CPEC could help Pakistan become a regional economic hub

By: Azhar Azam

In a special ceremony to commemorate the 10th anniversary of the China-Pakistan Economic Corridor (CPEC), Chinese Vice Premier He Lifeng – as a special representative of China's President Xi Jinping – concluded his trip to Islamabad. During his visit, both countries signed six new documents to further "enhance cooperation" and strengthen the bilateral relationship.

The event, celebrated as the "Decade of CPEC," marked a new starting point to expand the project, to reinforce the "all-weather strategic cooperative partnership," foster economic and financial cooperation, advance high-quality development under the flagship project of the Belt and Road Initiative (BRI) and explore new areas of cooperation to deepen two-way trade and investment.

Indeed, CPEC has reached a milestone as it celebrates a decade of remarkable achievements such as supporting economic growth, infrastructure development and regional connectivity. The project is estimated to have garnered more than $25 billion of foreign direct investment from China for Pakistan to revamp the country's critical national infrastructure.

In addition to constructing 510 kilometers of highways and expanding the electricity transmission network by 886 kilometers, some 13 power generation projects with an installed capacity of 8,020 megawatts and six mega infrastructure projects have been completed, which include the Havelian-Thakot section of the Khyber Pakhtunkhwa-Karakoram Highway, the Multan-Sukkur (M-5) Motorway, the Hakla-D.I.Khan Motorway, Optical Fiber Cable, Eastbay Expressway and Orange Line Metro Train.

These projects have contributed to socio-economic development in the country by bridging the energy gap, ending years of blackouts caused by widespread power outages, upgrading road networks and creating roughly 200,000 jobs. "CPEC effectively helped Pakistan in improving the major transport networks from north to south and laid the foundation for a resilient infrastructure including ports, airports and roads and Orange Line Metro Train in Lahore," said Pakistan's minister for planning, development and reforms Ahsan Iqbal.

Xi, in his congratulatory message, reiterated that CPEC was an "important pioneering project" of the BRI and vowed to stand firmly with Pakistan irrespective of the changes in the international landscape. His strong support would bolster Pakistan's efforts to maximize the benefits of Beijing's $25 billion investment in power, road and electricity and transport sectors with new agreements in areas such as agriculture and information technology, helping Pakistan to increase its exports.

Through CPEC, Pakistan has been aspiring to transform itself into an important economic hub. The first phase – mainly focused on removing key economic bottlenecks such as energy and infrastructure including development of the Gwadar port and laying optic fiber – addressed very basic issues as well as improved connectivity and trade linkages, facilitating Pakistan's regional integration. The second phase is even more promising for it could accelerate the South Asian country's economic growth with high-quality development and establishment of special economic zones.

The BRI's flagship project is one great way to realize Pakistan's potential and ambition to become a leading regional economy. As efficient multimodal transport networks including roads, railways and ports are critical to boost trade by linking domestic and international markets, CPEC has effectively laid the foundation of Pakistan's sustainable development.

Over diverse economic and security challenges, Pakistan hasn't been able to spend much of its gross domestic product (GDP) on infrastructure over the last four decades, costing the economy by an estimate of 2 percent to 2.5 percent of the GDP. CPEC, by meeting the funding gap and lifting Pakistan's energy capacity, has helped Islamabad build its infrastructure, divert more electricity to its industry, and power national economic growth.

A joint analysis of several economic corridors by the Asian Development Bank, the United Kingdom's Department for International Development, the Japan International Cooperation Agency and the World Bank in 2018 found the Chinese investments under CPEC had enormous potential to boost Pakistan's economy, reduce poverty, spread benefits and help those who were likely to be affected by the new trade route. Five years later, the project continues to show its strength. Once Pakistan comes out of its economic crisis, it will play a crucial role in Islamabad's journey toward economic prosperity and readiness to contribute to Beijing's vision of shared progress.

*My article that first appeared at CGTN:

Joko Widodo's China visit will strengthen multifaceted relationship

By: Azhar Azam

Indonesia's President Joko Widodo has arrived in China to attend the opening ceremony of the 31st summer edition of the FISU World University Games, being held in Chengdu on July 28.

As two of the world's most populated countries and leading economies in the region, Beijing and Jakarta can greatly contribute to the global and regional economy. Joko Widodo has historically considered China "a close friend" of Indonesia, stressing on enhancing the comprehensive strategic partnership to complement each other by combining the Indonesian natural wealth with the Chinese knowledge and experience in the field of infrastructure.

