Pakistan's Choice: 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


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Comment by Riaz Haq on March 20, 2017 at 7:39am

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-P... …

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.

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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 

Comment by Riaz Haq on June 9, 2017 at 7:04am

#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.

Comment by Riaz Haq on December 30, 2017 at 10:25am

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.

Comment by Riaz Haq on December 30, 2017 at 10:31am

INDIA AND THE UNITED STATES SHOULD REVISIT THEIR OPPOSITION TO CHINA-LED CONNECTIVITY
ARIF RAFIQ


https://warontherocks.com/2017/12/india-united-states-need-rethink-...


But neither Belt and Road nor CPEC is a strategic ploy masquerading as investments, as some allege. CPEC specifically has a real and powerful economic logic for Pakistan, China, and even India. The corridor does offer China some indirect strategic benefits — it consolidates Beijing’s alliance with Islamabad and reduces its dependence on the Malacca chokepoint. But CPEC is ultimately about economics. It not only raises the potential for cross-border Sino-Pak trade, it also enhances Pakistan’s ability to trade with the outside world beyond China. Most of the nodes that constitute the project’s road network bolster Pakistan’s domestic connectivity and with the outside world.

In fact, the aforementioned Karachi-Lahore Motorway resembles India’s own planned Delhi-Mumbai Industrial Corridor and runs parallel to it. Much like the Indian highway, the Karachi-Lahore Motorway cuts transport time between Pakistan’s two largest cities. There are also planned industrial zones along the route. And the Karachi-Lahore Motorway will be complemented by upgrades to Pakistan’s main rail line.

Not only do the two highways run parallel to one another, CPEC can potentially fill the gaps in between. For example, with the completion of the Karachi-Lahore Motorway in 2020, Karachi could be the fastest route to sea by road for traders in Amritsar in India’s Punjab state. Additionally, with the completion of the Karakoram Highway realignment, traders in northwestern India may also be able to access western China’s markets more readily through Pakistan, potentially reducing the trade deficit with China that India routinely complains about. While India often thinks of Pakistan as an overland trade route to Afghanistan, there is also potential for India-China transit trade through Pakistan.

Indian commentators, such as Singh, also describe the Gwadar port as a strategic project that is not economically viable. But in fact, that is a more accurate description of India’s Chabahar port project. Gwadar may be able to absorb some of China’s transshipment with the Persian Gulf and East Africa and host industries like mineral processing and petrochemicals. Meanwhile, Chabahar is oriented around Afghanistan, a narco-state whose documented economy has grown at an annual average 1.65% over the past four years, according to the World Bank. India has used Chabahar to send food aid to Afghanistan to bypass the Pakistan transit route and replace Pakistan as Afghanistan’s primary source of imported wheat. But the fact that Indian wheat had to be sent to Afghanistan fully subsidized indicates that the prospects for Chabahar-based Afghanistan trade are dim.

Comment by Riaz Haq on June 10, 2018 at 8:03am

How Pakistan joined the SCO
By Sabena Siddiqui
June 10, 2018

http://www.china.org.cn/opinion/2018-06/10/content_51829236.htm

It was at the sixth summit meeting of the Shanghai Cooperation Organization in 2006, that Pakistan's President Musharraf addressed the congregation and expressed his wish that Pakistan become a full member of the SCO. Going on to highlight the geo-strategic location and geo-economic advantages of his country, he said his country was most suitably positioned to contribute to the existing objectives of the SCO. 

Underscoring Pakistan's credentials as a future energy and trade corridor for the members of the SCO, he said, "Pakistan provides a natural link between the SCO states to connect the Eurasian heartland with the Arabian Sea and South Asia. We offer the critical overland routes and connectivity for mutually beneficial trade and energy transactions intra-regionally and inter-regionally."

Based on geographical contiguity, the countries under the SCO umbrella have increased their standing in Asia's security dynamics, stabilized their respective parts of the world and made great advances in counter-terrorism, defense and energy cooperation. Notably, the two founding members, China and Russia, were also permanent members of the United Nations Security Council while the four Central Asian members -- Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan -- had the world's largest energy resources. 

Consequently, Pakistan wanted to become part of the SCO and realize its true geopolitical and geo-economic potential as described by Musharraf. Having had observer status at that time, Pakistan also felt comfortable because of its time-tested and deep-rooted ties with China. Mainly, there were four advantages for Pakistan in joining the SCO.

Firstly, as Musharraf had described, Pakistan could be an ideal trade corridor for the SCO member countries as well as being able to further consolidate its ties with China. Years later, this concept has materialized in the China-Pakistan Economic Corridor (CPEC) which is now the "flagship corridor" of the Belt and Road Initiative. 

Alongside, having attained full membership of the SCO, Pakistan has elevated the synchronicity of China-Pakistan strategic relations to another level while it also plays an important role as a key BRI country. Additionally, as the BRI is linked with specific development plans of other SCO member states as well, Pakistan has relevance in both organizations and benefits from both platforms in tandem. 

