Pakistan Army's Strong Commitment to CPEC Success

[Riaz Haq]

In July 2016, British newspaper Financial Times report headlined "China urges Pakistan to give army lead role in Silk Road project (CPEC):  Squabbles in Islamabad highlight obstacles to Beijing’s plans for transport and energy corridor" said as follows:

"Frustrated with the slow progress on a sprawling, $46bn infrastructure project stretching from China to south Asia, Beijing is seeking to give Pakistan’s army a lead role.... progress has stalled as the two sides work out how to turn the proposals into concrete projects, said Victor Gao, a former Chinese foreign ministry official, with some blaming Pakistan’s competing ministries"..... “Pakistani politicians have squabbled over the route for the CPEC and this may have made people nervous in Beijing,” said a Pakistan government official. “Pakistan is a noisy place politically while the Chinese are not used to harsh disagreements, especially over such a vital project.”

Chinese Container Ship "Cosco Wellington" at Gwadar Port

Gwadar Port Operational:

In the first week of November 2016, hundreds of containers arrived at Pakistan's Gwadar Port from Western China via CPEC's western land route. These containers were loaded onto "Cosco Wellington", a large Chinese vessel, and the ship departed Gwadar Port on November 13, 2016, for various destinations in Africa, Middle East and Europe.

Prime Minister Nawaz Sharif and General Raheel Sharif at Gwadar Port on Nov 13, 2016

So what is happening behind the scenes? Is the Pakistani military playing a big role in making CPEC a reality? What is the extent of Pakistan Army's participation in executing CPEC-related projects? Let's examine answers to these questions in three parts: Managing squabbling civilians, providing security and projects execution.

Squabbling Civilians:

Pakistan Army Chief General Raheel Sharif is playing a very active behind-the-scenes role in managing the infighting among politicians, ministers and the civil servants. It has been reported that Gen Sharif has been talking to all of the stakeholders regularly to ensure progress on China-Pakistan Economic Corridor projects.

Providing Security:

Various militant groups, including Indian government proxies, are engaged in sabotaging CPEC. While some attacks have been successful, it is believed that the Pakistani military has been able to prevent many more. Thousands of soldiers and hundreds of intelligence officers are believed to be working to manage the security situation all along the western route and in Gwadar.  This is what made the recent pilot run with the trucks convoy reaching Gwadar and operationalizing the port recently.

Projects Execution:

The Pakistan military has thousands of civil, mechanical and electrical engineers with decades of experience in building large infrastructure projects and analysts say the army is well placed to supervise the corridor, according to the Financial Times.

In fact, Pakistan Army's Frontier Works Organization (FWO) is building significant parts of the China-Pakistan Economic Corridor (CPEC). A July 2015 announcement is an illustration of what Frontier Works Organization is doing to advance CPEC:

“The Frontier Works Organization (FWO) has built roads with 502 kilometers length on the western alignment of China Pakistan Economic Corridor (CPEC) to link Gwadar with other parts of the country. The FWO took up the challenge to extend the benefits of Gwadar port to rest of the country by building roads in rugged mountainous terrain and highly inaccessible areas. The gigantic task was undertaken on the directives of Chief of Army Staff General Raheel Sharif."

Army's Strong Commitment:

Army Chief General Raheel Sharif has made his institution's commitment loud and clear by frequent statements on the subject. He has said “We will do everything to make it a success". He is also record as warning that “terrorism is a global issue and warrants global response. The funding of all terrorist organizations has to be checked by all. We are against use of proxies and won’t allow it on our soil".

Summary:

Pakistan Army is playing a crucial role in ensuring progress and completion of China Pakistan Economic Corridor (CPEC) related projects. The army leadership is using all its power and influence with all stakeholders, including politicians and civil servants, as part of this campaign to bring about development of infrastructure and energy to make Pakistan economically successful.

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Saleem Safi of GeoTV on Gwadar

Pakistan FDI Soaring with Chinese Money for CPEC

[Riaz Haq]

Gwadar was originally built during Musharraf years, inaugurated in 2007 and occasionally used for ships carrying imported fertilizer to Pakistan. 

http://www.dawn.com/news/238494

However, this is the first time Gawadar received cargo containers from China via CPEC western route that were loaded on to a Chinese container ship for export. 

https://www.thenews.com.pk/latest/164359-Trade-caravan-China-reache... 