He has been carrying out this mission more proactively of late. During a visit to Beijing in July last year, he and Chinese President Xi Jinping expressed their shared commitment to strengthening bilateral economic relationship, which would be equally beneficial to the region and world. In a joint statement, two leaders attached "great strategic significance" to their ties and promised to scale up trade and expand cooperation in other areas.

This concord to deepen the trade relations and Beijing's support for Jakarta's chairmanship of the Association of the Southeast Asian Nations (ASEAN) was an economic and political win for both countries as the two sides agreed to accelerate cooperation on milestone projects including the flagship Jakarta-Bandung High-Speed Railway and work on more strategic initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and industrial parks like "Two Countries, Twin Parks." Before the meeting, their officials also achieved a consensus to build a community of a shared future, vowing to safeguard regional stability.

During a meeting of President Xi and President Widodo last November on the sidelines of the G20 summit in Bali, the two sides signed five documents to strengthen collaboration under the Belt and Road Initiative (BRI), digital economy, healthcare, vocational training and economic and trade cooperation. The leaders also witnessed the operational tryout of the first high-speed railway in Indonesia and Southeast Asia.

The BRI, a project that Joko Widodo thinks naturally fits with his infrastructure program, is a great example of China-Indonesia cooperation. Beijing is Jakarta's largest trading partner and one of the top sources of foreign investment. The Chinese and Indonesian membership of the G20, engagement through ASEAN and Jakarta's participation in the Asian Infrastructure Investment Bank (AIIB) offer an opportunity to expand development cooperation and jointly speak up for peace at the regional and international levels.

Indonesia's ranking as an exporting country to China within ASEAN has over the years climbed from fifth in 2019 to third in 2021. Trade relations between the two countries are currently in a "very close condition" as represented by the trade data that showed total bilateral trade in 2022 had exceeded $149 billion, an increase of about 20 percent year-over-year.

Joko Widodo's commitment to improve port connectivity under the Global Maritime Fulcrum (GMF) and develop infrastructure aligns well with the BRI's emphasis on shared development and economic cooperation. "Two Countries, Twin Parks" is one of the key Indonesian priority projects under the BRI-GMF synergy, which will encourage trade and investment and intensify cooperation in the industrial sector between the two countries.

China, with investments estimated at $8.2 billion and several dozen BRI projects including the Jakarta-Bandung High-Speed Train – which is gearing up for operation after last month conducting a trial test and reaching a speed of 350 kilometers per hour, marking the foundation of the Indonesian transportation technology – is slated to implement the Indonesian president's vision. The Chinese projects would further advance President Widodo's initiative of National Strategic Projects that seek to contribute to job creation and national economic growth across the island country.

The Indonesia Morowali Industrial Park (IMIP), one of the country's National Strategic Projects, is another perfect model of the Beijing-Jakarta industrial cooperation. Out of an estimated 43,000 directly and 30,000 indirectly employed workers as of February 2020, only 5,000 were Chinese. This enunciates the Indonesian labor cohort in the Chinese project is substantial, symbolizing a "strong synergy" between China's investments and President Widodo's development plans.

China didn't press Indonesia or other countries to make purchases in exchange for investments and infrastructure development. Nor does Beijing see Jakarta as an arena of a geopolitical battleground. The East Asian country's engagement with the island nation focuses to help boost the Indonesian trade, infrastructure and economic capabilities rather than forging alliances to contain others. "They never, ever dictate," said the Indonesian Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan in an interview last November expounding his country's warmth toward China.

Both as the major developing countries and leading partners in preserving peace and stability in the region, China and Indonesia can promote the common interests of the developing and emerging world, leverage their resources and economic prowess to drive each other's and the regional development under their respective frameworks as well as safeguard the security of Asia-Pacific.

My article that first appeared at CGTN:

An alliance of west-neglected economies is taking shape

By: Azhar Azam

In 2018, the UN Secretary-General António Guterres applauded the role of the Shanghai Cooperation Organization for its leading role in regional diplomacy and contribution to develop multilateral cooperation to address the pressing peace and security issues. He called the Eurasian bloc an important partner in combating terrorism, violent extremism and drug trafficking.

Home to about half of the world population and 60% of the geographical expanse from the Baltics to the Pacific, ; the word “cooperation” right in the middle of the SCO was also the buzzword in the joint statement issued by the Council of Heads of State at the conclusion of the 23rd annual summit, held virtually in India.

