CAREC: More Landlocked States Look to Pakistan's Gwadar Port

[Riaz Haq]

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 Central Asia region through Western China.

Pakistan to Bypass Afghan Wakhan Corridor to Trade With Central Asia Via 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 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 that has been 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: 

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.

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.

Rail Network Bypasses Afghanistan

 "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 Central Asia region through Western China.

Summary:

A growing list of landlocked Central Asian countries is lining up to use Pakistani ports of Gwadar and Karachi for trade. Uzbekistan is the latest nation to do so. China-Pakistan Economic Corridor (CPEC) infrastructure projects have strengthened Pakistan's connectivity with landlocked Central Asia region in recent years.  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.  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 Central Asia region through Western China.

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[Riaz Haq]

#China-#Pakistan friendship (1950-2020). Bonds of friendship go back to centuries-old #trade relations, when Chinese traders travel through Pakistan on their business trips to the #MiddleEast, #Europe, and the rest of the world. #CPEC #BRI - Global Times https://www.globaltimes.cn/content/1189007.shtml#.XsbCIXnkkak.twitter

Pakistan and China established diplomatic relations on May 21, 1951. The first high-level official delegation visited China just after three months of liberation, on January 4, 1950. But the bonds of friendship have gone back to centuries-old trade relations, when Chinese traders travel through Pakistan on their business trips to the Middle-East, Europe, and the rest of the world through ancient Silk Route. Over 2,000 yers ago famous figures such as the monks Fa Xian and Xuan Zang traveled through areas which are today known as Pakistan.

This relationship was built on the strength of successive achievements and becomes formidable with each passing day and year. The leadership of both countries is committed to taking this relationship forward.

To understand the depth of this unique relationship, here is a glimpse of the milestones reached over the years:

• 1950 - Pakistan becomes the third non-communist country, and the first Muslim one, to recognize the People's Republic of China and dispatched a high level delegation to China on January 4, 1950.

• 1951 The two countries established formal diplomatic relations on May 21, 1951.

• 1955 Visit of Vice President Madam Song Ching Ling to Pakistan marked the first high level visit from Chinese side.

• 1956 Visit of Prime Minister H.S. Suhrawardy to China, was the first high level visit from Pakistan.

• 1963 Historic Visit of Foreign Minister Zulfiqar Ali Bhutto to China

• 1963 Pakistan and China conclude boundary agreement through peaceful negotiations. Pakistan is the only and most friendly country in the neighborhood who has never had any difference of opinion or border dispute with China.

• 1964 Pakistan International Airlines (PIA) started its flights to Beijing, becoming the first non-communist country airline to fly from Beijing, entering into a new era of linkages between the two countries. Pakistan was the window for China to interact with the rest of world.

• 1965 Agreement on Cultural Cooperation signed, promoting understanding and harmony.

• 1970 Pakistan facilitates first visit by US President Nixon to China, paving way for the first-ever US-China official contact, leading toward the normalization of Sino-American relations.

• 1976 Agreement on Scientific and Cultural Cooperation signed, opening huge opportunities for Pakistani scientists and students.

• 1978 The Karakoram Highway, a construction miracle, linking mountainous Northern Pakistan with Western China officially opened, linking China to the Arabian Ocean.

• 1983 Pakistan and China sign MoU on Educational Exchanges, which led 32,000 Pakistani student studying in China today.

• 1989 The two countries sign an agreement on Reciprocal Encouragement and Protection of Investments. China is the largest investor in Pakistan.

• 1995 Agreement for Traffic in Transit is signed between the Governments of Pakistan, China, Kazakhstan and Kyrgyzstan, opening avenues of transit trade with other central Asian states and whole of Eurasia.

• 1995 Prime Minister Benazir Bhutto visits China as a special guest to attend the 4th Women's Conference in Beijing, bring the women of the two friendly nations close to each other.

• 1999 The contract to jointly develop and produce the JF-17 was signed, a landmark event for Pakistan's defense Industry.

