regional energy market is Central Asia -- an area rich in oil, natural gas, uranium, and possessing great potential for hydropower.

But it is also very important for the five Central Asian states to reconnect to each other, as they once did.

The five shared a unified energy grid in the last decades of the Soviet Union when a series of 83 mainly coal-fired power plants sent electricity across Central Asia, with Tashkent as the distribution hub. That system was especially important for mountainous Kyrgyzstan and Tajikistan, the keepers of water reservoirs that are vital to irrigation in Central Asia. Both countries have great but barely tapped hydropower potential, so receiving electricity from the three other Central Asian states was essential to homes and businesses in Kyrgyzstan and Tajikistan.

The breakup of the Soviet Union in late 1991 resulted in independence for the five Central Asian countries. But the energy grid remained -- and so did the dependence on one another for energy supplies, though not for long.

Turkmenistan withdrew from the Unified Energy System of Central Asia -- as the grid had been renamed -- in 2003. When Tajikistan drew too much power from the system in the early winter of 2009, the grid crashed and left parts of Uzbekistan without power. Tajikistan’s unilateral move also led to overloads and emergency shutdowns in Kazakhstan. Uzbekistan’s government quickly announced it was ending its participation in the unified grid. As the central dispatcher, Uzbekistan’s withdrawal meant the end of the grid.

Riaz Haq said...

Uzbekistan is the third landlocked state in recent years to request the use of Pakistani ports for trade, according to media reports. The Central Asian nation has asked to join Quadrilateral Traffic in Transit Agreement (QTTA) to make use of Karachi and Gwadar ports for its trade operations. Current members of QTTA are China, Pakistan, Kyrgyzstan and Kazakhstan. Afghanistan is not a member of QTTA but it currently uses Gwadar and Karachi ports under Afghanistan-Pakistan Transit Trade Agreement (APTTA). Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. The recent US-Taliban peace deal is the result of Pakistan's efforts to bring the warring sides to the negotiating table. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.

http://www.riazhaq.com/2020/05/carec-more-landlocked-states-look-to.html

Riaz Haq said...

#Trade-growth bid sees #Pakistan look nearer to home in #CentralAsia.“We’re too restricted to a few countries,” Abdul Razak Dawood, the commerce adviser to PM Imran Khan, said in an interview. “But there is a much bigger world.” #exports https://www.bloomberg.com/news/newsletters/2021-05-19/supply-chains-latest-trade-growth-bid-sees-pakistan-look-nearer-to-home via @business

Trucks carrying processed leather from Uzbekistan have arrived in Pakistan, a sign that the southern Asian economy’s efforts to expand land trade in its neighborhood are paying off.

The arrival of the cargo in the northwestern Pakistani city of Peshawar via Afghanistan marks the first step in Islamabad’s goal to grow commerce with central Asian nations to about $1.5 billion per year from less than $1 billion in the past decade.

Pakistan’s focus on central Asia is a departure from its reliance hitherto on three key markets — North America, European Union and China. Expanding trade with resources-rich Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan and Kazakhstan also fits Islamabad’s ambition of growing its industrial base.

“We’re too restricted to a few countries,” Abdul Razak Dawood, the commerce adviser to Prime Minister Imran Khan, said in an interview. “But there is a much bigger world.”

Pakistan is due to sign a transit and preferential trade agreement with Uzbekistan in July, he said, adding that an accord with Afghanistan would also be wrapped up by June.

Analysts see the new push in the context of Pakistan’s geo-strategic framework, which draws from the economic cooperation championed by Chinese President Xi Jinping as part of his Belt and Road Initiative.

While China has channeled investments toward electricity generation in Pakistan as part of its BRI deals, it’s financing has also been focused on gas- and oil-based projects for exploration and distribution in central Asia.

“Economy is one part of the strategic outlook,” said Vaqar Ahmed, a joint executive director at the Sustainable Development Policy Institute. “Ultimately you would need economy, trade and investment cooperation to keep excitement in your strategic interests.”

Riaz Haq said...

#US, #Afghanistan, #Pakistan, #Uzbekistan to form quad group to enhance regional connectivity for #rade, #transit links. The new quad group is important amid #China's desire to extend its Belt Road Initiative (BRI) to Afghanistan. #BRI #CPEC #SilkRoad https://www.thehindu.com/news/international/us-afghanistan-pakistan-uzbekistan-to-form-quad-group-to-enhance-regional-connectivity/article35377295.ece

The US, Afghanistan, Pakistan and Uzbekistan have agreed in principle to establish a new quadrilateral diplomatic platform focused on enhancing regional connectivity, the Biden administration has said.

“The parties consider long-term peace and stability in Afghanistan critical to regional connectivity and agree that peace and regional connectivity are mutually reinforcing,” the State Department said on Friday.

Recognising the historic opportunity to open flourishing interregional trade routes, the parties intend to cooperate to expand trade, build transit links, and strengthen business-to-business ties, it said.

“The parties agreed to meet in the coming months to determine the modalities of this cooperation with mutual consensus,” said the State Department.

Afghanistan’s strategic location has for a long time been touted as a competitive advantage for the country. Afghanistan is bordered by Pakistan to the east and south, Iran to the west, Turkmenistan, Uzbekistan, and Tajikistan to the north, and China to the northeast.

Located at the heart of the historic Silk Road, Afghanistan was long the crossroads of commerce between Asian countries connecting them to Europe, and enhancing religious, cultural, and commercial contacts.

The formation of the new quad group is important amid China's desire to extend its Belt Road Initiative (BRI) to Afghanistan.

The BRI, a multi-billion-dollar initiative launched by Chinese President Xi Jinping when he came to power in 2013, aims to link Southeast Asia, Central Asia, the Gulf region, Africa and Europe with a network of land and sea routes.

By virtue of its location, Afghanistan can provide China with a strategic base to spread its influence across the world.

Since the announcement of the withdrawal of U.S. forces by August 31, violence has been rising and efforts to broker a peace settlement between the Afghan government and insurgent Taliban have slowed.

Riaz Haq said...

Central Asia-South Asia connectivity may hinge on Pakistan-US relations
BY JAMES DURSO, OPINION CONTRIBUTOR — 10/20/21 05:40 PM EDT

https://thehill.com/opinion/international/577672-central-asia-south-asia-connectivity-may-hinge-on-pakistan-us-relations

What should the U.S. do?

