Importance

It is true that this CPEC has its own importance for Pakistan. On the
other hand, the development and progress of the China-Pakistan
Economic Corridor project has spurred and given birth to some
debating issues. If this CPEC project will bee completed then the
economic cycle of Pakistan will started moving at a maximum speed.
For the information, this CPEC is a package that consist of the
infrastructure projects and these projects have a worth of $46 billion.
The amount of $33 billion, it is dedicated and fixed towards establishing
and creating energy and also power projects in Pakistan. Below are
some more valid reason with regard to the importance of CPEC for
Pakistan.

It is because of this CPEC that we will be able to improve our energy

supply and too textiles and manufacturing. Because of this project,
there will be an increase in exports for our country and this will
ultimately lead to and result in the sustained and massive economic
growth.

This CPEC will create and make at least and about 7,00,000 direct jobs.
It will come out as a springboard so that the industries like that of retail
and hospitality and also health and education can be developed in a
better way.
It is reported that if this CPEC project will gets complete on time then
the real-estate industry will to get a benefit. It is seen that in Gawadar,
all of the property prices got doubled in these recent months.
This CPEC is a blessing for us because it can well catalyse the
performance of Pakistan. It can transform our country right from an
agrarian economy to a massive one logistics hub. This CPEC project
consist of many of the coal fired power projects and plants. These
projects can for sure make a contribute in solving our energy crisis.

We are sure that this CPEC project can bring an economic revival for
Pakistan. It is the time that we should reduce these socio-economic
inequities among all of our ordinary citizens. This project can help us in
this aspect. This is all about the importance of CPEC for Pakistan. This
project is almost at the completion stage. The economic position of
Pakistan will for sure improve in a dramatic way upon the completion
of this project.

China Pakistan Economic Corridor:

Pakistan’s Geographic Position Pakistan is a country with deserts,
wetlands, plains, coastal belt, forested mountain, snow-covered peaks
and coastal belt. On the Eastern border of the country lies India, the
northeastern border of the country is shared by China, the country is
bordered by Afghanistan to the west and northwest and Iran to the
southwest. Towards the southern coast of Pakistan lies the Arabian Sea.
Pakistan has a total area of around 796,096 square kilometers; Pakistan
occupies a place of great strategic importance in Asia. Geopolitical and
Geostrategic Importance of Pakistan Geopolitics or Geostrategic refers
to the area of study that examines how well a country exploits its
geography to achieve its political and strategic objectives.
Though Pakistan has gained many benefits from its important
geostrategic position, it also has accrued many losses due to the same
reason. For instance, Pakistan has always witnessed huge amounts of
investments for being the route to the landlocked Central Asian
countries, it also had to suffer enormously due to the global war on
terror; following the September 9/11 attacks and direct threats by the
then President of the United States, George W. Bush, Pakistan felt it
was left with no choice than to provide access to the United States to
land-locked Afghanistan; however this decision backfired as Pakistan
continues to pay the cost of the decision to this day in the form of
increased terrorism and loss of life of its citizens. Pakistan-China
Relationship paving the way to CPEC Pakistan and China have always
maintained close friendly relations. China has always come to support
Pakistan; in particular, whenever Pakistan is threatened by India or the
United States-China comes for Pakistan’s support. China and Pakistan
have managed to maintain a close relationship despite changing times
and circumstances. What is CPEC? The China Pakistan Economic
Corridor (CPEC) is regarded as the brainchild of Chinese President Xi
who presented the CPEC as the pilot project of the majestic idea of
“One Belt and One Road” (OBOR) also referred as Belt and Road
Initiative (BRI). The Belt and Road Initiative (BRI) in addition to the CPEC
also includes five other international economic corridors including the:
1. The New Eurasia Land Bridge Economic Corridor was also known as
Second Eurasia Land Bridge. 2. The China-Mongolia-Russia Economic
Corridor. 3. China-Central Asia-West Asia Economic Corridor. 4. China-
Indochina Peninsula Economic Corridor. 5. China-Pakistan Economic
Corridor. 6. Bangladesh-China-IndiaMyanmar Economic Corridor
(BCIM). In a state visit to Pakistan in April 2015 Chinese President Xi
Jinping presented a “1+4” cooperation model. According to this model,
the first goal was to construct the CPEC, highlighting the “1” in “1+4”
cooperation model along with focusing on the construction of Gwadar
Port, energy, basic infrastructure and industrial cooperation
highlighting the “4” in “1+4” cooperation model. The China-Pakistan
Economic Corridor (CPEC) is a 3,000-kilometer network of roads,
railways, and pipelines to transport oil and gas from southern Pakistan's
Gwadar Port to Kashgar city, northwestern China's Xinjiang Uygur
autonomous region. Financial Metrics associated with CPEC According
to a report published in the Financial Times, Sander and Stacey (2017)
note that, • Total Investment by China: China plans to invest around
$55 billion in Pakistan in lieu of CPEC. • Investment in Power Projects:
China plans to invest around $35 billion in various power projects
around the country. • Size of Chinese exports: The size of Chinese
exports to gradesfixer.com 1 / 5 Pakistan increased from $9.3 billion in
2012 to $16.5 billion in 2015, this rapid expansion in size of exports is
enough to provide an idea of the increase that will be witnessed in the
future. Benefits of CPEC for Pakistan Positive Impact on GDP. According
to a forecast made by the IMF, the China Pakistan Economic Corridor
(CPEC) is bound to increase the GDP of Pakistan by more than five
percent by the end of 2020. Price water house Coopers (PwC) forecast
that if the CPEC plan is successfully implemented the GDP of Pakistan
will increase from the present $988 billion to almost $4.2 trillion by the
end of 2050 (Hussain D., 2017). Deloitte predicted that for Pakistan the
total worth of the CPEC infrastructure projects would be equal to 17
percent of the GDP (Hussain D., 2017). Job Creation and Local Economic
Development. The creation of China Pakistan Economic Corridor (CPEC)
is bound to provide long-term economic and social benefits to Pakistan.
In 2014, Pakistan’s Ministry of Planning, Development, and Reform
published a long-term proposal for economic development in 2014
which set 2025 as the target for transforming Pakistan from a lower-
middle-income nation to an upper-middle-income nation. In order to
achieve this goal, Pakistan aims to attract huge amounts of foreign
assistance, for this particular reason, the development of CPEC is
especially important. Once achieved successfully, the CPEC would not
only assist in economic development of Pakistan but would also result
in creating a huge number of job opportunities. It is expected that the
China Pakistan Economic Corridor (CPEC) would create around 700,000
direct jobs between 2015 and 2030 and would contribute around 2.5
percent to the annual growth rate (Shah, 2017). Eradication of Religious
Extremism. An oft-cited reason for the creation of CEPC is that it will
bring in economic prosperity for Pakistan that will help in eradicating
the menace of religious extremism. Pakistan holds the belief that rapid
economic development facilitated by the CPEC would help to stabilize
the economic, political and security situation in Pakistan. Disadvantages
and Risks associated with the CPEC for Pakistan The Debt Trap. It is
risked that the CPEC would ensnare Pakistan into a debt trap that it
would never be able to get out. It is estimated that once the CPEC
becomes fully operational Pakistan will have to pay around $3.5 billion
annually for a period of 20 years. Khurram Hussain, a prominent
economist of Pakistan calculates these costs as, “the debt service
outflows will be about $1 billion and the return on equity will be $646
million if it is kept at 17 percent. Add to that $1.9 percent as repayment
of principal. That means an annual net outflow of $3.546 billion per
year once the corridor becomes fully operational” (Hussain, 2016).
Another prominent Pakistani economist, Hafiz Pasha has also expressed
reservations over amount of debt Pakistan will undertake to build up
the CPEC, he estimates that CPEC debts would add up around $14
billion to Pakistan’s total debts increasing them to around $90 billion by
the end of the fiscal year 2019 (Venkatachalam, 2017). What is more
frightening to note is the fact that Pakistan has no strategy prepared to
repay the growing Chinese debt burden as Khurram Hussain notes with
irony that when IMF team inquired Pakistan officials about their
planned strategy to repay the Chinese debt the Pakistani officials
replied, “additional Chinese investment over the longer term, building
on CPEC as a platform, could also help cover the projected CPEC-related
outflows”. The Risk of Terrorism. One of the most important risks facing
the establishment of China Pakistan Economic Corridor (CPEC) is
terrorism. Terrorism has been a significant concern for Pakistan for the
last two decades. Terrorism has adversely affected Pakistan’s economic
growth and development prospects. Although Pakistan has been
engaged in fighting a long, hard battle against terrorism, it has not
gradesfixer.com 2 / 5 yet succeeded in its battle. Since the CPEC is
hugely important for the future of Pakistan economic growth and
national prosperity, it is feared that the construction sites and the
personnel working at these sites may become a target for potential acts
of terrorism. Indeed there have been several occasions where Chinese
engineers working in Pakistan have become a target; many lost their
lives in these attacks while numerous others were injured. In
September 2016, Baloch Separatists killed two Chinese engineers
working in Baluchistan while injuring many others. Although the
Pakistani authorities have promised security to the Chinese staff
employed for the CPEC, it is merely a short-term commitment. As the
time passes and as the transportation network for the CPEC expands
towards far flung areas it will become difficult to guarantee security to
the Chinese workers as the cost to provide security personnel and the
material support will also increase accordingly. Till date, it is uncertain
how Pakistan will manage to ensure a strong military presence to
ensure the security of the transportation routes. In this regard, no
security blueprint has been outlined by Pakistan. Unstable Political