• 2001 Premier Zhu Rongji visits Pakistan on the occasion of 50 years of the establishment of Diplomatic Relations.

[Riaz Haq]

Retired #Indian General: "#Ladakh is the only area where physical military collusion can take place between #Pakistan and #China...just to the East of Siachen glacier and is our (#India's) vulnerability" #LadakhStandoff #Kashmir #CPEC https://theprint.in/opinion/china-believes-india-wants-aksai-chin-b... via @ThePrintIndia

China is extremely suspicious of India. It believes that in the long term, India’s strategic aim is to restore the status quo ante 1950 by recovering Aksai Chin and other areas captured/secured by China. India’s alignment with the US, the presence of Tibetan government-in-exile in India, and the aggressive claims on Pakistan-occupied Kashmir (PoK) and Gilgit Baltistan — through which the prestigious China Pakistan Economic Corridor (CPEC) passes — only strengthen China’s suspicion.

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In the absence of any government or military briefings, there are speculations galore about the details of the incidents on the LAC and the political/military aims of China. More so, after the two informal summits between Prime Minister Narendra Modi and Xi — at Wuhan in 2018 and Mamallapuram in 2019 — wherein both leaders had committed to maintain peace and tranquility on the LAC and give strategic directions to their militaries on border management.

The starting point of any conflict between two nations is the political aim. Military actions are merely the means to achieve that aim. I will reverse the process and analyse the military situation and strategic importance of the areas of the India-China ‘face-offs’ to derive the political aims.

At the outset, let me be very categoric — just like in 1962, 1965, and 1999, we have once again been surprised both at the strategic and tactical levels. The manner in which we had to rush reinforcements from other sectors gives a clear indication that we were surprised. At the strategic level, it was the failure of the Research and Analysis Wing (R&AW) to detect the build-up of the PLA formations from the rear bases to replace the border defence units. Our tactical surveillance with UAVs and patrols has been inadequate to detect this large-scale movement close to the LAC. The ITBP mans the border and ironically is not under the command of the army.

As per unconfirmed reports, the PLA has crossed the LAC and physically secured 3-4 km of our territory along Galwan River and the entire area between Finger 5 and Finger 8 along the north bank of Pangong Tso, a distance of nearly 8-10 km (the areas are marked in this Indian Express sketch in its 2017 report). There also seem to be minor incursions in the area of Hot Springs, in Ladakh’s Chang Chenmo River valley and at Demchok.

My assessment is that the PLA has deployed maximum one brigade each in Galwan River valley and along the north bank of Pangong Tso. Precautionary deployment would have been done at likely launch pads for offensive and other vulnerable areas along the LAC. Reserves would be on short notice to cater for Indian reaction/escalation. The airfield at Ngari has been upgraded and fighter aircraft have been positioned there. It is likely that additional troops have been deployed at Depsang plains, Hot Springs, Spanggur Gap, and Chumar.

It is pertinent to mention that the intrusion by regular troops is not linear like normal border patrols going to respective claim lines. If a brigade size force has secured 3-4 km in Galwan River, it implies that the heights to the north and south have been secured, thus securing a total area of 15 to 20 square km. Similarly, along Pangong Tso, the PLA brigade having secured 8-10 km on the north bank would have also secured the dominating heights to the north to physically control 35-40 square km. And if China subsequently realigns its claim line based on the areas secured, the net area secured would increase exponentially.

[Riaz Haq]

Gwadar port to boost #Pakistan-#Afghanistan #trade. Bagging of fertilizer will be done in #Gwadar and bags shipped on trucks to Afghanistan which will generate employment for the locals in #Balochistan. #CPEC #infrastructure #trade #economy https://www.outlookindia.com/newsscroll/gwadar-port-to-boost-pakist...

Afghan Ambassador to Pakistan Atif Mashal said Islamabad''s decision to allow Afghan traders to import goods via the Gwadar port in Balochistan province will boost bilateral trade and transit ties between the two countries.