Secondly, being an SCO member provides Pakistan the opportunity to increase its trade volume and establish economic ties with the other members. In particular, access to the Central Asian countries can fulfil its energy requirements with gas pipeline projects like TAPI and IPI. Since the SCO includes large energy producers like Russia, Kazakhstan, Uzbekistan and even Iran, once it gets full membership, it is an ideal opportunity for Pakistan to sort out its energy issues and make solid arrangements for energy supplies. 

Providing a natural trade route for SCO members to access the Arabian Sea, Pakistan is also part of the Central Asia Regional Economic Cooperation (CAREC). Linking its Gwadar and Karachi ports via CPEC for trade with the Central Asian members of the SCO, Pakistan can prove to be the ideal bridge for Eurasia. 

Thirdly, the SCO platform provides an ideal opportunity for South Asian neighbors, Pakistan and India, to improve their bilateral relations. Especially as the second most important article in the SCO Charter is the Treaty on Long-Term Good-Neighborliness, Friendship and Cooperation, as observed by Chinese Assistant Foreign Minister Kong Xuanyou, "In the charter of the SCO there is a clause that the hostility between the bilateral relations should not be brought to the organization. I believe both the countries will abide by the charter of the organization."

Comment by Riaz Haq on May 30, 2019 at 7:44am

#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-... 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.

Comment by Riaz Haq on December 18, 2019 at 5:19pm

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...

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.

Comment by Riaz Haq on May 9, 2020 at 7:14pm

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

Comment by Riaz Haq on May 9, 2020 at 7:54pm

Carec to enhance Pakistan’s exports to China: ADB

https://www.thenews.com.pk/print/365294-carec-to-enhance-pakistan-s...

Asian Development Bank (ADB) sees opportunities for Pakistan in Carec program to expand and diversify its exports to China and central Asian states, underscoring a need for increasing ownership of the projects for regional connectivity and economic cooperation.

ADB Director Regional Cooperation and Operation Coordination Safdar Pervez said there has to be greater awareness in Pakistan about the potential benefits of expanding relations and trade with other countries of Carec – a program launched two decades back by the Manila-based lender to encourage economic cooperation among 11 member countries.

“We feel there is a lot of recognition and ownership already there,” Pervez said, speaking at Sustainable Development Policy Institute.

“But, there is always some room to build on that.”

Pakistan joined Carec in 2010 and since then the program has invested about $1.5 billion on projects largely related to building trade and transport connectivity.

“We have a pipeline of next three years under which we plan to support Pakistan with another $1.7 billion,” Pervez added.

Other Carec members include Afghanistan, Azerbaijan, China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan.

Pervez said Pakistan today has very high trade deficit and one way to get out of this large trade deficit is to find ways of expanding and diversifying exports.

Carec envisages corridor development connecting Pakistan, China and Central Asian states to European markets.

“We see that with the Carec block as a whole Pakistan’s exports have been declining,” Pervez said. “We estimate that over the last five years there has been about 37 percent decline in Pakistan’s exports to these countries, although the potential is large.”

In addition to infrastructure development, ADB is also trying to focus on soft components, which are to do with trade facilitation, such as improving rules and regulations for trade, trying to harmonise customs procedures and systems, promoting concept of single window so that the cost of traction of trade actually declines.

“These are the areas where we feel that Carec program is among the most relevant programs for Pakistan,” the ADB official said. “We are trying to explore opportunities to get Pakistan closer to other Carec member countries on issues such as economic corridor development, tourism, education and other areas.”

The ADB official said the focus on economic cooperation can be a very strong foundation to “build greater peace and greater security”.

He said Pakistan’s ranking on global cross-border trade indicators needs to be improved substantially.

“If you look at the World Bank’s doing business survey, again Pakistan’s performance can substantially be enhanced and improved.”

Pervez said the country needs to improve in the area of non-tariff barriers, such as phytosanitary standards.

“The non-tariff barriers are becoming much more important. They are bigger obstacles to Pakistani exports today,” he added. “Tariffs across the world are coming down. Pakistan still has relatively higher tariffs and there is room for improvement.”

The ADB official said the country can become a much more attractive destination for trade, exports and foreign direct investments if it is able to deal with infrastructure bottlenecks, simplify customs procedures, cut down red-tap and create more enabling environment for private sector. Carec has six corridors and two of the six corridors that go through Pakistan are actually also on the China-Pakistan Economic Corridor (CPEC) route.

“So there is already a strong alignment already in terms of corridor development,” ADB official said. “There is big need for regional initiatives such as CPEC and Carec to coordinate with each other so that synergies can be built…. any potential duplication can be avoided.”

Comment by Riaz Haq on May 9, 2020 at 7:55pm

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-...

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.

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