[Riaz Haq]

#FATA Development Top Priority: #Pakistan COAS Opens #Bannu-#Miranshah-GhulamKhan Rd. #Afghanistan- https://goo.gl/upx4J4 via @PKKHTweet

General Raheel Sharif, Chief of Army Staff on Sunday inaugurated an important section of upcoming Central Trade Corridor (CTC) alongwith the largest bridge on this road in South Waziristan Agency. CTC is a strategic road link to facilitate trade not only between Pakistan and Afghanistan but it will also directly and indirectly help revive local economy of FATA and KP. An international standard, 705 KM long road network through southern KP & FATA, CTC is being built by Army Engineers and funded by friendly countries.

The 76 KM long Shakai – Makeen road funded through USAID is an important lateral along the CTC which connects the two main axes of Trade Corridor i.e., Road Bannu – Miranshah – Ghulam Khan and Road Wana – Aangor Ada. Apart from other economic, security and strategic advantages, the newly constructed roads have reduced travelling times considerably.

The COAS said, development of FATA is a priority task being undertaken by the Army as a well considered strategy. Pakistan Army has undertaken 178 x projects so far in social sector take communication infrastructure and power sector in FATA and Malakand areas. These projects are aimed to improve the quality of life in tribal areas and address the problem of militancy on long term basis.

While addressing the tribal elders, COAS appreciated their support in combating terrorism and acknowledged their sacrifices in war against terrorism. He reiterated Army’s resolve to bring peace and stability to the affected areas.

Referring to operation Zarb-e-azb the Gen. Raheel Sharif said that the operation is progressing successfully as per plan. He said while focusing on early completion, the army will continue with rehabilitation and reconstruction activities. A comprehensive plan in this regard has been chalked out in consultation with the government.

[Riaz Haq]

#Pakistan targets 6% GDP growth by 2018 https://www.thenews.com.pk/print/165362-Pakistan-eyes-6-percent-gro... …

Haroon Akhtar, special assistant to the Prime Minister on revenue said on Wednesday the country, beset by low tax-to-GDP ratio, is expected to achieve growth rate of six percent before the next elections, due to introduction of pro-business policies.

“The business-friendly policies of the government have resulted in rapid economic development and the country will achieve growth rate of six percent by the elections (due 2018),” Akhtar told business leaders at the newly-constructed building of the Federation of Pakistan Chambers of Commerce and Industry in Islamabad. 

“Low tax-to-GDP ratio is hampering development for which we are trying best, while enhanced transparency has been ensured in the FBR (Federal Board of Revenue).” 

During the recent years, the country has seen its growth accelerate on support of a three-year bailout program by the International Monetary Fund. Still the government is struggling to increase narrow tax base, shrinking exports and key foreign direct investments.

The FBR collected Rs3,112 billion in taxes for the fiscal year ending June 30, 2016, registering a 20 percent increase over the previous fiscal.

Yet, the country’s tax-to-GDP ratio has stagnated at 10 percent over the last few years. A study said only tax evasion shears five percent from the tax-to-GDP ratio.

The government eyed growth rates at 5.7 percent for the current fiscal year of 2016/17 and seven percent for 2017/18. 

Pakistan’s economy achieved growth rate of 4.7 percent in 2015/16, the highest in the past eight years.

The World Bank, however, projected the country’s growth rate at 5.4 percent by 2018. Akhtar said a lot of incidents of tax evasion are being reported, “but, we opt for legal actions in a very few cases.” 

“Those who pay tax after detection face no action at all,” he added. “US is a super power because of a good tax system, while Europe is considered developed due to good taxation, therefore Pakistani business community should also discharge obligation so that Pakistan can develop at a fast pace.” 

He said a number of sectors, including fertiliser, have been given tax breaks, which has resulted in good growth. “Lenders like Asian Development Bank is ready to provide loan on less than two percent, which indicates its confidence on Pakistan’s policies,” he said.

The PM’s assistant said the government has not transferred burden of improved oil prices to the masses. He said those who say that foreign debt would swell to $110 billion have overlooked certain facts. “GDP, investment and exports will also take a boost,” he added. “Debt-to-GDP ratio in Pakistan is at a comfortable level of 20 percent, while average interest payable on debt is three percent, which is not worrying.”

[Riaz Haq]

#CPEC: Will #India Start War With #Pakistan And #China Over It? http://www.valuewalk.com/2016/11/cpec-india-vs-pakistan-china/ … via @ValueWalk


By Polina Tikhonova 

With China and Pakistan actively working on the CPEC, the uptick of irresponsible propaganda pieces coming from politicians and analysts – originating mostly from India – shows no sign of going away.

Such an opinion was expressed by Panos Mourdoukoutas, a contributor for Forbes. Mourdoukoutas argues that China has to either appease India or “forget” about the CPEC project.