Mashal''s comments on Friday came following the arrival of a cargo ship, carrying 16,000 tonnes urea for transit to Afghanistan at the Gwadar port, reports Xinhua news agency.

Pakistan last month announced to allow import of the Afghan bulk cargo of wheat, sugar and fertilizers at the Gwadar port and onward transit to Afghanistan in sealable trucks, instead of being limited to containers.

"For the first time, bagging will be done locally instead of foreign ports. Urea will be bagged and shipped on trucks to Afghanistan at Gwadar, which will generate employment for the locals. Instructions have already been passed to allocate all labor jobs to local population," Abdul Razak Dawood, advisor to Pakistani Prime Mnister on commerce, textile, industry and production, and investment, tweeted on Friday.

In response, the Afghan Ambassador welcomed Pakistan''s decision.

"This will certainly have a positive impact on Afghanistan-Pakistan trade and transit ties. We must extend support to each other for revival of commerce and connectivity in Central and South Asia that will surely benefit people in the region," Mashal said in a tweet.

Pakistan announced in October 2019 to open the Gwadar port for the Afghan transit trade as the trade related infrastructure at the port was already to handle bulk cargoes to and from Afghanistan.

The first ship carrying containers for Afghan transit trade arrived at the Gwadar port on January 14.

Pakistan and Afghanistan had signed a transit trade agreement in 1965 that was revised in 2010, which calls for better facilitation in the movement of goods between the two countries.

Afghan traders would previously use ports in Karachi for import under the transit trade agreement.

[Riaz Haq]

The Trade and Transit Woes of Landlocked Afghanistan During COVID- 19
Pakistan plays a big role in dictating the fortunes of the Afghan economy.

https://thediplomat.com/2020/05/the-trade-and-transit-woes-of-landl...

Afghan Think Tank's View:

Being landlocked remains one of the most disadvantageous positions for a state, especially in the modern global economy dominated by maritime trade. Prominent Oxford University economist Paul Collier listed being landlocked with bad neighbors as one of the four key reasons why countries with a combined population of 1 billion are stranded in poverty.

Afghanistan is a typical victim of such a landlocked geographic position. Transit routes and access to the sea are hardly dictated by international laws, conventions, and bilateral agreements when it comes to neighboring Pakistan. The situation remains grim, even during the outbreak of COVID-19, at a time when global efforts are being made to ensure humanitarian support to all countries.

In Pakistan, the first case of COVID-19 was confirmed by the Ministry of Health on February 26 and the pandemic gained momentum with every passing day since. On March 16, the country closed all its borders with neighboring countries for two weeks. The decision included the closure of the major crossings at Torkham and Wesh-Chaman along the Durand Line, thus interrupting Afghanistan’s trade and transit. It is worth mentioning that the Wesh-Chaman crossing point had been closed in first week of March. As a result, around 2,000 containers were stranded along the crossing points, while another 6,000 Afghanistan-bound containers carrying food, medicines, and non-food items were piled up at Pakistan’s Karachi port.

On March 20, Pakistani Prime Minister Imran Khan tweeted his commitment to support Afghanistan during the crisis and said that he had instructed the authorities to open the Wesh-Chaman crossing point. Although, Torkham, not Wesh-Chaman, is the major crossing point, Khan’s tweets inspired relief among Afghan traders, government, and the public. However, the situation remained unchanged until April 9. The crossing points were open again on April 10, but traffic was diminished — three days a week, plus hours reduced to 10 hours per day rather than 24-hour service. Further, 100 percent of goods were being scanned before crossing, as opposed to the 5 percent threshold laid out in agreements between the two countries. This meant 200 to 250 trucks could cross over per week, compared to earlier figures of 4,000 to 5,000. At this pace, it will take an estimated three months to bring all the stranded containers to Afghanistan.

The delay has severe cost implications as well......

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The recent obstruction of transit trade and the approach of the Pakistani authorities has left the Afghan economy at the verge of a disaster, once again. A sustainable long-term solution lies in seeking alternative trade routes. The Afghan government has neither pushed for renegotiation of the bilateral agreement nor has it done enough to operationalize Chabahar for Afghan traders. The five-year duration of APTTA has already expired and there is a need to renegotiate it. A shift of transit trade to Chabahar would give the Afghan government much-needed bargaining power to renegotiate APTTA and ensure smooth trade and transit through both routes. The present Afghan government’s approach will only allow Pakistan to dictate the fortunes of the Afghan economy and exploit its vulnerable position.

[Riaz Haq]

A study highlights that if China uses the CPEC route for trade with six countries in the Middle East and Europe, it will be able to save almost $70 billion annually. The estimate is based on data for the year 2016-17.

Pakistan will also earn good revenue of around $6-10 billion through different types of services and fees. Mutual gains from the industrial, agricultural and scientific cooperation will be even more rewarding for both the countries. Thus, the focus must be on implementation and completion of projects on time.

https://tribune.com.pk/story/2232569/2-cpec-criticism-needs-improve/

[Riaz Haq]

#China #PLA expands modern high-altitude arsenal like tanks, rockets, artillery, helicopters and drones to address border threat from #India. Z-8G #helicopter can take off from 4,500-6000 meters above sea level .#Ladakh #Kashmir #Gilgit_Baltistan #CPEC https://www.globaltimes.cn/content/1190083.shtml#.XtVC21wXFSI.twitter

Since the Doklam standoff with India in 2017, the Chinese military has expanded its arsenal with weapons like the Type 15 tank, Z-20 helicopter and GJ-2 drone that should give China the advantage in high-altitude conflicts should they arise, Chinese analysts said on Sunday.

China's Type 15 tank made its public debut at the National Day military parade on October 1 last year.

With a powerful engine, the Type 15 lightweight main battle tank can effectively operate in plateau regions difficult for heavier tanks, and with its advanced fire control systems and 105 millimeter caliber armor-piercing main gun, it can outgun any other light armored vehicles at high elevations, the experts told the Global Times on Sunday.

China's most advanced vehicle-mounted howitzer, the PCL-181, also debuted at the parade.

At 25 tons, the PCL-181 is lighter, faster and can endure longer than the previous 40-ton self-propelled howitzer on crawler tracks.

It can digitally deploy its gun at the press of a button, with automatic calibration and semi-automatic reloading.

Both the Type 15 tank and the PCL-181 howitzer were displayed in the high-elevation plateau region of Southwest China's Tibet Autonomous Region in a China Central Television report on military exercises in January.

Another new weapon which debuted at the parade was a multiple-rocket launcher system, which uses an 8x8 wheeled high-mobility chassis and carries two sets of four 370-millimeter rockets, making it viable for high-altitude deployment, according to publicly available reports.

In the air, China unveiled the Z-20 utility helicopter at the parade. This medium-lift helicopter can adapt to all kinds of terrain and weather and can be used on missions including personnel and cargo transport, search and rescue and reconnaissance.

The Z-20 can operate in oxygen-depleted plateaus thanks to its powerful homemade engine, Chen Guang, vice general manager of Avicopter, the helicopter branch of Aviation Industry Corporation of China that developed the helicopter, told the Global Times previously.

Joining the Z-20 is the modified Z-8G large transport helicopter displayed at the Fifth China Helicopter Exposition held in Tianjin in October.

Focusing on plateau operations, the Z-8G is the first of its kind in China and can take off from 4,500 meters above sea level with a ceiling higher than 6,000 meters.

At Airshow China 2018, the Chinese Air Force unveiled the GJ-2 armed reconnaissance drone, which has a higher ceiling and can carry more payload than the previous GJ-1. Reports said it can be used to patrol the long border in high-altitude areas like Tibet.