System in Pakistan. A stable political system in Pakistan is essential for
the success of the China Pakistan Economic Corridor (CPEC). One of the
biggest problems plaguing Pakistan since independence is its unstable
political system. Power in Pakistan continuously oscillates between the
civilian and military leaders; this has caused much turmoil within
Pakistan. President General Pervez Musharraf resignation in Pakistan in
2008 was the last time a military ruler ruled the country, after the
general elections of 2009; Pakistan People’s Party (PPP) came into
power and completed the first 5 year term of a civilian government.
Following PPP tenure PML (N) came into power. For the first time in the
history of Pakistan the political landscape of Pakistan has become a bit
stable, however, the past history of Pakistan dictates that the nature of
Pakistani politics is uncertain and anything may happen anytime. This
uncertain political culture may deeply hurt the future of the China
Pakistan Economic Corridor. Benefits of CPEC for China Stability of
China’s Western Periphery. China firmly holds the belief that a safe and
stable Pakistan would only be of its own benefit. China believes that
any assistance it provides to Pakistan in the political, economic or
security arena it would ultimately translate into its own benefits. China
is hopeful that injecting money to spur rate of Pakistan’s economic
development would not only reinvigorate Pakistan’s economy through
construction of oil and gas pipelines and investment in infrastructure
and all this would ultimately lead towards an internally stable Pakistan.
Chinese logic is simple; China believes stability can only be achieved
through economic development. A sound and stable Pakistan is
essential for Chinese interests as it would result in the provision of
stability for Chinese Western Periphery, especially the province of
Xinjiang. Helping Conserve Chinese Interests in East Asia. China sees the
CPEC in terms of its strategic benefits in East Asia and the way the
United States continuously threatens them. China believes a move to
secure and expand the strategic space by heading west would help to
counter the threat of increased influence of the United States in the
East. In this regard, Pakistan is of utmost importance to China as it can
act as a bridge between China and South and Central Asia and the area
having the greatest level of strategic importance, the Middle East. An
internally stable Pakistan would help China to apply far greater
influence in these regions. This is one of the most important reasons
why China is willing to invest a large amount of money in Pakistan in
the economic corridor. Disadvantages and Risks associated with the
CPEC for China Risk Imposed by Cultural Differences. The successful
completion of any joint business venture between two entities,
corporations, organizations or countries as in the case of CPEC depends
on how well the people work and gradesfixer.com 3 / 5 interact with
each other. At the core of any successful business venture lie the
people as the actual work on the ground has to be completed by them.
The better the people belonging to the two parties to the joint venture
cooperate with each other the greater becomes the chances of success.
As China and Pakistan expand cooperation with regard to the China
Pakistan Economic Corridor and as a greater number of Chinese
corporation start investing within Pakistan, the chances of cultural
difference giving rise of misunderstandings may increase that in turn
may adversely affect the success of the CPEC. In order to successfully
operate the Chinese corporation must learn how to behave and act
according to local norms, cultures and moral practices. It is essential for
the Chinese firms operating in Pakistan that they possess enough
information to carry out business in Pakistan. In order to ensure
successful completion of CPEC, the Chinese government must also
abandon its old habit of dealing only with the Pakistani government and
instead ensure people to people contact and engage with the local
communities. CPEC and India’s Dilemma The strategic China Pakistan
Economic Corridor (CPEC) seems to have greatly threatened Indian
interests. India fears that if the plan of China Pakistan Economic
Corridor (CPEC) is materialized it will shift power in favor of Pakistan
and will cause it to lose its position in the world (Kumar, 2016). The
statements of various officials occupying high-level positions in the
Indian government confirm this fact. While responding to questions of
the Lok Sabha in December, Minister for External Affairs, Sushma
Swaraj noted that “Government has seen reports with regard to China
and Pakistan being involved in infrastructure building activities in
Pakistan Occupied Kashmir (POK), including construction of China-
Pakistan Economic Corridor. The government has conveyed its concerns
to China about their activities in Pakistan Occupied Kashmir, and asked
them to cease such activities” (Chandra, 2016). India’s anger over the
CPEC seems to have been propelled by the fact that the route to the
corridor passes through the disputed Kashmir region. Kashmir has long
been a center of a dispute between India and Pakistan. India has almost
half a billion troops stationed in Kashmir to exert its control over the
region. In these circumstances, India finds it unacceptable that a route
which benefits Pakistan, its arch-enemy passes through this region.
Commenting on this matter, Seshadri Chari, a senior member of the
ruling Hindu nationalist Bharatiya Janata Party remarked, “China is
using Indian land area illegally occupied by Pakistan”. The Prime
Minister of India, Narendra Modi also seems to have been highly
perturbed by the proposed China Pakistan Economic Corridor, while
speaking at a seminar in New Delhi on January 17, 2017 he remarked,
“Only by respecting the sovereignty of countries involved, can regional
connectivity corridors fulfill their promise and avoid differences and
discord.” Two days later, on January 19, 2017, the fact that Modi was
referring to the China Pakistan Economic Corridor was confirmed by the
foreign secretary of India, Subrahmanyam Jaishankar who remarked,
“The CPEC passes through a territory that we see as our territory.
Surely people will understand what [the] Indian reaction is. There needs
to be some reflection and I am sorry to say that we have not seen signs
of that.” United States Concerns over the CPEC. The United States of
America has repeatedly aired its concerns over the CPEC. The Trump
administration has informed Congress that it believes that the CPEC
passes over a disputed territory. The fact that the United States openly
opposes the CPEC became apparent when the US Defence Secretary
James Mattis told the Senate Armed Services Committee that, “the One
Belt, One Road also goes through disputed territory, and I think that in
itself shows the vulnerability of trying to establish that sort of a dictate”
(Iqbal, 2017). The China Pakistan Economic Corridor is touted as the
project of the century. The CPEC will not only be a trade route that
connects two regions, it will be much more than that. gradesfixer.com 4
/ 5 For Pakistan, the economic corridor is bound to provide millions of
people job opportunities, improve the economic well- being of million
others as well as provide facilitation in setting up large-scale finance,
industry, trade and energy-related projects. For China, the CPEC will
provide it a geostrategic advantage and will help it to emerge as the
new superpower in the world. China and Pakistan both want a
successful completion of the CPEC; however, it is important that the
countries stay wary of the external threats posed by the United States
and India and the internal threats posed by terrorism in Pakistan and an
unstable political climate. For Pakistan, it is important that it keeps
checking that it does not enter into such debt terms with China that
makes it impossible for the country to pay off loans in the future.
3 CPEC:
CPEC: Challenges and prospects
Outline:
1.0 Introduction
2.0 Background
2.1 vision behind CPEC
3.0 challenges
3.1 Domestic challenges
a) Law and order
b) Political instability
c) Civil-military relations
d) Inter-provincial issues regarding CPEC
e) Balochistan factor
3.2 International challenges
a) India’s hostile attitude towards CPEC
b) Indo Afghan nexus.
c) Iran (chabahar port v/s Gwadar)
d) Involvement of big powers.
4.0 Prospects
a) Economic growth
b) Meeting the energy shortfall challenges/requirements
c) Infrastructure development
d) Foreign direct investment
e) Employment generation
f) Promotion of tourism
g) Regional connectivity
5.0 Suggestions:
a) Security measures
b) Political stability
c) Reconciliation process with Afghanistan
d) Transparency and openness to public and accountability
e) Addressing grievances of provinces
f) Stability in balochistan
6.0 conclusions

Title: CPEC: Challenges and prospects

ESSAY
The China Pakistan economic corridor is an ambitious project that aims
at changing the geo-economic dynamics of Pak-China relations and
augmenting the trading activity in the region. It anticipates economic
growth, meeting the energy shortfall requirements, employment
generation, foreign direct investment, infrastructure development,
promotion of tourism and others. The multi-billion project offers a long
term investment in Pakistan involving the regional countries as well.
However, the project is being challenged by domestic controversies and
external opposition. In this scenario if these challenges are effectively
tackled, it may lead to economic interdependence that would be
climacteric for peace and economic development for the region.

The vision behind CPEC is to improve the lives of people of Pakistan and
China by building economic cooperation, logistics and people to people
contact for regional connectivity. Moreover, it includes integrated
transport and IT system, communication channels, agricultural
developments and poverty alleviation. Furthermore, it incorporates
tourism, financial cooperation, Human Resource Development and
others.

After the completion of the corridor, it will become a primary gateway

for trade among China, Africa and the Middle East. It is expected that
this corridor will help cut the 12000 kilometers route. There are
myriads of benefits of CPEC , that are stimulating the hope for bright
future of the corridor, the journey would not be without hurdles as
there are several intrinsic and extrinsic challenges that are an
impediment to the churning out of CPEC.
The first and foremost challenge domestically is an absence of rule of
law. The basic purpose of rule of law is to provide security of life and
free movement to people. "The World Justice Project" (WJP) analyzed
more 113 countries and Pakistan has been ranked 106th in terms of
rule of law experienced by the citizens, getting position on the above
Afghanistan, Ethiopia, Zimbabwe, Cameroon, Egypt, Cambodia and
Venezuela. Without rule of law sustained development remains an
elusive goal; peace, investment, development are all linked with the
values of law. Moreover, law and order situation is so inadequate in
Pakistan that international as well as domestic investors are reluctant
to invest in Pakistan.
“China Pakistan economic corridor (CPEC) only could become a game
changer, if Pakistan succeeded in
Overcoming its security challenges"
- The former Diplomat Riaz Muhammad Khan-
The second major threat to the CPEC project is political instability in the
country that has become a serious problem in Pakistan. Political
firmness is Pre-requisite for the economic growth and development of
the country. Uncertainty is ahead of Pakistan political crisis. No Prime
Minister could hold the office for 5 years since, after the independence
1947. Nawaz Sharif's disqualification could set up a spell of political
instability in Pakistan. Resultantly security issues and political instability
arise in Pakistan leading to military interference in the state affairs
getting ground for a military coup. Thus political uncertainty unless not
done away with, would continue to remain a challenge for the CPEC
projects' implementation progresses.
"CPEC all investment will be withdrawn if there is any Political turmoil
in the country"
-Ahsan Iqbal-
The third major obstacle to implementation progress of CPEC is an
institutional imbalance. Pakistan is a country where the military has
ruled for around 35 years out of 70 years of her life. Throughout all the
three martial law regimes, the constitution of Pakistan was abrogated,
suspended or held in abeyance. Presently, the CPEC is facing
tremendous security challenges. In order to guarantee a secure
environment for the CPEC development, the military is expanding its
power. This phenomenon significantly affects the civil military relations
and civilian control over the military that is challenging the process of
democratic transition. The need has arisen that the military should be
kept aside from the interfering in the political matters of the country.
So that the government might make policies for the in the way people
want.
The fourth serious challenge which CPEC is facing is inter-provincial
grievances. It is alleged that Punjab gets lion's share in CPEC projects at
the cost of other provinces. It fashioned rifts between the federal
government and the provinces. The major conflict was "The route
change" KPK government demurred that the Federal Government
wants to build eastern route first which passes through the central
Punjab, despite the fact that eastern route is longer than western route
which would be more costlier. In this connection, Punjab province
would get the most benefit, depriving other provinces their due share.
China urged Pakistani leaders to resolve issues over CPEC project.
Minister for inter-provincial co-ordination Riaz Pirzada said that CPEC is
crucial for the country, it should not be made controversial by saying
that the entire country and all the provinces would benefit from it,
particularly backward areas of KPK and Baloachistan.

Fifth major challenge towards implementation of CPEC is the unrest in

balochistan province. Due to the fact that Gwadar port is located in
province of balochistan the ongoing insurgency in the provinces poses
crucial challenges to the success of CPEC project. Consequently, the
benefits of CPEC investment can be accurately measured if its impact
on terrorism can be calculated.

Apart from domestic challenges, CPEC project implementation is facing

several international challenges as well.
The first and foremost external challenge to the corridor is India’s
belligerent attitude towards CPEC. Indian felonious demand is that
Gilgit Baltistan is a disputed territory, therefore; route of CPEC passing
through that territory is unjustified (illegal). Another considerable
concern within India is that she sees Gwadar a deep-sea port as a part
of China's “string of pearls” basis that extends from its eastern coast to
the Arabian Sea. China is also developing ports in Sri-Lanka and
Bangladesh.( that are considered a potential military challenge to
India). India perceives that in future China can block sea access to India
by burgeoning such ports. Consequently, India is unhappy with the
development of CPEC and trying to sabotage CPEC by playing its card in
Balochistan. The Recent arrest of Indian agent Kulbhushan Jadev
testifies the involvement of India in Balochistan in particular and in
Pakistan in general.
The second challenge to the success of CPEC is Indo-Afghan nexus.
Internal instability in Afghanistan remained unruly for Pakistan. The
roots of almost all terrorist related activities are traced back to
Afghanistan. Besides, India is making military bases in Afghanistan from
where it carries out terrorist activities.
“RAW is operating from Afghanistan to sabotage CPEC”
General Zubair Hayat
This Indo-Afghan nexus is causing problems because of “Durand Line”
that is a porous border.

The third major challenge in CPEC implementation is Chabahar port.

Iran in cooperation with India is developing chabahar port. India is
investing billions of dollars in this project so as to neutralize the
potential of Gwadar port and curtail CPEC. It is in completion to
Gwadar. But President Ruhani said, “Chabahar is not in competition to
Gwadar rather both will complement each other.”
Fourth major obstacle is involvement of big powers. Two major powers
United States and Japan appear to be excessively uneasy with the
fruition of multi-billion dollar project. The US is making different
policies to contain China. America considers rising China threat to its
global dominance. Thus America is creating hurdles for Gwadar port,
besides America perceives that Gwadar port could be used for the
military purpose in future. As a part of the containment policy, America
signed “strategic and economic partnership” with India. American
support to India for the nuclear supplier Group (NSG) is also part of that
partnership. Their cooperation is not the only challenge for China but
for also for Pakistan. On the other hand, Japan is stressed because with
the consumption of CPEC the distance amongst China and its trading
countries would reduce by as much as 9000 kilometers that will have
deep impact on Japan’s exports.
Despite formidable municipal and international challenges the benefits
and prospects of CPEC are extensive that are likely to come to fruition.
If CPEC is appropriately coped, it from all counts will prove a game
changer; this project has potential to transform economic growth.
Besides, it gives hope of having regional cooperation, transit, trade,
energy transformation and others.
Firstly, the Pak-China economic corridor will boost the economy of
Pakistan. Pakistan is under heavy debt. According to Finance Minister
Ishaq Dar, “current debt on Pakistan is 73 billion dollars.” A report
released by a think-tank of South Asian Investors says, that the multi-
billion dollar project is expected to boost the country’s GDP growth rate
to 7.5% during the period 2015–2030. According to International
ratings institution Moody’s report China-Pakistan Economic Corridor
(CPEC), will increase industrial production and surge development
work. CPEC is a 3,218-kilometer long route; the completion of the route
will take several years, consisting of highways, railways and pipeline.
Once China Pakistan Economic corridor is completed; it will open doors
to immense economic opportunities not only to Pakistan but will
physically connect China to its markets in Asia, Europe and beyond.

