CAREC: More Landlocked States Look to Pakistan's Gwadar Port
By Riaz Haq
CA
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 the Central Asia region through Western China.
Quadrilateral Traffic in Transit Agreement (QTTA)
The Quadrilateral Traffic in Transit Agreement (QTTA) is a transit trade deal between China, Pakistan, Kyrgyzstan and Kazakhstan for facilitating transit traffic and trade.
In addition to being members of QTTA, China, Pakistan, Kyrgyzstan and Kazakhstan are also part of CAREC, the Central Asian Regional Economic Cooperation. Other CAREC member nations include Afghanistan, Azerbaijan, Georgia, Mongolia, Tajikistan, Turkmenistan and Uzbekistan.
China-Pakistan Economic Corridor (CPEC) infrastructure projects have strengthened Pakistan's connectivity with the landlocked Central Asia region in recent years.
CAREC Ministerial Meeting Islamabad, Pakistan
CAREC or SAARC
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 has adopted a belligerent tone characterized by his boasts of "chhappan inch ki chhati" (56 inch chest) and talk of "munh tor jawab" (jaw-breaking response) and "boli nahin goli" (bullets, not talks) to intimidate Pakistan in the last few years. All of Modi's actions, including his order to bomb Balakot in Pakistan in February 2019, have signaled his outright aggression against Pakistan. His government's actions in Kashmir have extinguished any hope of normal relations between South Asia's two largest economies in the foreseeable future. These have essentially forced Pakistan to choose between SAARC and CAREC.
CAREC Corridors
The 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 CAREC governments contributed $6.9 billion. 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 have access to the Pakistani seaports in Gwadar and Karachi as part of the new maritime silk route (MSR) envisioned by China and Pakistan.
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. 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 the Central Asia region through Western China.
(Riaz Haq is a Silicon Valley-based Pakistani-American analyst and writer. He blogs at www.riazhaq.com)