These specially designed weapons have boosted the Chinese military's combat capabilities in high-altitude regions, enabling it to better safeguard national sovereignty and territorial integrity, Chinese analysts said.

Border incidents have recently occurred between troops of China and India.

Chinese border defense troops have bolstered border control measures and made necessary moves in response to India's recent, illegal construction of defense facilities across the border into Chinese territory in the Galwan Valley region in May.

Indian media reports said China recently deployed 5,000 more troops to the border area with India, and diplomats of the two countries have started talks on a peaceful resolution.

Chinese Defense Ministry spokesperson Ren Guoqiang said Friday at a regular press conference that the Chinese border defense troops are devoted to safeguarding peace and stability in the border regions and that the overall situation along China-India border was stable and under control.

[Riaz Haq]

#Pakistan #Navy chief talks regional security and tech wish list. Over 90% of its #trade is seaborne; it's a trade conduit to #China and #CentralAsia via #CPEC. Key threats to Pakistan’s security is from India’s #Hindu Nationalist mindset of #Modi. #CAREC https://www.defensenews.com/interviews/2020/06/03/pakistans-naval-c...

The Pakistan Navy, being a firm believer in the freedom of seas, has been contributing significantly in preserving maritime security in the Indian Ocean region. In this regard, the Pakistan Navy was the first regional navy to join Combined Task Force 150 in 2004. Similarly, to counter the increasing acts of piracy in the Gulf of Aden and Horn of Africa, we joined Combined Task Force 151 in 2009. So far, the Pakistan Navy has been the largest contributor to CMF operations, second only to the United States Navy. Pakistan Navy officers have also had the privilege of commanding both these task forces on numerous occasions.

While we continue to be part of CMF, the Pakistan Navy is also a proponent of a region-centric maritime security construct. Alive to the changing geostrategic realities in the region, the Pakistan Navy in 2018 instituted the RMSP to protect our national maritime security interests and fulfill international obligations in the Indian Ocean region. Pakistan Navy ships, with embarked helicopters, are undertaking these patrols along three axes: the Horn of Africa, the North Arabian Sea and the central Indian Ocean. The objectives of the RMSP include contribution toward maintaining good order at sea in our own area of interest and engagement with the regional navies to enhance mutual collaboration and interoperability.

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Progressive “capability development” is an important pillar of my vision for the Pakistan Navy. As warships are the mainstay of any navy, induction of surface platforms is essential to boost the Pakistan Navy’s operational deployability. In this regard, we have contracted for the construction of Type 054AP frigates from China and Milgem-class corvettes from Turkey along with transfer of technology. We are also inducting Dutch-designed offshore patrol vessels constructed in a Romanian shipyard.

In addition, we have contracted for the acquisition of Hangor-class submarines from China, and in the second phase their construction is planned in-country, for which necessary upgrades of Karachi Shipyard & Engineering Works Limited is in progress.

We are also focusing on the induction of modern aviation assets, including jet-powered, long-range maritime patrol aircraft, helicopters and UAVs. In addition, we are modernizing our existing fleet of warships and aircraft with upgrades to their weapons and electronic suites.


These inductions have led to expansion in our human resource capital. However, keeping a high “teeth-to-tail” ratio remains a priority. As our Navy expands in line with the recent restructuring, the induction rates have almost doubled. With regard to the budgetary allocations, our Navy, like many other navies, operates in a resource-constrained environment. However, with a clear and long-term plan for its modernization and capacity building, emerging challenges are being addressed through indigenization and cost-effective solutions.

The Pakistan Navy always looks forward to adopting new technologies, especially those which serve as force multipliers. Unmanned surface vehicles have a variety of utilities, such as for harbor defense, mine detection and countermeasure roles. We are presently evaluating this technology and will acquire it as per their suitability and feasibility to our requirements.