Don’t be the spoiler: Blocking projects that may benefit the economies of Afghanistan and Pakistan will push Central and South Asia into the arms of Russia and China.

---------
Connectivity between Central Asia and South Asia is needed if the regions are to escape the gravitation pull of Russia and China. Turkmenistan and Uzbekistan, which border Afghanistan, have established relations with the Taliban government as many key economic projects require stability in Afghanistan.

In February 2021, representatives of Uzbekistan, Afghanistan, and Pakistan agreed to a roadmap for the Mazar-i-Sharif-Kabul-Peshawar railway project, a 600-km track to be built over five years. The rail project will run alongside regional power projects — the 1,000-megawatt Surkhan-Puli-Khumri high-voltage power line and the 1,300-megawatt CASA-1000 energy project — that supply power to Afghanistan and Pakistan. The final key project is the stalled 1,100-mile Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural-gas pipeline that can ship 33 billion cubic meters (bcm) of gas annually, and will relieve Ashgabat of Beijing’s leverage as China currently receives 90 percent of Turkmenistan’s gas.

Pakistan has successfully arbitraged its location by supporting the U.S. in two wars in Afghanistan and reaping significant financial benefits in the process. It is a partner with China in the $62 billion China Pakistan Economic Corridor (CPEC), the largest project in the Belt and Road Initiative. Now Pakistan may be Central Asia’s partner linking the region to maritime trade routes via the ports of Karachi and Gwadar, and Pakistan’s large internal market of over 200 million people, 60 percent of them under the age of 30.

In Afghanistan, the U.S. and Pakistan weren’t even fighting the same war. U.S. officials have accused Pakistan of a “double game,” but Islamabad was eyeing the “next game” — the conflict with India. The U.S. anticipated a formal end of hostilities after it defeated the Taliban and restructured Afghan society, but Pakistan knew even if the U.S. departed in victory, it would still have India to contend with and war in Afghanistan was just a way to position itself for the next phase of the struggle. Pakistan could use the Taliban to build “strategic depth,” recruit fighters it could deploy against India in Kashmir, and be paid for helping Uncle Sam. The Pakistani generals were channeling Paul von Hindenburg who, when he recommended the annexation of the Baltic Provinces into the German Empire said, “I need them for the maneuvering of my left wing in the next war.”

America sees wars as finite events that end at Appomattox Courthouse or on the battleship Missouri; Pakistan sees war as a process.

U.S. policy in Afghanistan is pretty much now just “women and girls,” which ignores that leaders in Central and South Asia are also responsible for women and girls. The U.S. should not allow its differences with the Taliban to block regional trade arrangements — which will have to include the Kabul government — and thereby hand a political win (and financial windfall) to Russia and China by limiting the region’s trade options.

A bill has been introduced in the U.S. Senate, the “Afghanistan Counterterrorism, Oversight, and Accountability Act of 2021,” that, among other things, directs the Biden administration to “develop a revised strategy for South and Central Asia,” and also requires an assessment of Pakistan’s support for the Taliban from 2001 to 2021.

Riaz Haq said...

#Pakistan, #China agree to execute ML-1 #Railway Up-gradation Project under #CPEC on a priority basis. The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China. #Transport- Business Recorder

https://www.brecorder.com/news/40161566

ISLAMABAD: Pakistan and China agreed to execute the much-awaited mega ML-1 Pakistan Railway Up-gradation Project under the China-Pakistan Economic Corridor (CPEC) on a priority basis.

The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China to follow up on the decisions taken during the recent visit of the prime minister to China.

Special Assistant to Prime Minister (SAPM) on CPEC Affairs Khalid Mansoor and Director-General NDRC co-chaired the meeting.

The ambassador of Pakistan in China also participated.

The meeting decided that Pakistan Railways would immediately contact the National Railway Administration (NEA) to work out further details of the project.

ML-1 project: design fault, inadequate consultancy cause delay

The meetings also discussed the schedule for holding of meetings of Joint Working Groups (JWG) for various sectors. It was decided that meetings of the Joint Working Groups for Industrial Cooperation, Information Technology, Science and Technology and Agriculture would be held in the near future.

The NDRC director-general said that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit.

The SAPM CPEC Affairs stated that the prime minister’s meeting with the Chinese leadership had been extremely fruitful and the relevant institutions of the two countries were fully geared to take the necessary steps to translate the understandings reached at the highest level into actual actions on the ground at the earliest.

The NDRC director general stated that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit. He said that the Chinese side attaches the utmost importance to the ML-1 project and several internal meetings between the National Railway Administration and other relevant institutions have been held to work out the modalities and prepare for execution of the first phase of the project.

The meeting also discussed projects in the power sector including the 300MW Power Project in Gwadar and the 1,320 MW Thar Coal Block-1 Power project. It was noted that all actions relating to these projects had been completed on Pakistan side. It was decided that the Chinese side would expedite the next steps relating to these projects.

The meeting expressed satisfaction at the pace of implementation of various projects in Gwadar such as the East Bay Expressway, New Gwadar International Airport, Pak-China Friendship Hospital, etc.

The SAPM on CPEC Affairs expressed his gratitude to the NDRC for their support and facilitation in forwarding the agenda of the CPEC.

Riaz Haq said...

China, Pakistan Agree to Launch $10 Billion Railroad Project
Two countries plan to upgrade line from Karachi to Peshawar
Pakistan officials have said they expect funding from China
By Faseeh Mangi


https://www.bloomberg.com/news/articles/2022-11-02/china-pakistan-agree-to-launch-10-billion-railroad-project

Chinese President Xi Jinping and Pakistani Prime Minister Shehbaz Sharif agreed in a meeting in Beijing to launch a high-speed rail project that could cost $9.85 billion, a move that comes as the world’s No. 2 economy moves to slow some of its lending due to growth concerns.

The two nations agreed to get started on the Main Line-1, according to a statement from Sharif’s office, which described it as “a project of strategic importance.”

That project involves upgrading a 1,163-mile, colonial-era track from Karachi to Peshawar to carry high-speed trains. Earlier this week, Pakistan formally approved the project, which has been in discussion for years, without saying where the funding would come from or providing technical details.