Secondly, the project will encounter the energy shortage necessities of

Pakistan. An acute ongoing energy crisis is posing a serious dilemma for
Pakistan. Available data of National Transmission and Despatch
Company NTDC and K-Electric Limited (KEL) say that total installed
electricity production capacity is 23,234 megawatts (MW). And the
shortfall lies -between 5,000 MW and 6,000 MW. Secretary of Water
and Power, Mohammad Younis Dagha said that under the China
Pakistan economic corridor (CPEC) project, the Chinese companies will
be investing $35 billion in 19 power projects which will produce 12,134
MW of electricity. According to K-Electric KEL and National
Transmission and Despatch Company NTDC, by 2020 Pakistan will be
able to produce 34,785MW of electricity.
Thirdly, CPEC is major driver of Foreign Direct Investment (FDI) in
Pakistan. It has been a dry spell for Foreign Direct Investment (FDI) in
Pakistan. Our country did not attract FDI in the wake of recent years.
The country had received a meagre amount in 2015. Nonetheless,
China Pakistan Economic Corridor (CPEC) became the major driving
force in bringing FDI to Pakistan. According to the World Investment
Report (WIR) 2017, the foreign direct investment in Pakistan has
increased by 56 percent to over $2 billion. The confidence of investors
has much improved, that resulted in a large amount of foreign
investment in infrastructure industries, especially electricity generation
and transport. Many examples can be quoted here for instance; Power
Construction Corporation (China) and Al-Mirqab Capital (Qatar) have
started to jointly invest in a power plant at Port Qasim, which is the
second largest port in Pakistan.
Fourthly, the China Pakistan Economic Corridor (CPEC) will help
Pakistan improve its infrastructure. Under the China Pakistan Economic
Corridor (CPEC) banner, the work on several infrastructure and
development projects is in progress. Besides Industrial zones, several
power plants and road infrastructures are initiated in Pakistan.
Moreover, motorway between Karachi and Lahore which is eleven
hundred kilometers long, the Karachi-Peshawar main railway line which
is one hundred and sixty kilometers long, Karakoram Highway between
Rawalpindi and Chinese border would be reconstructed and pipelines
which would transport oil and gas would help to boost the economy on
a whole new level and would also help in controlling unemployment.
Fifthly, CPEC initiative would immensely help in growing employment
opportunities. CPEC through employment generation would greatly
help in addressing the grievances of unemployed youth. As stated by
the associated press of Pakistan report Workforce grew by 2.0 per cent
in 2016-17. According to the international labour organization, CPEC
would bring 400000 jobs to the country. While the Applied Economic
Research Centre has estimated that the mega initiative would provide
around 700000 direct jobs between 2015 and 2030.
Sixthly, besides creating job opportunities China Pakistan Economic
Corridor (CPEC) will have a huge impact on tourism. The investment in
Gwadar port and other infrastructure projects through the China
Pakistan economic corridor, tourism in the country is likely to increase
in the coming years. CPEC will greatly help in increasing tourism
especially in Gilgit Baltistan which would ultimately be favourable for
the local public. Moreover, World Bank has pledged to sponsor tourism
in Pakistan.
Seventhly, CPEC would act as a catalyst in regional connectivity. China
imports 80% of oil and does more than 70 percent of trade through the
South China Sea and the United States. CPEC would provide a land
route to China. As these two countries are the primary beneficiaries of
the project. Besides CPEC will most certainly benefit the entire region
connected to Pakistan and China. Moreover, the CPEC will give China
access to the Arabian Sea through Gwadar which will significantly
promote Chinese trade with countries in the Middle East, Africa and
many countries in Europe. Furthermore, CPEC will offer transit trade
facility to the landlocked Afghanistan and the Central Asian States.
Unequivocally this project will economically integrate the region and
create interdependence. CPEC has a great potential to bring progress
prosperity and stability in the region. The China-Pakistan Economic
Corridor CPEC is harvesting greater attention around the world where
more and more state leaders are inclined to be part of this multi-billion
dollar project. Despite Inevitable prospects of the corridor, there are
certainly formidable threats and challenges to suppress the success of
the CPEC. But some carefully adopted steps would guarantee the
promising success of the CPEC.
First, China Pakistan economic corridor is facing several security related
threats. As stated by official militants are trying to disrupt the
construction of an “economic corridor” and have killed 44 workers
since 2014. Pakistan launched different operations to curb the terrorist
activities. Overall security in pakistan has improved in past few years.
Despite the fact terrorists still manage to carry out attacks. The recent
spate of terrorist bomb blasts in quetta, balochistan and sehwan are
evident to that. Hence to provide security to workers along CPEC
pakistan needs more vibarant security measures to ensure Peace for
smooth operationalization of CPEC.
Moreover Political stability is imperative for the success of CPEC.
Political stability is a must for the development and progress. It is
political decision making which impacts the behavior of the institutions.
Hence, all the institutions may work within their domain. So that
political instability could be curtailed. Considerable research suggests
that political events and economic growth are interconnected.
Additionally, despite an avalanche of data available on CPEC initiative
Government officials as claimed by Government officials, Lack of
transparency and accountability still remained one of a greater issue for
CPEC completion. Economists and diplomats said that the nation could
not reap benefits associated with the corridor by hiding information
from the public. Fairness and straightforwardness demand a standing of
neutrality on CPEC till the terms and conditions are disclosed, without
which one cannot arrive at an objective assessment of whether it could
be possibly beneficial for the country. Many economists have
questioned the CPEC project’s lack of transparency and accountability.
Secrecy and the lack of information have severely impeded a proper
cost-benefit analysis of the project. Moreover, there is no transparency
on issues such as cost efficiency, economic feasibility and viability.
Environmental concerns are likely to be ignored that could lead to
serious economic and environmental issues later on. Greater
transparency will lead to lesser suspicions and greater interest on the
part of local and foreign investors.
“CPEC agreement is sensitive and cannot be disclosed.”
Ahsan Iqbal.
Moreover, for Pakistan peace and stability in Afghanistan is in its best
interest as the success of economic corridor project of China and
Pakistan is greatly dependent on the peace and stability in Afghanistan.
Secretary Ministry of Defence Production Lieutenant General Syed
Mohammad Owais said that that the unrest in Afghanistan was
deliberate, adding Afghanistan is regarded as "the heart of South Asia"
and if there is peace in that country, there will be peace in the entire
region. Furthermore, the Porous border with Afghanistan has always
been a trouble for Pakistan. Terrorists often find sanctuaries in
Afghanistan by crossing Durand line region. Therefore Pakistan needs
to take Afghanistan into confidence and affective steps can be be taken
to manage border so that terrorists’ infiltration could be stopped inside
the country.
Subsequently, for CPEC to thrive, addressing grievances of provinces is
crucial. Balochistan National Party (BNP) chief Akhtar Mengal has called
the China-Pakistan Economic Corridor CPEC exploitative if it does not
equally benefit all the provinces, particularly Balochistan. Political
experts and economists have unanimously asked the federal
government to address the grievances and concerns of smaller
provinces regarding CPEC on a priority basis as delay might give room
to anti-state elements to exploit the situation to their advantage.
Consequently addressing concerns and grievances of all the provinces is
essential. Their reservations must be understood since they are some of
the greater challenges standing in the way for the implementation of
the highly-celebrated CPEC.
Lastly, peaceful Balochistan is very much important for the success of
CPEC. Balochistan, after a perturbed peace of almost three decades, is
constantly witnessing the violent insurgency. The province has been in
turmoil for the past several years. Under development of the province
had resulted in creating internal and external fault lines which were
further exploited by the dissident nationalists as well as external
powers. The Baloch nationalists are very much against to the
development of Gwadar Sea Port. Consequently, Government can
address the grievances of Balochistan residents
CPEC is the framework of regional connectivity which is a well thought
out framework that will escort great economic/trade activity in the
region and will reshape many economic policies in the coming years.
For Pakistan, it is a catalyst for change and for China, it is meant to
showcase its comprehensive economic reach to the regions for its
successful culmination of ‘One Belt, One Road’ policy.
Even though the project faces many challenges, which include, the
absence of rule of law, political instability, western interference in
domestic affairs, perpetual political instability, and lack of impartial
accountability institutions. However, the prospects it presents are also
massive which include, economic boost, energy transformation,
infrastructure development, employment generation, regional
connectivity and others. Moreover, coupled with these opportunities
Pakistan and China will get the maximum extract of this joint step of
China Pakistan economic corridor.