[Riaz Haq]

#Pakistan approves $7.2 billion #rail project. Modernization of 1,872 kilometers #railway track is expected to increase the speed of the passenger trains to 160km/h from 110km/h and boost freight as part of #China-#Pakistan Economic Corridor. #CPEC https://www.railway-technology.com/news/pakistan-approves-7-2bn-rai...

Pakistan has given its approval for the $7.2bn project to upgrade the railway between Karachi and Peshawar.

The approval was given by the Central Development Working Party (CDWP).

This 1,872km-long rail line is a part of the China Pakistan Economic Corridor (CPEC) and will link Kashgar, China, with Pakistan’s Gwadar Port.

Times of India quoted CPEC Authority chairman Asim Saleem Bajwa as saying that this approval is a major milestone in the CPEC phase two.

The modernisation of the rail line is expected to boost the speed of the passenger trains to 160km/h from 110km/h.

With this approval, Pakistan will undertake negotiations with China for the project finances and inform the International Monetary Fund regarding the loan.

The CPEC is a $60bn project under China’s President Xi Jinping’s Belt and Road Initiative to connect Asia, Africa and Europe with a network of highways, rail lines and sea lanes.

In April 2019, Malaysia and China signed a revised agreement to resume construction of the suspended East Coast Rail Link (ECRL).

As part of Belt and Road initiative, the ECRL project will connect Port Klang on the Straits of Malacca to Pengkalan Kubor in north-east peninsular Malaysia.

In March, Nepal decided to use the Chinese track gauge standard for its railway system in a bid to reduce costs.

In October 2018, China Railway Eryuan Engineering Group and Myanma Railways signed a memorandum of understanding (MoU) to carry out a feasibility study of the 431km Muse-Mandalay railway line.

[Riaz Haq]

"Belt & Road Economics": 2019 Report by the World Bank


http://documents.worldbank.org/curated/en/715511560787699851/pdf/Ma...


Pakistan’s GDP to increase by up to 6.43pc till 2030, if one is to take only the investment on transport infrastructure under CPEC into account. However if one includes the impact of some policy measures like reducing border delays and reduction in tariffs that the World Bank proposes, Pakistan can add as high as 14.06pc to its GDP.

“The impact of a more ambitious set of reforms could magnify the gains from the new infrastructure network. For instance, if in addition to an improved infrastructure network also border delays were reduced by half, BRI economies could double the GDP gains coming from infrastructure investment alone. As all countries, BRI and non-BRI, are subject to border delays we find that non-BRI economies benefit as well from trade facilitation reforms. Low-income countries, which trade intensively with countries or tend to have long border delays, would disproportionately benefit from better border management. Better border management would allow firms located in low-income countries to access cheaper inputs increasing their competitiveness in foreign markets. As a consequence, demand for labor would increase pushing nominal wages up. Finally, a more efficient use of intermediate inputs and lower transport costs would lead to a decrease in prices of final goods.”

“As a second exercise, we simulate a 50pc reduction in applied tariffs among BRI
economies. Average tariffs in BRI countries are relatively high compared to tariffs in advanced economies. Applied tariffs in BRI countries vary between around 14pc in Sub-Saharan Africa and 2pc in East Asia and Pacific compared to applied tariffs of below 1pc in G7 countries. This trade rade policy could have a substantial effect on countries in South Asia that could increase the impact of infrastructure improvement alone by a factor of 5.
Interestingly, countries located in the Middle East and North Africa and in Europe and Central Asia would benefit more by combining infrastructure investment with trade facilitation policies rather than combining it with trade policies. This result is explained by relatively high border delays in these regions and by the fact that they rely disproportionately more on non-BRI countries in terms of inputs for their production. The effect of combining both a reduction in preferential tariffs and border delays would increase the benefits for both BRI and non-BRI members more than individual complementary policies alone.”

“Our results show that BRI transport infrastructure projects increase GDP for BRI
economies by up to 3.35pc. The model also shows that BRI-related transport projects could increase GDP for non-BRI countries by up to 2.61pc and for the world as a whole by up to 2.87pc. These numbers are larger than typical findings for regional trade agreements such as NAFTA using a similar methodology. Contrary to regional trade agreements, which decrease tariffs within a narrowly defined set of countries, the BRI is expected to decrease trade costs between a very large number of countries, including many economies that are not part of the initiative but whose trade flows will benefit from the improved transport infrastructure network when accessing (or transiting through) BRI countries.” the report stated.

https://profit.pakistantoday.com.pk/2020/06/10/cpec-to-lift-pakista...

[Riaz Haq]

"Belt & Road Economics": 2019 Report by the World Bank


http://documents.worldbank.org/curated/en/715511560787699851/pdf/Ma...



Some
Southeast Asian countries are also perceived as having relatively good road quality.
But only Malaysia and some Gulf countries are perceived as having high-quality
roads, as in Western European countries. The quality of rail infrastructure mirrors
the quality of road infrastructure (figure 1.7b). The Russian Federation, Kazakhstan,
Ukraine, the Slovak Republic, and the Czech Republic form a corridor of relatively
good rail infrastructure, while most Southeast Asian countries and the countries
southwest of China, such as the Kyrgyz Republic and Pakistan, are perceived as having
some of the lower quality rail infrastructure. Across corridor economies, logistics
professionals perceive gaps in rail infrastructure as more prevalent than gaps in road
infrastructure. Seaport and airport infrastructure receive higher marks for perceived
quality (Wiederer 2018).

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Even though China is closer to Southeast Asia and South Asia than to Europe, the
physical connectivity with the Asian regions is weaker. Due to poor-quality land
infrastructure and level of service, almost all freight between China and Southeast
and South Asia goes by sea. The transport infrastructure in Myanmar is so poor that
virtually no traffic flows overland to it. China’s only land connectivity with South Asia
is through the Himalayas. China connects with Pakistan by road over the Khunjerab
Pass at an altitude of 4,600 meters, but the road is open only for seven months of the
year. China–Nepal–India connectivity is very limited due to the poor infrastructure in
Nepal and the need for four transshipments along the route

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• Times to comply with regulatory and border requirements for imports are higher than
global averages on all corridors except the New Eurasian Corridor, and times to export
are higher than the global average on all corridors except the New Eurasian and China–
Pakistan corridors (figure 1.13). The gap between import and export times is higher than
the global average on all but two corridors (the China–Mongolia–Russia Corridor and
China–Indochina Peninsula Economic Corridor), suggesting a disproportionate burden
for traders importing in corridor economies

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Expected BRI investments are very large for some countries. Some 66 percent of the
total BRI investment is expected to accrue to seven countries, with Indonesia, Malaysia,
Pakistan, and the Russian Federation accounting for 50 percent of the total. Scaled by
2017 GDP, the median BRI investment amounts to under 6 percent of GDP, an amount
that is not large in relation to the investment needs of many countries, especially if
disbursed over several years. For example, median annual BRI financing in the WIND
database would amount to slightly more than 1 percent of GDP if disbursed over the five
years until 2023. But in some countries estimated investment surpasses 20 percent of 2017
GDP (figure 1.18).

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Using this approach, Reed and Trubetskoy (2019) assessed the value of 68 BRI projects.
Half of them generate little value when built in isolation because they connect only
smaller cities or do not add new least-cost paths between cities. But when the entire
network of projects is built, the share falls to around one-third, confirming that the
value of each project depends on other projects. The most valuable projects connect
highly populous cities to the network, such as the Kunming–Kolkata High Speed Rail
(Bangladesh, India, and Myanmar), the Tehran–Mashhad rail electrification in the Islamic
Republic of Iran, and the expansion of the ML-1 Karachi–Hyderabad–Lahore–Peshawar
railway in Pakistan. This analysis points to the importance of project selection and appraisal
to ensure the success of BRI investment.