Officials in Pakistan have previously said they expected to get loans from China for the upgrade.

The US has in the past criticized China for using what it calls “debt diplomacy” to make developing nations more dependent on Beijing. Still, earlier this year China delayed a bailout for Pakistan as its debt soared, and it has been scaling back lending in Africa as its economy slows.

About 30% of Pakistan’s foreign debt is owed to China, including state-owned commercial banks, the International Monetary Fund said in a report in September.

In June, Moody’s Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns.

See: Xi Kicks Off Third Term With Flurry of Diplomatic Activity

In their talks, Xi and Sharif agreed to finalize details on an inner-city rail line in Karachi. The Chinese leader also said his nation would provide 500 million yuan ($68.7 million) to Pakistan to help it rebuild after flooding over the summer that displaced more than half a million people.

Also Wednesday, the two countries’ central banks signed a memorandum of cooperation on a yuan clearing in Pakistan, the People’s Bank of China said in a statement. It didn’t give more details.

Sharif is wrapping up a two-day visit to Beijing. China is hosting a flurry of foreign leaders this week, as Xi kicks off a norm-busting third term during which he’s vowed to increase his nation’s global influence.

Vietnam’s Communist Party chief Nguyen Phu Trong became the first foreign leader to meet Xi since the Chinese president removed rivals and installed loyalists at a leadership reshuffle last month.

Xi and his top officials are then expected to hold talks in the capital with German Chancellor Olaf Scholz and Tanzanian President Samia Suluhu Hassan. Later this month, he will likely travel to Indonesia and Thailand for major summits attended by global leaders including President Joe Biden and Russia’s Vladimir Putin.

Riaz Haq said...

CPEC an exemplar of high-quality Belt and Road cooperation


https://www.chinadaily.com.cn/a/202212/02/WS6389ad32a31057c47eba25f4.html


Pang Chunxue, deputy head of mission, Chinese Embassy, has said that China is planning to further deepen synergy between its development strategies and those of Pakistan.

The Islamabad Institute of Conflict Resolution (IICR) organized a policy conclave here in Islamabad, titled "CPEC's Defining Moment: Prospect and Challenges".

China and Pakistan will make full use of the Joint Cooperation Committee of the China-Pakistan Economic Corridor (CPEC), advance the CPEC with greater efficiency, and make the CPEC an exemplar of high-quality Belt and Road cooperation, Pang said while addressing the session.

While highlighting the benefits of the CPEC she said that as the landmark project of the BRI, CPEC has achieved fruitful results, bringing in $25.4 billion in investment, helping to add 6040 MW of electricity, 886 km of core national transmission network and 510 km of highways.

Under promotion of the CPEC, Pakistan's energy shortage has been greatly addressed, transport infrastructure has been improved, and local people have gained a large number of employment opportunities.

Lastly, she said that China will always put Pakistan as its priority for cooperation and work in joint hands to address various risks and challenges at the regional and international levels, deepen the China-Pakistan all-weather strategic cooperative partnership, and build a closer China-Pakistan community with a shared future in the new era.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf

Country with a high share of biomass: Pakistan
Pakistan has a high share of biomass in its energy consumption, which is expected to gradually reduce
as the share of natural gas increases. While Pakistan has a well-diversified energy supply overall,
with availability of oil, natural gas, coal, nuclear, and hydropower, it is expected to promote the use of
renewables considering future cost efficiencies and high technical potential.

-------------

Only two CAREC member countries currently operate nuclear power plants—Pakistan (1 GW of installed
capacity) and the PRC (48 GW). Both countries view nuclear power as a key part of their national energy
systems that provides a stable baseload of electricity. Two other members, Kazakhstan and Uzbekistan,
have initiated large-scale nuclear power plant projects, with commissioning planned prior to 2030. Both
countries are major producers of uranium, a key fuel for nuclear power plants, with Kazakhstan being the
largest producer of uranium globally. While nuclear power can offer significant advantages in terms of
scale and reliable power generation, a comprehensive system of security safeguards should be in place
to prevent malfunction and guarantee safe management of nuclear waste while respecting international
non-proliferation agreements.

----------

Several countries are also working on liberalizing their energy markets by shifting from vertically integrated
state-owned companies to unbundled energy markets. Such market structures reduce uncertainties for
private investors. For example, Tajikistan has unbundled Barqi Tojik, a vertically integrated electric utility,
into three independent companies, with each in charge of a different function: electricity generation,
transmission, and distribution. Georgia introduced power generation rules that were approved in 2020
in line with the principles of market liberalization, establishing a competitive electricity market. Pakistan
approved a comprehensive framework and implementation plan in 2020 aimed at building a competitive
wholesale power market by 2022.

------------------

The CAREC region’s cross-border ties and possibilities for trade provide another opportunity for investors.
For instance, the Central Asian Power System (CAPS) interconnects Central Asian countries (Kazakhstan,
Kyrgyz Republic, and Uzbekistan, with Tajikistan expected to be reconnected in 2022) at different voltage
levels. Some other large interconnection projects include the Trans Anatolian Natural Gas Pipeline,
supplying natural gas from Azerbaijan via Georgia to Türkiye and Europe; the Turkmenistan–Afghanistan–
Pakistan Power Interconnection; and the Turkmenistan–Afghanistan–Pakistan–India gas pipeline. While
predictions as to whether and when the last two projects can be commissioned are difficult because of
the political situation in Afghanistan, these projects highlight the solid potential of regional trade in the
CAREC region

------------

Almost 200 nations agreed to phase down coal usage at the 26th United Nations Climate Change
Conference of the Parties (COP26) in Glasgow in 2021 to tackle climate change. Forty-six nations stepped
up their pledges to phase out coal-fired power plants and only build new plants under the condition they
are equipped with carbon capture, utilization, and storage (CCUS) technology (Rives 2021). The Glasgow
Climate Pact calls on countries to revisit their emission reduction targets by the end of 2022 to try to
keep the 1.5°C Paris Agreement target achievable. More than 100 countries signed the Global Methane
Pledge announced by the US, EU, and other partners at the COP26, agreeing to reduce their overall
emissions by 30% by 2030, compared to 2020 levels (Maizland 2021). Seven CAREC countries (Georgia,
Kyrgyz Republic, Mongolia, Pakistan, the PRC, Tajikistan, and Uzbekistan) have submitted stronger NDCs