Challenges and Threats for Pakistan

Pakistan faces a lot of difficulties in the implementation of the CPEC
project: The challenges and threats are internal as well as external:

Political and economic challenges strategies

CPEC pose the greatest threat to at least one neighboring country in the
region, i.e. India. The United Arab Emirates is also concerned about
Gwadar competing with the established Dubai. Although India and Iran
have also initiated the new Iranian port of Chabahar project to counter
the Gawadar port, Iran is considerably relaxed and has suggested that
both Chahbahar and Gwadar will be complementing each other. India
invested the Chabahar port heavily, albeit remains still uncertain with
only two berths at Chahbahar, while Iran has already invited China and
Pakistan to participate as well. Chahbahar also aims to provide easy
access to the landlocked Afghanistan and Central Asia for energy
imports coming from the Gulf region as well as a passageway to
broader region. Pakistan political stability is pivotal to the success of
the CPEC. Political unrest is the main obstacle to the completion of the
CPEC. Pakistan has always faced political instability due to the various
issues like military intervention and tug of war between the different
political parties. The recent sit in 2014 for the election rigging has been
presented as backlash for the CPEC. The numerous small political
nationalist parties always play blame game and malign the sovereignty
of the country. The ultimate objective of all these blames game and a
negative statement from inside and outside is to leave the CPEC
unsuccessful. Anyway, there is a consensus realization among all the
political parties to cultivate the friendly relationship with China and
pledge to successful of CPEC.

Security issues

The most daunting task for the successful completion of the CPEC is the
security threat at internal and external level. Both these countries have
internal securities, and especially Pakistan is facing the brunt of the
extremism and terrorism. From Xinjiang to Gwadar consisting a group
of East Turkestan Islamic Movement (ETIM), Tehreek-e-Taliban (TTP),
Lashkar-e-Tayyiba, Lashkar-e-Jhangvi, (LeJ), Daesh (ISIS), Balochistan
Liberation Front (BLF) and the militant wings of some political parties.
All these parties are trying to stop the mega project of CPEC. The
international forces also in the region are active against the CPEC.
These forces continuously were assisting the militant groups and sub-
nationalist in all provinces to use the terrorist elements in the whole
country to threaten the CPEC project. They are involved in the
kidnapping and carried out attack on the installation of Chinese
companies associated with CPEC and killed many Chinese workers. To
ensure the security of the worker, Pakistan army has created a special
force for the CPEC security. The newly launched force, like Special
Security Division, will consist of nine army battalion and six wings of
parliamentary forces, the Rangers, and the Frontiers Force (FC) Corps.
The major security threats are also coming from Kunar and Nuristan
provinces of Afganistan, where a lot of terrorist groups including Al
Qaeda, the self-styled Islamic State, Tehreek-e-Taliban, the movement
of Islamic Uzbekistan and the Turkmenistan Islamic party, etc. are also
concentrated [20].

Tax and power tariff issues

China is unpleased to the concerns over issue of tax, power tariff and
electricity price with Pakistan along with the implementation process of
CPEC energy project in Pakistan. China has expressed serious
reservations over the hurdles and delaying tactics purportedly being
employed by the Federal Board of Revenue (FBR). According to the
agreements, under the CPEC, the imported equipment would be
exempt from sales tax and withholding tax. However, the approval
procedure from FBR is proving time-consuming, which is negatively
impacting on construction project timelines in Pakistan. The Chinese
authorities also point out that the decrease in tariff for renewable
energy will negatively impact of CPEC project, and they feel unpleased
with the situations. The Pakistani authorities reply that the energy bill
will not remain the same in future and will decrease the range of which
is related to the project [21].
Lack of quality of labor force

The adequate quality labor force is also challenged to maintain a high

degree of excellence and on time completion of the CPEC. The quality
of labor force can play a key role, which depends on training,
education, physique, and health, labor quality must be a count Pakistan
is the 10th largest country labor force wise but lacks the proper
development of the labor force. The United States of America, Japan,
France, Germany, and many other developed countries are
substantially investing in workers training; good education and labor
force are given credit for much of the growth in per-capita income and
economic productivity. In the end, author focus on the labor force
training, education, and other related skills will increase the guaranty
quality for the corridor [22].

