Comment by Riaz Haq on October 20, 2021 at 8:27pm

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...

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.

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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.

Comment by Riaz Haq on October 27, 2022 at 10:30am

Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-...


“Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic,” an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.


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Pakistan and China aim to revive Belt and Road projects in the South Asian country at an annual huddle, scheduled to take place virtually on Thursday. In the run-up to the talks, cash-strapped Islamabad appears to have accepted a Chinese demand to increase the cost of a railway, as it seeks to secure more financing.

This will be the 11th meeting of the Joint Cooperation Committee, the key forum for making decisions on the China-Pakistan Economic Corridor (CPEC), a $50 billion Pakistan component of the Belt and Road. Zhao Shiren, the Chinese consul general in Lahore, told local media earlier this month that work on the CPEC is expected to speed up after the JCC meeting.

The center of attention now is Main Line 1, or ML-1, a project that will upgrade 1,733 kilometers of railway track between Karachi and Peshawar. This is the largest CPEC project in terms of cost, and it has been awaiting a final decision for the past five years.

"Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic," an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.

In multiple background interviews, sources said other projects expected to get the nod include the Karachi Circular Railway at a cost of $1.33 billion and the Karakoram Highway realignment, valued at $1.8 billion.

Apart from these plans, another major issue up for discussion will be power projects. Beijing has built 12 power plants under the CPEC and Pakistan owes more than 250 billion rupees ($1.14 billion) in unpaid bills to the facilities. The JCC huddle is expected to deliberate on forming a revolving account for Chinese power producers so that they can get paid without getting entangled in Pakistan's web of debt.

Moreover, the JCC meeting might decide the fate of a 300-megawatt power plant in Gwadar -- a port intended to be a key Belt and Road hub. The Pakistani government would prefer to scrap the project as it scrambles to save money, whereas China seeks approval to start building it.

Aslam Bhootani, a member of the national assembly representing Gwadar, is not happy about the outlook. "No investment will come in Gwadar" unless the area's power problems are resolved, he said. "Scrapping the 300 MW power plant will not help in this situation."

Experts are on the fence about the prospects for rejuvenating the CPEC.

Michael Kugelman, director of the South Asia Institute at the Wilson Center, said the CPEC is in a holding pattern, with no new projects and existing projects moving very slowly out of caution over Pakistan's economic crisis, with its foreign reserves falling dangerously low.

"Given Pakistan's severe economic stress, as well as China's own recent slowdown," he said, "there will be little space for any type of new economic activity."

But the Pakistani government does have an incentive to stay in China's good books. Next week, soon after the JCC, Prime Minister Shehbaz Sharif is scheduled to visit China. This will be his first visit to Beijing as leader.

Comment by Riaz Haq on October 27, 2022 at 10:31am

Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-...


According to media reports, Sharif will likely seek $10 billion in financial assistance from China, through balance of payment support and rolling over Chinese loans, which make up 30% of Pakistan's total external debt. Experts believe the Sharif government wants the JCC to be successful so that it can secure the required financial support from China during the prime minister's visit.

Despite his skepticism and the CPEC's sputtering progress, Kugelman also suggested Sharif might be the man to restore some momentum. "It was Prime Minister Sharif's brother [Nawaz Sharif] who launched the CPEC, and there's reason to believe Beijing is more comfortable working with the ruling PML-N party than with Imran Khan's PTI, which asked questions about transparency [of CPEC projects] that China didn't like," Kugelman told Nikkei.

While Sharif is planning to revive the CPEC, his political nemesis Khan is in full-throttle mode to topple his government. Even after suffering a setback last week with his disqualification from office over alleged mishandling of foreign gifts, Khan has announced a long march from Lahore to Islamabad starting Friday, demanding Sharif's resignation and fresh elections. Initially, it appeared Khan might be barred from politics for years but for now he has only been stripped of his seat in parliament.

Government officials fear the political uncertainty could jeopardize any gains made at the JCC meeting.

The instability is a problem, said James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. But he said Beijing has already factored it in when making decisions about CPEC projects.

"Beijing knows that the ML-1 project is also in the interest of Pakistan and even if Khan again formed the government, he cannot reverse it," Dorsey said.

He added that the Belt and Road, in general, has been slowing down, and that efforts made to revive the CPEC are partly Beijing's attempt to fire up its broader global infrastructure drive.

Comment by Riaz Haq on November 2, 2022 at 10:24am

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-a...

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.

Comment by Riaz Haq on December 26, 2022 at 9:58am

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


https://www.dawn.com/news/1728370/pakistan-uzbekistan-sign-mous-to-...


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.

Comment by Riaz Haq on April 27, 2023 at 8:24am

#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakis...