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf

Total installed power generation capacity in Pakistan is 34.5 gigawatts (GW), and consists
mostly of thermal generation, reaching around 66% of the total. The significance of thermal
generation is expected to decrease in the future, since the government has set a course to shift
toward increasing renewable energy (including hydropower) generation. Pakistan’s massive
renewable energy potential—about 3.0 terawatts (TW)—is one of the key drivers of this shift
(Figure 66).
• Pakistan’s domestic energy production consists of oil, natural gas, and coal. However,
insufficient investment in exploration and development activities has made the country
rely heavily on imports—nearly 40% of its total primary energy supply is imported. Having
insufficient cross-border infrastructure and no operating cross-border pipelines for the transit
of natural gas and oil, Pakistan imports energy sources mostly via coastal terminals.
• Final energy demand in Pakistan was about 96 million tons of oil equivalent (toe) in 2018, and
is projected to reach 108–126 million toe in 2030, depending on the scenario. Natural gas is
expected to increase its share in the total energy supply, while reliance on biomass will decrease,
leading toward a cleaner future for residential consumers.
• The country has vast renewable energy resources, with total technical potential reaching
2,900 GW for solar, 340 GW for wind, and 60 GW for hydropower (Faizi 2020; UNIDO 2016).
Increasing the share of hydropower could help in terms of grid balancing, solving the issue of
solar and wind intermittency.
• In addition to the development of renewable energy and alternative sources, such as nuclear
power, priority investments in Pakistan include the introduction of smart metering and smart
grids, as well as energy efficiency measures.
• Further development of the transmission and distribution (T&D) network is crucial for
the country, as 25% of the population is not grid-connected and thus has no access to the
electricity network.
• Total investment needs for the energy sector vary significantly across all three scenarios—
from $62 billion to $155 billion—illustrating the significant requirements for transitioning
to more sustainable sources of energy generation and implementing extensive energy
efficiency measures.
• Pakistan’s energy sector presents significant investment opportunities because of its efforts
to transition to a more competitive energy market structure, its continued support for private
projects, and the government’s commitment to significantly develop renewable energy sources
in the future.
• Several challenges need to be addressed to introduce a more favorable investment climate,
including circular debt issues, and the overall condition and coverage of the T&D grid.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf


Energy Sector Profile
Country Profile
Pakistan is the world’s fifth most populous country, with a population of more than 225 million people
and a $264 billion nominal gross domestic product (GDP), as of 2020. Pakistan’s population and economy
have grown at a steady pace, with the GDP growing annually by 4%–6%, and the population by 2%, since
2015. While the coronavirus disease (COVID-19) pandemic has slowed down economic growth to
0.5% in 2020, Pakistan is expected to recover, with a projected economic annual growth rate of nearly 6%
until 2025.
Pakistan’s energy sector is highly dependent on fossil fuel imports. Due to insufficient exploration and
development activities, the country is a major importer of fossil fuels, such as oil and coal. Moreover, issues
with ever-increasing demand and an inability to meet needs with existing power generation capacities
have forced consumers to use biomass as means of cooking and heating, especially in the agriculture
sector, which makes up most of the GDP. On the other hand, being one of the largest countries in the
region, Pakistan has vast renewable resources, such as hydropower, solar photovoltaic (PV), and wind, as
well as experience in power generation from nuclear power. However, the share of electricity production
from renewables has been decreasing since 2015, with fossil-fuel based generation on an upward trend in
development (Figure 67). This has led to increases in carbon intensity, putting Pakistan in 95th position
out of 172 countries in 2018. Energy efficiency measures in Pakistan require further development and
implementation. The country was ranked the 87th most energy-intensive economy in the world in 2018.

--------

Energy Sector and Technologies Assessment
Conventional Fuel Production
Pakistan’s domestic energy production consists of oil, natural gas, and coal. The country also has significant
undeveloped oil and gas potential. However, insufficient investment in exploration and development
activities due to pricing policies has limited Pakistan’s ability to achieve security of supply through domestic
energy production.
Domestic oil production in the country amounted to around 4 million tons in 2019, while total import
volume was more than 10 million tons. The main production sites are located in Punjab and Sindh
provinces. The country is also planning to expand its refinery capacities to meet growing demand,
with a target capacity of 48 million tons per year by 2030. In 2019, total natural gas production stood at
33 billion cubic meters (bcm), slightly lower than domestic demand. The Sui Gas field is the largest natural

gas field in Pakistan, accounting for 10% of total domestic production (Pakistan Petroleum Limited).
However, major oil and natural gas fields in the country are in the later stages of their lifecycle, with
gradually declining production volumes.
Coal in Pakistan is mainly produced in Balochistan, Punjab, and Sindh provinces. While production was
only 3.3 million tons in 2015, the country expanded its production to nearly 6.8 million tons in 2019.
However, the country still imported approximately 15 million tons of coal to satisfy demand. Overall, coal
resources in Pakistan are estimated at more than 3 billion tons.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf


Electricity Generation
Pakistan’s electricity sector has a total installed capacity of 34.5 GW, with thermal generation dominating
the power mix, having a share of 66% (National Transmission and Despatch Company 2020). Gas-fired
plants are the main source of power, having an installed capacity of almost 9.3 GW, while oil-fired power
plants have 6.5 GW installed capacity and coal-fired plants have 4.6 GW. Since the regulatory framework
allowed independent power producers to develop generation projects, multiple new thermal power
plants were constructed. As the country’s oil and natural gas reserves are diminishing, further growth in
alternative energy sources is needed.
Historically, hydropower was one of the main sources of electricity generation in Pakistan. The total
hydropower resource potential is estimated at 60 GW (Faizi 2020). However, with the expansion of
thermal power, its share in electricity has declined significantly and currently holds a 29% share of total
installed capacity. The country has 30 hydropower plants in operation, with a total installed capacity
of 9.9 GW, including 17 categorized as major hydropower and 13 as small hydropower units operating
mainly as a run-of-river units. The three main projects are Tarbela Dam (4.8 GW installed capacity),
Ghazi–Barotha (1.4 GW), and Mangla Dam (1.1 GW). Tarbela and Mangla dams, commissioned in the
1970s, are considered the main contributors to hydropower generation. To enhance the quality and
reliability of supply, Mangla Dam is planned for refurbishment, and Tarbela Dam for extension.
Pakistan’s first nuclear power plant, Karachi Nuclear Power Plant (KANUPP), began operations in 1970,
with a capacity of 100 megawatts (MW). Since then, nuclear power generation has experienced active
growth, and current capacity is 2.5 GW. Cross-country cooperation is a cornerstone of Pakistan’s strategy
to reach its goal of 8,800 MW of nuclear installed capacity by 2030. Currently, one new reactor of
1,100 MW is being built.
The country’s renewable energy potential has been realized to only a limited extent. The theoretical
potential of total wind energy is estimated at 340 GW, with the southern wind corridors being the most
auspicious—the Gharo–Keti Bandar wind corridor has over 50 GW of potential alone. However, only
around 1.1 GW of wind energy capacity is currently in operation. Likewise, solar power has tremendous
potential—as high as 2,900 GW, only about 0.4 GW of which is installed as of 2021. Although projects such
as the Quaid-e-Azam Solar Park (0.4 GW capacity) were successfully implemented, the lack of political
commitment, land availability, and the lower performance of outdated PV plants installed earlier are among
the reasons for limited development of renewable energy. Additional potential solutions include offshore
wind, floating solar PV in existing hydropower reservoirs, and wind farms near hydropower plants with
integration into existing grid infrastructure.
Country Outlooks 2030—Pakistan 1

Power generation during fiscal year 2020 reached 121,691 GWh: 32% by hydroelectric plants, 57% by
thermal plants, 8% by nuclear plants, and 3% by renewable energy power plants.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf



Transmission and Distribution
Pakistan’s power T&D system is suffering from significant energy losses and disruptions. In 2020, 19.8%
of energy was lost during its transmission, distribution, and delivery to end consumers. Among the
10 distribution companies, losses vary greatly from 9% to 39% (NEPRA 2020). On average, the country
experienced 81 interruptions (system average interruption frequency index) lasting nearly 5,300 minutes
(system average interruption duration index) in 2020. The poor performance can be attributed to a
variety of factors, including poor technical conditions, insufficient collection rate of accounts receivable,
and issues with circular debt present in the country.
Pakistan had 7,470 kilometers (km) of 500 kilovolts (kV) and 11,281 km of 220 kV T&D lines in 2020.
Distribution companies are responsible for T&D activities below 132 kV. Importantly, only 74% of Pakistan’s
population is connected to the power grid. With high electricity losses and frequent outages, Pakistan is
planning to introduce advanced grid management infrastructure and metering. Advanced conductors and
other smart grid upgrades could help reduce T&D losses.
There are two operators in Pakistan’s natural gas T&D system: Sui Northern Gas Pipelines Limited
(SNGPL), covering the central and northern regions of the country; and Sui Southern Gas Company
Limited (SSGCL), covering the southern regions. Total grid losses accounted for nearly 17% by SSGCL and
11% by SNGPL in 2020. According to estimates, average leakage rate is 4.9 leaks per km for SSGCL, and
2.2 leaks per km for SNGPL (for comparison, this value equals 0.2 in Germany and 0.4 in Massachusetts, on
average). The gas pipeline systems require a major overhaul and modernization to increase the efficiency
of transportation and to reduce leakages.

Cross-Border Infrastructure
In terms of cross-border power interconnections, Pakistan has one operational line as of 2021:
Mand–Jakigur, connecting Pakistan and Iran, with a capacity of 104 MW. In addition, Pakistan,
Afghanistan, the Kyrgyz Republic, and Tajikistan, have launched the Central Asia–South Asia (CASA-1000)
project, a mega power interconnection project of 1,300 MW. Pakistan’s part of CASA-1000 is currently
under construction, and is expected to transport electricity from Tajikistan and the Kyrgyz Republic. The
uncertain political situation in Afghanistan, through which CASA-1000 will transit to reach Pakistan, has
rendered difficult any predictions as to when and if the project can be successfully commissioned.
Natural gas is imported via sea terminals, mainly through two terminals located in the Qasim and Karachi
ports, with a cumulative capacity of 12 bcm annually. As of 2021, there are no operating cross-border
natural gas pipelines in Pakistan. However, in response to growing demand, the government has been
planning the construction of natural gas pipelines to increase import capacity, with the Iran–Pakistan
pipeline expected to be commissioned by 2025. The Turkmenistan–Afghanistan–Pakistan–India (TAPI)
pipeline has been discussed since more than a decade, but its realization remains uncertain given the
situation in Afghanistan and other political tensions between the participating countries. Further efforts to
bridge the supply and demand gap are planned with the construction of two additional terminals, bringing
total import capacity to nearly 18 bcm per annum.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf


Oil is also currently imported via sea terminals. Oil terminals (the Karachi port, the Qasim port, and the
Balochistan refinery single-point mooring terminal) are located near Karachi and have a total import
capacity of 51 million tons per year (Table 6).
Energy Consumption
Pakistan’s industry is dominated mostly by small and medium-sized enterprises in sectors such as
leather, textiles, and food processing. Most entities use fossil fuels as feedstock and run on outdated and
inefficient equipment. Cement and brick industries in Pakistan have historically been the two main energy
consumer groups. The combined potential of energy efficiency measures for these industries represents
about 40% of the total industry energy savings potential. Key levers include switching to multistage dry
kilns for cement or the introduction of modern designs, such as zig-zagging for brick kilns. The National
Energy Efficiency and Conservation Authority (NEECA) has been a main driver of progress, having
recently implemented a mandatory energy efficiency policy for electric motors, showing the government’s
commitment to increasing energy savings. The NEECA also plays a prominent role in promoting energy

audits in various industrial sectors. As a result of these efforts, Pakistan’s energy intensity declined
from 5.1 megajoules (MJ) per dollar of GDP in 2007 to 4.4 MJ per dollar of GDP in 2015. Despite these
developments, the institutional framework for energy efficiency requires significant further development
to achieve higher levels of efficiency across the board.
Energy efficiency measures in Pakistan often require region-specific optimization, especially in building
structures (for example, buildings in southern parts require more cooling than heating). One of the key
challenges is the inadequate energy performance standards of the Building Energy Code of Pakistan. The
Code focuses mainly on efficiency in commercial buildings, which was last updated in 2011, and failed to
introduce modern efficiency standards. For instance, the measures that might have the largest impact
in terms of energy savings include building envelope insulation and efficient lighting. Some efforts to
improve consumption efficiency can, however, already be observed—for example, the distribution of free
compact fluorescent lamps to replace inefficient incandescent bulbs and promote more energy-efficient
solutions for artificial lighting.
While the transport sector plays a leading role in the country’s economic activity, it is also the biggest
contributor to air pollution, with the transport sector making up more than 40% of total emissions.
Importantly, Pakistan has been experiencing a rapid growth in the number of vehicles in use, as the
share of households owning a car increased from 6% to 9% in 2021. Recognizing challenges related to
imports of oil products, the government actively promotes the use of electric vehicles (EVs). For instance,
the recently approved National Electric Vehicle Policy introduced tax incentives for imports and
production, and also set ambitious EV targets for 2030 (30% of newly sold cars and trucks, and 50%
of buses and two- and three-wheelers, to be EVs). In terms of railway transport, Pakistan relies solely
on diesel locomotives as of 2021—the country used to have 16 electric locomotives in the early 2000s,
but the government closed the lines and stopped using them after frequent copper theft incidents at
different points along the tracks. Still, Pakistan has continued efforts to improve efficiency by replacing old
locomotives, leading to substantial energy savings of 3.5 million liters of diesel in 2019.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf

Regulatory Framework
Upon obtaining independence in 1947, Pakistan introduced several authorities to regulate the energy
market (Government of Pakistan 1958). The Water and Power Development Authority (WAPDA), which
served as a key player in the power sector, was unbundled in the 1990s to ensure the establishment
of a liberalized energy market and fair competition. As a consequence, both private operators and
state-owned enterprises became eligible to participate in the generation sector via a single-buyer
scheme. The Generation, Transmission and Distribution of Electric Power Act has introduced a newly
established independent authority: the National Electricity and Power Regulatory Authority (NEPRA),
which regulates power sector companies and sets tariffs and operational standards. One of the key laws
on energy efficiency, the National Energy Efficiency and Conservation Act, established a National Energy
Efficiency and Conservation Authority, with a mandate to set the strategic direction and national standards
for energy efficiency measures (The Gazette of Pakistan 2016).
Two authorities, the Private Power and Infrastructure Board (PPIB) and the Alternative Energy
Development Board (AEDB), were established as the main institutions, providing support to private
energy project developers as well as investors (Government of Pakistan, AEDB 2006; The Gazette o

Pakistan 2012). Each board has been established for specific projects: the PPIB was created and tasked to
approve conventional generation projects, while the AEDB was responsible for the approval of renewable
energy projects.
Fossil fuel production in Pakistan is regulated by a set of rules for oil, natural gas, and coal, which govern
the process of obtaining permission for the exploration and production of fossil fuels. The Oil and Gas
Regulatory Authority (OGRA) is a primary regulator of the market and licensing authority. The Authority
issues licenses for coal, oil, and natural gas through a competitive bidding process. Coal and petroleum
development and production licenses are given for 25 years, with the possibility of renewal for 5 years.
With increasing market transparency and private sector participation in energy projects leading to
growing investments, the country has introduced a general concept for a competitive electricity market.
These new rules, already published by NEPRA and coming into force in 2022, are regulating the transfer
from a single-buyer model to a competitive model in the wholesale segment (Khan 2020).
The natural gas market, in contrast, is still operating under the single-buyer scheme, and a competitive
market for natural gas supply is yet to be introduced, as state-owned utilities act as single monopolies.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf


Policy Framework
Several governmental decrees have set the policy framework for the energy sector. The main government
priorities in power generation were outlined in the Power Generation Policy and Transmission Line Policy
in 2015 (Government of Pakistan, PPIB 2015). The priorities for renewable energy were set in 2019 in
the Alternative and Renewable Energy Policy (Government of Pakistan 2019). The government has also
published a National Energy Conservation Policy to promote the use of domestically available resources.
The following priorities were outlined in the abovementioned policy documents:
(i) Development of renewable energy. With the established target for renewable energy
generation in the electricity mix (up to 30% of nonhydropower renewables and 30% of
hydropower by 2030), Pakistan aims to attract more investment into its renewables sector
(Qasim 2020). The government has already started facilitating investments in sustainable
energy sources, mainly by encouraging lower tariffs via introducing competitive bidding and
offering tax benefits as well as incentives for local production of renewable energy equipment,
such as solar panels and wind turbines.
(ii) Improvement in energy efficiency. Pakistan aims to increase the energy sector’s profitability
and sustainability by reducing energy losses as well as increasing energy efficiency. Specifically,
to realize the country’s considerable energy-saving potential of, on average, 25% in key sectors
(industry, residential, transport, and agriculture), the NEECA will be implementing a number of
policies: developing necessary regulations, introducing the national scheme for certified energy
auditors, establishing national Energy Efficiency awards, etc.
(iii) Introduction of a competitive energy market. As stated in the country’s Power Generation
Policy, Pakistan aims to provide sufficient power generation capacity and high-quality energy
services at the least cost. The country plans to achieve that by enhancing fair competition and
market liberalization. In 2020, NEPRA approved a detailed framework and implementation plan

for a competitive trading bilateral contract market, the main goal of which is to establish the
competitive wholesale electricity market with multiple sellers and buyers by 2022.
(iv) Promotion of domestic exploration and production of oil and natural gas resources. Through
optimized pricing and licensing mechanisms, Pakistan wants to further develop its domestic
production of fossil fuels to become more self-reliant and reduce its dependence on imports
(the share of imports constituted around 40% of the total primary supply in 2018).

Forecast Methodology
One of the objectives of this country study is to present a detailed overview and analysis of future energy
market trends in Pakistan. For this purpose, three scenarios were developed, considering the country’s
regulatory framework, technological development, and consumer preferences, among other factors
(Box 17). Supply and demand, technology, carbon emissions, and investment outlooks were derived
based on these scenarios.