Provincial Concerns
Balochistan issues

Balochistan is the largest province of Pakistan according to its area and

the smallest in terms of population. When measured against
socioeconomic standings of other provinces, Balochistan is the least
developed. Its society is still plagued with tribal structures. The
province is rich in resources, but the small and unskilled population due
to the negligence of authorities is a hindrance in utilizing those
resources to the maximum. The failure of provincial governments to
enhance the capacities of the population and its institutions has also
significantly contributed to under development of the province. PILDAT
Working Paper (2012) highlighted that Balochistan’s literacy rate stands
at 51.5% and requires serious attention. A thin rate of urbanization and
a high unemployment index of 20% have also caused a low annual
growth rate. Data suggests that Balochistan has had a flimsy growth
performance over the past decade and its GDP per capita is also the
lowest when compared to other provinces.

The militancy driven province of Balochistan poses a potential threat to

get the benefits from the CPEC project. Baluchistan is a conduit to
connect the deep water port of Gwadar with the city of Kashgar. The
dissent Balochs consider the CPEC project injustice to the people of
Baluchistan and deprivation to the local Balochs. The separatists carried
out attacks on gas pipelines, trains, and Chinese engineers were killed
to spread the terror to damage the project success. Their mission is to
keep Baloch nations deprived of the mega opportunities of CPEC. In the
article of Muhammad Ali Talpur, he said that CPEC project is only for
the China, he further explained that for the Baloch whose lives it would
destroy in the name of development.

Other nationalist leaders of Balochistan province are opposing the

CPEC, Brahamdagh Bugti, and the leader of the outlawed Balochs
Republican Party (BRP), strongly opposed the CPEC and Gawadar port
and demanded a referendum decide the future of Balochistan under
the auspicious of UN. These miscreants involved in the kidnapping and
killings of the Chinese worker's tankers carrying fuel to Chinese
company working on the mining project. They are trying to target the
management of a Chinese state-owned company [23].

Khyber pukhtoonkhwa issues

Some political leaders of Khyber Pukhtoonkhwa (KPK) also opposed to
CPEC which is a significant challenge for the mega multibillion dollars
project. The main problem of the opposition is changing being made in
the original plan of this corridor by the federal government which will
divert most of the economic benefit to Punjab only. The original route
which is western route would be followed by building a road from
Khunjerab to Gwadar via Mianwali, Dera Ismail Khan, Dera Ghazi Khan,
Khuzdar, and Turbat.

The KPK government and the political government are against changing
the original Gawadar-Kashgar route and demanded that government
should stop modifying the project, and also said that the changes would
divide on the issue [24].

The Sikandar Sherpao (Qaumi Watan Party Parliamentary Leader)

discussed the issue of change in the original plan of the project and says
it will be injustice for the peoples of KPK who have already been
affected due to the high rate of terrorism [25].

He also considers that the original route will connect the

underdeveloped areas of KPK, like Fata to the corridor and will
generate economic activities in the entire region but with an adaptation
of new alignment, these areas would remain ignored [26-28].

Some sub-nationalist parties in the provinces are also claiming there is

a change in the original routes by federal government plan and
facilitates the western parts and deprives the east of the mega project
of CPEC. Since all these allegations fail to meet the fact and the
government of Pakistan as well as Chinese government tried to allay
the fairs, by interacting with the political parties that are making the
allegations [20].

International Concerns
India

India is against with the development project, the government of India

trying to fail the project. India is worried about the huge investment of
China in Pakistan CPEC as well as Chinese help for Pakistan in producing
plutonium at the Chinese-built Kyushu reactor; as well as the eight
submarines sold by China to Pakistan worth approximately $5 billion,
which give a significant jump to Pak Navy’s sea capability. After the
completion of CPEC Pakistan will be the trade hub in the region after
Gwadar port starts functioning fully, and dutyfree economic zones are
set up. India considers the strategic partnership between the China and
Pakistan as a threat and on many occasion convinced China to drop the
CPEC idea. However, China has firm believed to stand with Pakistan and
complete the CPEC. India had also reservation on the handing over the
Gwadar port to China and financed the militant group to create the
chaos in Baluchistan which is rich in oil and gas resources. The Gwadar
port has been already in function, and there is no need of connection
between these two parts. Iran has a stake in the CPEC through a
proposal to link Iran-Pakistan gas pipeline with China as for a mutual
interest between the three countries [29].
Bangladesh

In the article of Javed on the of August 2016, he mentioned the concern

of Bangla leader, Minister of Information Hassan Ul Haq Anwar given
entirely vote to Indian Government Mr. Modi the interference of RAW
in Baluchistan and he further given interview to an Indian newspaper
that they condemn the Baluch tribe ignorance in the CPEC and support
the Modi that the Bangladesh government will soon announce the
Balcoh policy.

Benefits and Opportunities for Pakistan

Pakistan strategic location gives an immense importance in the region
and after completion of the CPEC, the importance will be enhanced
manifold in the field of the economic, commercial and geostrategic. It
will help in reducing the poverty, unemployment, and grievances of
inequities of the under developed province. It is viewed as the game
changer and a win-win situation in the whole region by generating
massive trade and economic activity and will open new vistas of
progress and prosperity for the peoples of both countries [30].

According to Sun Weidong the Ambassador of China in Pakistan, while

he is talking about the CPEC, the CPEC getting up of the energy,
transport, infrastructure and industrial projects under China-Pakistan
and it will be beneficial all the provinces of Pakistan. He further
asserted that CPEC is not limited to just a road, but it will connect with
numbers of motorways and infrastructure projects included Gwadar
port, the 2nd phase of the upgrading project of Karakoram highway,
motorway project between Lahore and Karachi, Thakot-Havelian
motorway, Gwadar port expressway, it will improve the situation of
energy, finance, commerce, banking, industry, and education [21].
Corridor has certain advantages which will take after the successful
completion of CPEC.

The project will help in mitigating the chronic energy crisis which has a
negative impact on the economy of Pakistan. The energy shortage
hampered the industrial production in the country, and business is
closing down, shifting to other countries. Pakistan industry needs an
uninterrupted energy supply for smooth economic growth. CPEC is the
central and ideal project which will help get the free country of the
energy crises while WAPDA and KESC have failed to tackle the problems
of the system of the state [31]. Chief Minister of Punjab (Pakistan) Mr,
Shahbaz Sharif said that China is extending the great economic
cooperation to Pakistan for resolving the energy crises, and some
projects with Chinese assistance would start producing electricity [27].