A number of Indian government officials have expressed their concerns over the CPEC since the project was announced over three years ago. And while India, as alleged by Pakistan, has made numerous attempts to disrupt the project, the chances that India might actually start a war with China and Pakistan over the project remain equal to zero.

In fact, former Indian Ambassador Melkulangara Bhadrakumar said India would “lose heavily” if it remained opposed and isolated from the CPEC.

However, numerous Indian government officials believe the CPEC is designed to undermine India’s position in the region and see the project as a threat to India’s interests.

While that creates tensions between China and Pakistan on one side, and India on the other, authors of anti-CPEC propaganda pieces seem unable to provide at least one legitimate reason as to why India would go to war with China and Pakistan over the project.

China would protect the CPEC at all costs as the project is worth a whopping $46 billion and is a game-changer for both China and Pakistan. Disrupting the project would mean a direct declaration of war to China and Pakistan. And India knows it.

This past summer, the China Institutes of Contemporary International Relations suggested that Beijing will have “to get involved” if New Delhi attempts to disrupt the project.

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In his piece arguing that China is lagging behind India in terms of investments, Mourdoukoutas provides data that suggests India’s economic growth is set to outpace China.

Although India currently enjoys the rise of its economy, the country is becoming less attractive for investors in the long run. The reason? India is a “highly crowded trade,” as said by Herald van der Linde, head of Asia Pacific equity strategy at HSBC, in the bank’s Asia Equity Insights Quarterly.


“High fund holdings, premium valuations and slow pace of reforms make us reluctant to enter the market,” van der Linde wrote, adding that India’s earnings growth expectations are also slowing down.

Will India go to war with China and Pakistan over CPEC?

In his article, Mourdoukoutas also suggests that “if pro-Indian forces in Pakistan sabotage China’s CPEC route,” China should expect an open confrontation against India.

Mourdoukoutas also argues that it’s the reason why Beijing “should either appease New Delhi or forget about CPEC altogether.”

An open military confrontation between the world’s two most populous countries is very unlikely, especially considering the fact that India has already made several large-scale attempts to sabotage the CPEC.

Earlier this year, Pakistan alleged it had arrested a spy from India’s RAW, Kulbhushan Yadav. Islamabad believes that Yadav is responsible for hindering implementation of CPEC projects in Pakistan’s Balochistan province.

[Riaz Haq]

#Pakistan to establish 29 Special Economic Zones along #CPEC network in all 4 provinces http://bit.ly/2g1VAoT via @techjuicepk

Federal government is planning on establishing about 29 Special Economic Zones (SEZs) in all of the four provinces under China-Pakistan Economic Corridor.

SEZs will be capable of enhancing country’s economic capacity, expanding the exports and providing much-needed momentum to the country’s economy. They’ll prove to be a turning point in the industrial development and infrastructure also. Pakistan has always been lagging behind the other South Asian countries in utilizing the SEZs benefits.

What are SEZs?

The idea of SEZ first started in New York in 1937. As per SEZ Act of Pakistan,

“Special Economic Zone (SEZ) is a blanket term for various types of specialized zones with specific types of enterprises operating in a well-defined geographic area where certain economic activities are promoted by a set of policy measures that are not generally applicable to the rest of the country. Successful SEZs offer immediate access to high-quality infrastructure, uninterruptible power supply, clearly titled land, public facilities, and support services.

The fiscal benefits under the SEZ law include a one-time exemption from custom duties and taxes for all capital goods imported into Pakistan for the development, operations and maintenance of a SEZ (both for the developer as well as for the zone enterprise) and exemption from all taxes on income for a period of ten years.”

As per 18th Amendment, provinces can now independently formulate their investment and trade policies. SEZs will be a source of their collaboration in designing lucid policies.

The challenge to be faced by SEZs will be in selection of the area. Government should select remote locations so that other locations are not over crowded. They should design a unique incentive structure to attract potential investors. They should also provide residential facilities near economic zones.

Already established industries in Pakistan like textile, cement, household appliances, surgical equipment, mineral resources etc., will be the potential candidates for such SEZs.

This will be a huge step for Pakistan if properly implemented. Considering that China is also in the phase of upgrading its industrial base, CPEC may face some issues in obtaining the necessary material. The adequate coordination between two countries and the provincial and federal governments of Pakistan and designing an appropriate incentive structure are the necessary conditions for the success of SEZs under CPEC.