Belt and Road Initiative’s most expensive transport infrastructure project ‘has potential’ to reshape trade and geopolitics
The rail link is part of a broader plan to revive ancient Silk Road connections and reduce reliance on Western-dominated routes

The China-Pakistan railway – China’s largest Belt and Road Initiative transport project – will cost an estimated 400 billion yuan (US$57.7 billion), but should proceed because of its strategic significance, a government-commissioned feasibility study has found.
The proposed railway, connecting Pakistan’s port of Gwadar to Kashgar in China’s Xinjiang Uygur autonomous region, was assessed by scientists from the state-owned China Railway First Survey and Design Institute Group Co Ltd.
The team, led by the institute’s deputy director of capital operations Zhang Ling, said the project was the belt and road plan’s most expensive transport infrastructure.
Despite the cost, the project had the potential to reshape trade and geopolitics across the Eurasian continent and should be supported, the team said in a report published by the Chinese-language journal Railway Transport and Economy in April.
“The government and financial institutions [in China] should provide strong support, increase coordination and collaboration among relevant domestic departments, strive for the injection of support funds and provide strong policy support and guarantees for the construction of this project,” they said.
The institute is one of the largest of its kind in China and has been involved in many major railway projects at home and internationally, including Indonesia’s Jakarta-Bandung high-speed rail line.
The 3,000km (1,860-mile) railway will link China’s western regions with the Arabian Sea, bypassing the Strait of Malacca and reducing dependence on the South China Sea.
Connections with other transport networks – including in Iran and Turkey – would also provide a more direct route to Europe for Chinese goods, while Pakistan is forecast to get a much-needed boost from the improved infrastructure and easier trade with China.
The scheme is a key component of Beijing’s broader belt and road plan to promote economic cooperation and connectivity among the countries along the ancient Silk Road trade routes.
Previous studies by Chinese government researchers have suggested the infrastructure initiative could have significant geopolitical implications, helping to shift the balance of power away from traditional Western-dominated trade routes.
As well as encouraging a more multipolar world order, the belt and road plan could also help to promote economic development and stability in countries along the route by creating jobs, boosting infrastructure investment and increasing trade, the studies said.
Most belt and road transport infrastructure construction projects had received a significant proportion of funding from the host countries, and the scale of investment was much smaller, Zhang and his colleagues noted.
For example, total investment in Kenya’s Mombasa-Nairobi standard gauge railway was US$3.8 billion, with China providing 5 per cent of the funding and Kenya paying for the rest.

Comment by Riaz Haq on April 27, 2023 at 8:24am

#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakis...


The project connects the port city to the Kenyan capital and is part of a larger plan to link East African countries by rail. Similarly, China contributed 30 per cent of the US$4 billion funding for the Addis Ababa-Djibouti rail line in Ethiopia.
China covered 75 per cent of the Jakarta-Bandung high-speed railway’s costs of US$5.9 billion, with Indonesian state-owned enterprises providing the remainder.
But Pakistan is unable to make a similar contribution. Its GDP last year was US$370 billion – just six times the estimated cost of the project.
“Due to energy shortages, poor investment environment and fiscal deficits,


Pakistan’s economic growth rate has come under pressure,” the team said.
“In terms of railway investment and construction, Pakistan is unable to provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction.”

One reason for the hefty cost is the mountainous and geologically complex terrain along the route. There could be technical challenges to overcome in the construction and operation of the railway, the researchers said.
The project also required supporting infrastructure – such as ports and logistics facilities – that might not be immediately available in Pakistan, they said.

The study said Pakistan’s labour policies could be unpredictable, which could potentially affect the railway’s construction and operating costs.
The team also noted that Pakistan had experienced security challenges in recent years, including in its western region where the railway will pass through. Balochistan province, for instance, has been plagued by separatist violence for decades.

This could potentially disrupt construction and operation of the railway and pose a risk to Chinese workers and investments, the researchers said.
The study also pointed out the railway’s potential impact on neighbouring countries, such as India. With each country having its own priorities and interests, there could be disagreements or delays in decision-making related to the project, it said.
Zhang’s team suggested that a build and transfer (BT) model would provide the best investment and financing strategy for the project.
They considered BT against build-operate-transfer, public-private partnerships, and the engineering, procurement, construction mode that are becoming more popular in belt and road projects.


In the BT model, a contractor would be responsible for designing, building and financing the railway, with payment on completion and ownership transferred to the government or other commissioning entity.
The researchers said BT would allow the risks associated with the railway’s construction and operation to be allocated more effectively between China and Pakistan, potentially reducing the financial risks for both parties.
By ensuring that ownership of the railway was transferred to Pakistan, BT could also help to build trust between China and Pakistan by showing China’s commitment to supporting Pakistan’s long-term economic development, they said.
China and Pakistan have been talking for years about the railway, a crucial part of the China-Pakistan Economic Corridor (CPEC) that was launched in 2015 and aims to connect Gwadar port to Xinjiang through a network of roads, railways and pipelines.
The researchers said the China-Pakistan relationship was complex, with both countries having different priorities and interests.
Negotiating agreements related to financing, labour policies, and other issues would require careful consideration of each country’s priorities and interests, they said.
In conclusion, Zhang and his team said their recommendation could help to move negotiations forward.

Comment by Riaz Haq on September 7, 2023 at 9:24am

EIU (Economic Intelligence Unit)report

China Going Global Investment Index 2023
This year’s edition of the China Going Global Investment Index ranks 80 economies across nearly 200 indicators to identify opportunities and risk for Chinese firms and investors looking to expand globally.

A decade since Xi Jinping’s Belt and Road Initiative (BRI) launched in 2013, Chinese firms have become formidable investors globally, and the flow of overseas investment is set to increase over the next decade.

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