Riaz Haq said...

CAREC ENERGY OUTLOOK 2030

https://www.adb.org/sites/default/files/publication/850111/carec-energy-outlook-2030.pdf

Supply and Demand Outlook
Rapid economic development and population growth in Pakistan are the main drivers for growth in
primary demand, which is projected to increase from 111 million toe in 2018 to 125–154 million toe in
2030, depending on the scenario. Demand has fallen during the COVID-19 pandemic, with nearly
a 4% decrease from 2019 to 2020, although rapid recovery and growth in demand is expected. In the
Business-as-usual (BAU) scenario, primary energy demand grows significantly at an annual rate of
3.1%, as this scenario assumes low to moderate efficiency gains and limited reductions of T&D losses.
As for the Government Commitments scenario, annual growth is lower, at 1.4%, due to higher efficiency
gains and lower grid losses. The Green Growth scenario shows the lowest compound annual growth rate
among the three scenarios, with only 1.2% growth until 2030, assuming the greatest reduction of energy
intensity (Figure 68).
In terms of energy sources, natural gas remains the most important energy resource in all three scenarios,
driven by the country’s large fleet of gas vehicles, and by direct consumption in the residential and
industrial sectors.
Box 17: Scenarios for Pakistan’s Energy Sector
Business-as-usual scenario: Projected energy supply and demand, with current energy system and policies;
Government Commitments scenario: Projected energy supply and demand, considering individual priorities of
the Government of Pakistan; and
Green Growth scenario: Projected energy supply and demand, considering enhanced energy transition and
environmental policies.

Electricity generation in Pakistan is mainly dominated by fossil fuel sources, specifically natural gas and oil.
Alternative energy sources in Pakistan consist mainly of hydropower and nuclear, while the share of wind
and solar PV is much lower. The Government Commitments scenario assumes a large share of renewables
in the mix, followed by a decrease in fossil fuel-generated power. The BAU scenario assumes a slower
expansion of renewable resource generation, leading to prolonged reliance on fossil fuels in 2030. In both
Government Commitments and Green Growth scenarios, many natural gas- and oil-fired power plants
are decommissioned, and their capacities are replaced by renewable energy.
Nonetheless, a shift toward renewables is evident in all scenarios via the expansion of hydropower
capacities and the further expansion of wind- and solar-powered plants. The Green Growth scenario
assumes the most ambitious development of nonhydropower renewables, leading to a 20% share of
wind and a 10% share of solar PV in 2030. Under the Government Commitments scenario, the share of
wind reaches 16% and solar PV is 9%, compared to much slower developments under the BAU scenario,
where wind energy reaches 7% and solar PV only 2%. Furthermore, reflecting a broad push toward the
development of hydropower, the expansion of hydropower capacity is assumed in all scenarios, with the
highest being in the Green Growth scenario (43% of the total generation mix) (Figure 69).

Riaz Haq said...

Pakistan, Uzbekistan sign MoUs to increase bilateral trade to $1bn


https://www.dawn.com/news/1728370/pakistan-uzbekistan-sign-mous-to-increase-bilateral-trade-to-1bn


Pakistan and Uzbekistan on Monday finalised agreements to expand investment and increase bilateral trade to $1 billion.

To this end, Commerce Minister Naveed Qamar and Uzbek Deputy Prime Minister Khodjave Jamshid Abdukhakimovich signed nine Memoranda of Understanding (MoUs).

Talking to the media on the occasion, Qamar said the two countries had decided to implement the Preferential Trade Agreement from February 1, 2023.

In a press release issued afterwards, the commerce ministry said the two countries also discussed the implementation of the Agreement between Uzbekistan and Pakistan on Transit Trade (AUPTT) and Uzbekistan would notify rules in this regard in February.

They also decided to undertake a joint visit to the Afghan capital in the last week of January to discuss problems faced by Pakistani and Uzbek transporters.

“Both sides agreed to formulate a joint strategy for transit trade through Afghanistan. Regional understanding on Transit and Trade Framework to be prepared including joint fund/mechanism for the upkeep of road infrastructure in Afghanistan.”

Uzbekistan requested an off-dock terminal at Karachi and Gwadar ports and was assured full facilitation, the statement added.

Besides this, the countries also decided to hold trade exhibitions and prepare a strategy to cooperate in e-commerce.

The Uzbek delegation is scheduled to meet a number of officials during its visit, including Prime Minister Shehbaz Sharif.

Uzbek President Shavkat Mirziyoyev had visited Pakistan earlier this year. During his visit, a number of agreements and MoUs were signed by the two sides. An MoU was signed between Uzbekistan’s Ministry of Tourism and Sport and Pakistan’s Ministry of Religious Affairs and Interfaith Harmony to promote religious tourism. Another MoU was inked between the two states in the field of environment and climate change.

Pakistan and Uzbekistan have been closely collaborating at regional and international fora especially at the United Nations, Organisation of Islamic Cooperation, Economic Coop­eration Organisation, and Shanghai Cooperation Organisation.

Riaz Haq said...

ML-1, KCR (Karachi Circular Railway) upgrade projects to start in March

https://www.thenews.com.pk/print/1026277-ml-1-kcr-upgrade-projects-to-start-in-march

He (Ambassador Non Rong) recalled that under the CPEC, 192,000 jobs were created, 6000MW of electricity was generated, 510 km of highway was constructed and 886 km of transmission was set up, which laid a solid foundation for Pakistan’s socio-economic development. “In fact, Pakistan’s trade surplus of agricultural products is expected to exceed a record high of $1 billion in 2022,” the ambassador said.

The Chinese sources said the ML-1 is the largest infrastructure project of CPEC worth $6.86 billion. The project involves the up-gradation and dualization of ML-1 to increase the operating speed from the current 60 km/h and 105 km/h to a proposed 160 km/h. The project also involves the establishment of a dry port near Havelian. ML-1, the Karachi to Peshawar line, is one of four main railway lines in Pakistan, operated and maintained by Pakistan Railways. The line begins from Karachi City Station or Kiamari station and ends at Peshawar Cantonment Station. The total length of this railway line is 1,687 kilometers. There are 184 railway stations from Kiamari to Peshawar Cantonment on this line. The line serves as the main passenger and freight line of the country. 75 percent of the country’s cargo and passenger traffic uses the ML-1. The existing timeline for the completion of ML-1 extends to December 2024. Under the umbrella of this project, level crossing will be converted into flyovers or underpasses so that the speed can be increased by getting rid of the obstacles.

The project could not be started during the PTI government due to China’s concerns over debt repayment plan, the sources pointed out. ML-I railway line project is very important to achieve connectivity between Gwadar (Pakistan) and Kashgar (China) through a train track that will provide the easiest and safest way to transport oil between China and the Middle East, saving China travel costs. The railway line upgrade will provide faster travel facilities to the people of Pakistan and commercial benefits like bringing raw materials to the Special Economic Zone (SEZ) and faster delivery of finished goods to remote areas of the country as well Gwadar port. Another great benefit is that coal will be delivered for fuel to the power plants through the railway track, which will also generate good revenue for the railways. Due to unnecessary delays, the cost of this historic project has increased. The Imran’s PTI government failed to convince the IMF and the Chinese government to start the project. Another reason for the increase is the recent floods in Pakistan, which has destroyed the railway lines of most parts of the country. As soon as the new government was formed in April, 2022, Pakistan’s Minister for Planning Ahsan Iqbal restarted the discussion with the Chinese authorities on revival of the project.

The revived KCR operation is intended to become an inter-regional public transit system in Karachi, with an aim to connect the city centre with several industrial and commercial districts within the city and the outlying localities. In May 2017, the then government approved Rs27.9 billion ($120 million) restoration package for the KCR. However, delays and disputes with the Sindh provincial government ultimately led to cancellation of the funding. KCR would be constructed with the cost of Rs294 billion and used by 500,000 passengers/day, which would increase to 1 million in later years. KCR will have 250 modern driverless electric bullet trains, which would run 17-hours a day throughout a week. The KCR project would be run by the Sindh government through Karachi Urban Transport Corporation (KUTC) and likely to be completed by 2025.

Riaz Haq said...

CPEC Results According to Wang Wenbin of China

https://twitter.com/bilalgilani/status/1677391745112477696?s=20

Bilal I Gilani
@bilalgilani
CPEC projects are creating 192,000 jobs, generating 6,000MW of power, building 510 km (316 miles) of highways, and expanding the national transmission network by 886 km (550 miles),” Foreign Ministry spokesman Wang Wenbin told reporters in Beijing."


Associated Press of Pakistan: On July 5, Prime Minister Shahbaz Sharif while addressing a ceremony to mark a decade of signing of the China-Pakistan Economic Corridor (CPEC), said that CPEC has been playing a key role in transforming Pakistan’s economic landscape. He also said that the mega project helped Pakistan progress in the region and beyond. What is your response?

Wang Wenbin: The China-Pakistan Economic Corridor (CPEC) is a signature project of China-Pakistan cooperation in the new era, and an important project under the Belt and Road Initiative. This year marks the 10th anniversary of the launch of CPEC. After ten years of development, a “1+4” cooperation layout has been formed, with the CPEC at the center and Gwadar Port, transport infrastructure, energy and industrial cooperation being the four key areas. Projects under CPEC are flourishing all across Pakistan, attracting USD 25.4 billion of direct investment, creating 192,000 jobs, producing 6,000 megawatts of electric power, building 510 kilometers of highways and adding 886 kilometers to the core national transmission network. CPEC has made tangible contribution to the national development of Pakistan and connectivity in the region. China and Pakistan have also explored new areas for cooperation under the framework of CPEC, creating new highlights in cooperation on agriculture, science and technology, telecommunication and people’s wellbeing.

China stands ready to work with Pakistan to build on the past achievements and follow the guidance of the important common understandings between the leaders of the two countries on promoting high-quality development of CPEC to boost the development of China and Pakistan and the region and bring more benefits to the people of all countries.

https://www.fmprc.gov.cn/eng/xwfw_665399/s2510_665401/2511_665403/202307/t20230706_11109401.html

Riaz Haq said...

The mega undertaking (China-Pakistan Economic Corridor or CPEC) has created nearly 200,000 direct local jobs, built more than 1,400 kilometers (870 miles) of highways and roads, and added 8,000 megawatts of electricity to the national grid, ending years of blackouts caused by power outages in the country of 230 million people.


https://www.voanews.com/a/top-china-official-visits-pakistan-marking-cpec-milestone/7204256.html


Chinese Foreign Ministry spokesman Wang Wenbin told reporters in Beijing earlier this month that CPEC projects "are flourishing all across Pakistan," making a "tangible contribution" to the national development of the country and to regional connectivity.

But critics say many projects have suffered delays, including several much-touted industrial zones that were supposed to help Pakistan enhance its exports to earn much-needed foreign exchange.

The country's declining dollar reserves have prevented Islamabad from paying Chinese power producers, leading to strains in many ties.

Pakistan owes more than $1.26 billion (350 billion rupees) to Chinese power plants. The amount keeps growing, and China has been reluctant to defer or restructure the payment and CPEC debts. All the Chinese loans – both government and commercial banks – makeup nearly 30% of Islamabad's external debt.

Some critics blame CPEC investments for contributing to Pakistan's economic troubles. The government fended off the risk of an imminent default by securing a short-term $3 billion International Monetary Fund bailout agreement this month.

Security threats to its citizens and interests in Pakistan have also been a cause of concern for China. Militant attacks have killed several Chinese nationals in recent years, prompting Beijing to press Islamabad to ensure security measures for CPEC projects.

Diplomatic sources told VOA that China has lately directed its diplomats and citizens working on CPEC programs to strictly limit their movements and avoid visiting certain Pakistani cities for security reasons.

"They [Chinese] believe this security issue is becoming an impediment in taking CPEC forward," Senator Mushahid Hussain, the chairman of the defense committee of the upper house of the Pakistani parliament, told VOA in an interview earlier this month.

"Recurring expressions of concern about the safety and security of Chinese citizens and investors in Pakistan by top Chinese leaders indicate that Pakistan's promises of 'foolproof security' for Chinese working in Pakistan have yet to be fulfilled," said Hussain, who represents Prime Minister Shehbaz Sharif's ruling party in the Senate.