[Riaz Haq]

#India's #Modi Quietly Okays #Balochistan Specialist's Appointment as Next #RAW Chief to Wage #Terror in #Pakistan http://defencenews.in/article.aspx?id=149455 …

From Indian Defense News dated Dec 5, 2016

Special Director of Research and Analysis Wing (RAW) A K Dhasmana is likely to be appointed as the next chief of the country’s external intelligence agency. The 1981-batch Madhya Pradesh cadre IPS officer’s domain of expertise is considered to be Balochistan, counter-terrorism and Islamic affairs. He also has a vast experience on Pakistan and Afghanistan. He has served in key capitals, including London and Frankfurt and has also handled SAARC and Europe desks. The post of the RAW chief is falling vacant on January 31, 2017, with the incumbent retiring after a two-year stint. The RAW chief has a fixed tenure of two years unless the government extends the service length or the appointee. Research and Analysis Wing (RAW) Special Director A K Dhasmana is likely to be appointed as the next chief of the country’s external intelligence agency. 

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Research and Analysis Wing (RAW) Special Director A K Dhasmana is likely to be appointed as the next chief of the country’s external intelligence agency. He is considered to be an expert in Balochistan affairs.

In his Independence Day speech this year, Prime Minister Narendra Modi had said, “I want to express my gratitude to the people of Balochistan, Gilgit and PoK for the way they whole-heartedly thanked me.... People of a distant land I haven’t even seen....When they thank the Indian PM, it’s an honour for the 125 crore people of the country...”

Implicit in the statement was a veiled threat to the Pak political and military leadership that India too can needle them for the state-sponsored atrocities in these areas held by Islamabad and target that country’s unity and integrity. The PM’s statement came in the backdrop of brazen Pak stance to dedicate its Independence Day to freedom of Kashmir and stoking violence in J&K following Hizbul Mujahideen terrorist Burhan Wani’s death. This was the first time an Indian PM raised the Balochistan issue.
Dhasmana is also known to enjoy National Security Advisor Ajit Doval’s confidence. He will replace present RAW chief Rajinder Khanna.

India has been pussyfooting on human rights violations in Balochistan though Pakistan has been exploiting the ‘K’ word to the hilt at different international fora.
Officials close to Dhasmana said he is a go-getter and has an extensive network in the region. Through his vast experience and elaborate asset base in the region, he was able to stall the construction of Gwadar port by about six years, a senior agency said.

Meanwhile, the race for the top post in another key covert agency Intelligence Bureau (IB) is also gaining pace with the tenure of current Director Dineshwar Sharma ending on December 31. Three contenders—Special Directors SK Sinha and Rajiv Jain and Mumbai Police Commissioner Dattatray Palsalgikar—are in the fray.

http://www.newindianexpress.com/thesundaystandard/2016/dec/03/baloc...

[Riaz Haq]

#Pakistan sets up special #maritime force to secure #CPEC-linked sea lanes to #Gwadar | IHS Jane's 360 http://www.janes.com/article/66244/pakistan-sets-up-special-maritim... …

The Pakistan Navy (PN) has set up a new maritime force known as Task Force-88 (TF-88) to protect sea lanes linked to the China-Pakistan Economic Corridor (CPEC), which is expected to trigger a surge in maritime activity at the country's Gwadar Port on the Arabian Sea.

The new task force, which will reportedly comprise naval vessels, manned and unmanned aircraft, and other surveillance assets, was established on 13 December "for [the] maritime security of Gwadar Port and [the] protection of associated sea lanes against both conventional and non-traditional threats", according to a DAWN newspaper report.

Marines are also set to be deployed at sea and around the port to enhance security, a senior PN official was quoted by the paper as saying. 

[Riaz Haq]

#Pakistan gets additional $1 bn in #Chinese financing for roads, bringing #CPEC to $55 billion so far. http://reut.rs/2hkqJ7f via @Reuters

Dec 27 Pakistan expects to secure soft loans from China of about $1 billion this week for three road projects in the China-Pakistan Economic Corridor (CPEC), a Pakistani official said on Tuesday.

The roads lie on the western route of CPEC, a $55 billion network of roads, rail links, power plants and other infrastructure connecting western China to Pakistan's southern port of Gwadar.

They include roads from Raikot to Thakot, Yarik to Zhob and from Basima to Khuzdar, Ashraf Zaman, spokesman for Pakistan's National Highway Authority (NHA) told Reuters.

Zaman said a deal was reached with the Chinese to finance the three additional roads in November.

"Hopefully, agreement will be signed between the two countries in this regard in China-Pakistan Joint Cooperation Committee (JCC) meeting to be held on Dec. 29 in Beijing," he said.