The projects based on the wind, solar, coal and hydro power generation
of 16,400 MW, as well as the transmission system and would be located
in the, varies provinces of Azad Kashmir, He further said China would be
setting up 10 projects of 6,600 MW in the Thar Desert that would
transform this remote and underdeveloped region into Pakistan’s
energy capital and open up economic opportunities and prosperity for
the people [32,33].

Infrastructure development
The road, ports, and highways is another great achievement of CPEC.
The project will improve the Pakistan's infrastructure connection with
all sub-regions in Asia, between Europe Asia and Africa step by step and
will finish all investment and trade barriers for the creation of a sound
business environment within the region and in all related countries
[34]. After the complementation of the project, Pakistan will become
modernized and will spread out the markets for the manufactured
product. The economic and employment growth rate will expand
automatically [33].

The CPEC and the construction period from 2014 to 2030 have
integrated relationship with the Chinese One Belt One Road, and an
extension of Chinese proposed 21st century Silk Road initiative. The
CPEC projects have been divided into three phases: the Short-term
project is estimated to be completed till 2017; a Mid-term project by
2025; Long term project 2030 [35].

Gawadar port

Development and handing over the management of Gawadar Port to

China and the announcement of the China-Pakistan Economic Corridor
(CPEC) are the major and significant reflection and exposition of the
strengthened bilateral economic ties between China and Pakistan as
well as potential and opportunities for Pakistan by the Chinese
Economic progress. Gawadar Port and the China-Pakistan Economic
Corridor establish the strategic scaffold for mutual realistic teamwork
among both countries. Gawadar is the tail of the Silk Belt which will
connect Kashgar through different and varies communication networks.
Gawadar is the leading place in the project of CPEC. Without Gawadar
port fully functional, it would be tough to the anticipated corridor as an
energy corridor that appears as one of its main objective behind the
construction of CPEC. Located near the Strait of Hormuz, which
channels about one-third of the world's oil trade, Gawadar could play a
key role in ensuring China's energy security as it provides a much
shorter route than the current 12,900 km route from the Persian Gulf
through the Strait of Malacca to China's eastern seaboard. The
Gawadar port will also put China and Pakistan in a strategically
beneficial position along with the Arabia Sea which is the present Indian
concerns that stem from “China’s involvement in nearby ports such as
Hambantota in Srilanka, Sittwe in Myanmar and Chittagong in
Bangladesh [36].

The Gwadar port as well as a storage and transshipment hub for the
Middle East and Central Asia oil and gas suppliers through a welldefined
corridor passing through Pakistan. The Gawadar post is paramount for
the operational control of the port which will enable China’s access to
the Indian Ocean, which is strategically important for China as it
expands its influence across the region. Gawadar port will be connected
with China’s western province of Xinjiang through rail and road links; it
is will reduce the distance to eastern seaboards are 3,500 km away
from the city of Kashgar in western China while the distance for
Kashgar to Gwadar port is only 1500 km.

Economic development
CPEC will help Pakistan in all aspects as well as in economic
development; it will expand the Pakistan’s foreign relations with the
neighboring countries. Finance Minister of Pakistan, Ishaq Dar said war
phobia could also be defeated through the economic corridor and
development. The Corridor is the prosperity for the peoples of Pakistan
[32].

CPEC and poverty

CPEC is the game changer project which eliminates and removes the
poverty in the entire region, the project is based on construction of
textile garment , industrial part project, dams and installation of
nuclear reactors and creating a network of roads, railway line which will
automatically generate employment and people's will also take
ownership of these projects, the projects will also facilitate the
education side, technical side, vocational training institutes, water
supply and distribution in undeveloped areas of Pakistan and will
improve the quality life of peoples [37].

CPEC, Peace, and Prosperity in provinces

CPEC is a mega project of billion dollars covering a multi aspect of the

economy and will have a positive impact and bring the stability and
prosperity in all region of Pakistan. The Chairman of Gwadar port
Dostain Khan Jamaldini said that the CPEC would not only improve the
economic situation of Balochistan, but this project is for all provinces of
Pakistan, Also Dr. Shahid Hassan said about the CPEC project it would
bring more prosperity to the whole country and will reduce the
unemployment ratio of Pakistan [28,38].

Conclusion
China-Pakistan Economic Corridor is the 54 billion US dollars under
long-term plan till 2030, which is also called the game-changer project.
It will improve the socio-economic and foreign policy situation in
Pakistan.

The CPEC has a lot of challenges and grievances of Baloch and KPK
provinces, which is the most terrible aspect of the CPEC project, which
party is the main who will seek out the complaints when and how?
Because the project must be completed before 2030 as mentioned in
MoU.

The CPEC project can be handed over under the supervision of Pakistan
Army because a lot of international nationalists tried to block the
corridor and raised the issue of Baloch grievances like India, Bangladesh
if the project is handed over to Pakistan Army, In my opinion, no
international issues can be raised as Pakistan Army is considered one of
the top army of the world.

The Pakistan Tehreek-e-Insaf party (PTI) and Pakistan Muslim League-

Nawaz party PML (N) is also the opposition parties in the current
situations they must think positive about what is best this time for
Pakistan.
The CPEC project must be go through the provincial government as
they the concerned Chief Minister better knows to control the
challenges and highlight the issues.

Special security force can be inducted in the name of CPEC FORCE; their
duty will be the protection of CPEC and associated workers of Pakistan
as well as China. The funded must be awarded from the CPEC project
on contract basis.

The CPEC project is a mega project and must be introduced to all

common peoples through social media, local television, local
newspapers for awareness their benefits.

For the project must provide latest technology.

Implementation of agreements should be addressed.

Pakistan should implement policies up to the mark.

Utilization of raw material and value added process should be done in

Pakistan.

Security Issues, law and order system are main obstacles in the way of
Pak-China economic Corridor.
Pakistan should develop the training centers and Chinese language
centers in order to make effective communication.

Tank-tank should collaborate by the both countries.

Pak-China relationship holds great importance in the world as per the

official message of both Presidents.