At the annual gathering, leaders from China, Russia, Pakistan, India and four Central Asian countries – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan stressed on boosting cooperation and pursuing a policy that excludes "bloc, ideology and confrontational approaches" to address development as well as traditional and non-traditional security challenges.

In a sharp contrast to other inherently “like-minded” alliances of threatening appearance such as NATO, G7, the Quad and the AUKUS – the SCO is a heterogeneous collection of mostly less-powerful countries with conflicting interests; the world needs these sorts of arrangements to exchange communication relating to the economic and security issues among the traditional rival countries rather than pursuing all-is-well approach.

For instance during the online meeting, the Pakistani and Indian prime ministers sparred over minority persecution and support of cross-border terrorism. Similarly, New Delhi accused Beijing’s Belt and Road Initiative (BRI) of infringing its territorial integrity as rest of the member states reaffirmed their support for the project. It may be portrayed negatively to downplay the SCO importance but actually, this rhetoric triggers a flurry of conversation among the intellectuals of the member states on issues that really matter to regional security and prosperity.

For instance, in a recent webinar on the SCO summit 2023, academics and experts from China, Pakistan, India, Tajikistan, Uzbekistan, Kazakhstan and Russia shared their countries’ contributions in various areas and underscored the importance of promoting the “Shanghai Spirit” for its ability to address urgent issues such as climate change, extremism and technological advancement, strengthen regional security and foster economic prosperity.

With Iran’s accession to the SCO as a full member and Belarus signing the memorandum of obligations at the summit as well as Bahrain’s gaining the status of dialogue partner – it’s increasingly transforming into a consortium of developing and emerging states that has expanded across Asia, is knocking the European doors and could soon tempt African and Latin American and the Caribbean countries.

Already the platform is threatening to show its muscle in the developing and emerging world. As of 2022, Iran, Belarus, Afghanistan and Mongolia were observer states; Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey, an important NATO member state whose President Recep Tayyip Erdogan attended last year’s SCO head of states' summit in Samarkand, held the status of dialogue partners.

Kuwait, the Maldives, Myanmar and the United Arab Emirates in May signed the memorandums and gained the status of the SCO dialogue partners. The Emirati Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan expressed his delight of being welcomed in an organization “whose global influence and importance only continue to grow.” Earlier in March, Saudi Arabia’s cabinet headed by King Salman bin Abdul Aziz approved the Kingdom’s decision to join the SCO as a dialogue partner.

This as well as almost a dozen of countries including Egypt, Ukraine and Vietnam, all of which have applied for observer or dialogue status, exhibits the inclusiveness and scope of the SCO as a strong political, economic and security alliance to play an effective and inspiring role in bringing stability to the world economy and security through international cooperation.

The SCO also focuses on cooperation with regional and international organizations. The institution’s legal framework of foreign relations emphasizes cooperation with the Commonwealth of Independent States, the Association of Southeast Asian Nations, the Collective Security Treaty Organization, the Economic Cooperation Organization, the Conference on Interaction and Confidence-Building Measures in Asia and the International Committee of the Red Cross.

Both the SCO and the United Nations (UN) have established partnerships in educational, scientific and cultural, tourism, migration, drugs and crime, social and economic for Asia-Pacific and counter-terrorism cooperation. The SCO has been an observer in the UN General Assembly since 2005; the Department of Political and Peacebuilding Affairs and the Center for Preventive Diplomacy for Central Asia maintain regular contacts with the SCO officials. The heads of all these institutions have been also invited for this year’s virtual summit in India.

Over the years, the organization has widened its focus to development, building a democratic structure of international relations and preventing global trade from unilateral protectionist measures. The SCO significance as the world’s largest and most populous regional cooperation institution with the Heads of State forming the highest decision-making body repulses its characterization as a server of a single country’s interests and an anti-western grouping.

The stated SCO goals – strengthening mutual confidence and good neighborly relations, effective cooperation in politics, trade, climate change, economy, science and technology, culture, education, energy, transportation and tourism; jointly maintaining peace and security; and creating a new, democratic and just political and economic international order – further underline the SCO is common forum to accelerate cooperation and promote regional growth and prosperity.

A growing interest of the countries to join the successor of the Shanghai Five is indicative of the SCO triumph as a cooperative and inclusive organization. While the trend signals a shift in economic gravity from west to east in the foreseeable future, it suggests countries around the world are keen to align themselves with alliances that prioritize cooperation and take into account their development challenges rather than the ones, which push them into conflicts or making choices.

*My article that first appeared in the Express Tribune: