CPEC and its socio-economic Implications for the region and the

world

I. Introduction
II. CPEC: A game changer
(Initiative, OBOR, Gwadar port, investment, brief details of projects)
III. Positive Implications of CPEC
a. Socio Economic Implications for Pakistan:
i. Provide Employment opportunities
ii. Enhanced geostrategic position of Pakistan
iii. Improve living standard of people
iv. Improvement of Roads and Infrastructure
v. Development of backward areas
vi. overcome security challenges
b. Socio Economic Implications for China:
i. Provide shortest route for trade
ii. Best feasible option to develop Western China
iii. Less security prone route
iv. Emergence of China for global economic power
c. Regional Socio-economic Implications :
i. Enhancement of geographical linkages
ii. Increase People to people contact
iii. Improve security and peace with regional countries.
iv. Growth in flow of trade and business
d. Global Socio-economic implications of CPEC:
i. Shift of Unipolar to Bipolar world
ii. Counter balance to increase the role of USA
iii. US and India collaboration to counter China Influence
iv. QUAD Group (India, US, Australia, Japan) to counter China
IV. Negative Implications of CPEC
a. Increase debt burden on country
b. Sovereignty suffers
c. Competition of products increase
d. Trade war with US
e. Monopoly of wealth in few hands
f. Increase environmental issues
V. Way forward to enhance benefit from CPEC
a. For Regional benefits
i. Surety of accountability and transparency
ii. Need to improve bilateral relations between regional countries
iii. Remove terrorism to overcome hurdles in way of CPEC
iv.
b. For Global benefits
 i. Improve responsible role of superpowers
ii.
VI. Conclusion

Essay:
Pakistan is developing country; the CPEC is a great opportunity to enhance Pakistan economy. China-
Pakistan Economic Corridor (CPEC) is the major part of the One Belt One Road (OBOR) the pet
globalization project of President Xi Jinping with roots in the great ancient and medieval Silk Roads.
CPEC connects northwestern region of China with Pakistan’s Gwadar port on the Arabian Sea with a vast
network of Highways and railways. No doubt this project has many socio economic implications for
Pakistan. Islamabad get benefited in many sectors that include energy, communication, technology,
security, education, health and many employment opportunities. Along with these it will also help to
develop most underdeveloped regions of Pakistan like Baluchistan and KPK. Not only Pakistan but CPEC
has many implications for other regional countries. China itself get benefited most with this project as it
provide shortest route for trade that is less prone to security issues. CPEC helps to enhanced
geographical linkages between states and enhance trade opportunities. This project helps to improve
life style of people and increase people to people contacts. Globally this project shifts world order from
unipolar to bipolar by countering the influence of USA. As CPEC increase influence of China in region so
other states make groups to counter its influence. The implication of CPEC also has negative impacts on
the region and world. As it increase poverty with rise of monopoly. This also results in trade war with the
superpower of the world. This also increases the pollution that increases global warming. Although CPEC
has many positive impacts on countries but its negative impacts cannot be ignored. There is need to
overcome challenges and hurdles in the way to implement CPEC to get more benefits from it.

CPEC is a game changer project that benefited China but Pakistan as well as it brought sixty-four billion
dollars ventures in Pakistan.

Economic Corridor CPEC is one of the most important

developments of the ‘One Belt, One Road’ projects started by
China that aims to link the China with Europe and Africa making
the most important country in world economic affairs. CPEC
connects northwestern region of Xinjiang of China with Pakistan’s
Port of Gwadar on the Arabian Sea via a network of Highways,
Rail system (2,500 km road and rail Route) and Pipelines to
transport oil, gas and other resources. The investment of $46
billion by China Is not limited to roads and rail link but also on
other infrastructure projects which include development of
Gwadar port, a new international airport in Gwadar, and several
energy projects that will add around 10,400 MW in National
Power Grid.

Benefits to China:

CPEC brings unlimited benefits for China as when the structure of

the corridor will be completed, it will expand to more trade routes
between China, Middle East and Africa. As China is the biggest
energy consumer so oil transferring through pipelines from
Pakistan would reduce the transit time for china.

Middle East exports crude oil to china and this is being moved by
Sea covering 10,000 miles to reach China. After completing CPEC
Project it will be reduced to 2500 KM through Gwadar Port to
Kashgar.

CPEC will also provide China unparalleled reach to energy rich

markets of Central Asia and Afghanistan. These regions are
collectively perceived as the next big things in terms of energy and
natural resources. China is utilizing this for securing its energy
needs as well as having influence on the future energy sources as
now held by US over the gulf countries.
CPEC will also give economic benefits to flow to less developed
regions of western China containing Muslims majority city
Xinjiang and hopes to eliminate the unrest there.

CPEC will provide China an additional Sea Port opening to the

world and the capability to blockade the sea supplies to any future
opponents by having a port at Gwadar.

Benefits to Pakistan:

Pakistan today is starving for foreign investment in country

because of security situation. Foreign companies may set up
distribution networks to fulfill domestic demand after completion
of Gwadar Port.

After the successfully implementation on CPEC it will be a signal

for the world that Pakistan is truly open for business and its
inexpensive labor and fresh educated demographic is an
alternative to India, Bangladesh and South East Asia etc.

However, CPEC grantees a permanent Chinese existence in

Pakistan, it also assures Pakistan’s stability. Chinese investment in
Pakistan will make a strong China-Pakistan relationship which is a
good thing for stability of Pakistan and China will also not want a
destabilized Pakistan due to its interests in the region.
CPEC from all counts will prove a game changer and will make
China a backer in Pakistan’s stability and security. It is a win-win
situation for both countries. It will greatly expand the scope for the
sustainable and stable development of China’s economic
development.

CPEC and impact on Balochistan:

The Balochistan province is the largest province of Pakistan and

its importance lies in the concentration of natural resources.
Regardless of this, it has remained the underprivileged province in
country. The province is rich in natural resources, but the lesser
and unskilled population because of the negligence of concerned
authorities is a barrier in utilizing those resources. A low rate of
urbanization and a high rate of unemployment are the reason
behind low annual growth rate.

The development on Gwadar Port has been the most important

development in recent years. The port would be a game changer
for Balochistan, country and region as well. Gwadar would be an
economic hub and will contribute towards the progress of the
whole province, subsequent in addressing the several economic
and social problems of Balochistan and also would contribute
towards reducing unemployment in province. Micro and small
medium sized industries in province would also contribute
towards accomplishing greater benefits for the local residents.
There is a need to build a positive image of the China Pakistan
Economic Corridor through electronic and print media to remove
misconceptions of the locals. It is important for the Pakistani
government to make sure that people of Balochistan are fully
included in the development and are also given benefit.

Challenges to CPEC:

Despite its strategic importance both for Pakistan and China, the
CPEC is not without challenges. It is surrounded by Some regional
security and political challenges. Regional security situation could
be the severe issue to the project as it passes through some
security threatens areas especially Balochistan province and some
areas of FATA. Therefore, security of the whole region is a severe
concern for China and its interests in province of Balochistan.
Some political parties are raising up serious objections to the
CPEC project. Objections are being raised despite guarantees by
the federal government that this project will offer equal
opportunities to all the provinces in Country.

The greatest challenge comes for the CPEC is from competitors,

the most important is the Iranian port of Chabahar which is few
miles away from Gwadar. India has already started a counter move
by signing an agreement with Iran and Afghanistan to progress on
the Chabahar port. Chabahar port is already functioning with basic
infrastructure, whereas Gwadar port still a work in progress. The
development of the Gwadar port and the foreign investment will
be affected by the insurgence in Balochistan.
Conclusion:

Beside all the challenges and problems, CPEC is a very Critical

Infrastructure corridor for both China and Pakistan. The corridor
is a mutually beneficial development which fulfill the goals of both
countries. For China it offers an alternate route to import Energy
and find new markets for its goods to Middle East and Africa. For
Pakistan it supports to counter Indian influence in the region and
connect Eurasian region with South Asia and provide a much
needed base to start its economic growth.

Benefits for Afghanistan

Afghanistan’s security situation has been steadily declining since 2014, when a large
number of international forces began to withdraw from the country. The Taliban’s
resurgence, which coincided with the withdrawal of forces, has led to several large
scale attacks in the country. While the exact numbers are currently unclear, as
Afghanistan has yet to officially be invited to be a part of CPEC, joining may present
several benefits.
First, CPEC is predicted to bring industrialization and investment to Pakistan, the
carry-over effects of which will benefit neighboring Afghanistan. In fact, Pakistan has
already undertaken the building of several roads to improve connectivity between
the two countries. The 75 km Torkham-Jalalabad road is one of them, while the
Peshawar-Torkham road is another. While both these developments have faced
considerable completion challenges, they are a step toward increasing connectivity
with Pakistan, and in turn, gaining Afghan access to CPEC. In addition, Pakistan has
constructed two roads leading from D.I. Khan to Angoor Adda and Ghulam Khan,
linking with the Paktika and Khost provinces of Afghanistan respectively. These roads
will enable Afghan businesspeople and investors to access the enormous consumer
markets in South Asia, thereby increasing Afghanistan’s exports and reducing the
costs of imports.
Second, by becoming a part CPEC, and BRI in general, Afghanistan will have the
opportunity to stabilize its economy by enhancing its trade opportunities. In 2015,
over 70 percent of Afghanistan’s total exports were to Pakistan and India alone,
according to data from the UN Comtrade database. The main export goods were
carpets, rugs, dried fruit, and medicinal plants, and not the copper, iron ore, and
other valuable resources Afghanistan is known to possess in abundance. Accessing
the wider BRI network will thus provide two opportunities: first, access to markets in
China, Central Asia, and parts of Europe that Afghanistan doesn’t currently trade
extensively with and second, the chance to diversify Afghan trade products by
exporting copper, iron, and other resources to countries on the BRI.

Towards Trilateral Cooperation

China, Pakistan, and Afghanistan all stand to benefit from trilateral cooperation that
enhances security and stability, increases infrastructural development, and opens the
doors to economic development and connectivity. This can take the form of three
major areas:

Enhancing the security situation: Afghanistan’s security situation has to improve. It

neighbors can help either by furthering military aid or through direct involvement.
China has played a mediating role between the Taliban and Afghanistan, helping
orchestrate peace talks. Perhaps taking a stronger interest in getting the Taliban to the
negotiating table, while increasing military aid to Afghanistan, can go a long way in
helping Afghanistan strengthen its security status. In order for Afghanistan’s security
situation to improve, Pakistan also needs to bolster its efforts to reduce militancy
within its borders. Strong military offensives like 2014’s Operation Zarb-e-Azb in the
FATA are necessary to wipe out militant strongholds and prevent the movement of
Pakistan-based militants to Afghanistan and vice-versa.

Increasing connectivity: By connecting roads and motorways across borders to

Pakistan and China, Afghanistan can easily integrate into CPEC and be a part of the
trade and energy benefits that it provides. Such a proactive measure will only help
build more trust, and indicate that Afghanistan is truly committed to CPEC. There are
already some investments from Pakistan to build connecting roads, as mentioned
above. Afghanistan should focus its attention on finishing the stalled projects and
building confidence in the country’s ability to complete existing infrastructure
undertakings.

Opening up natural resources for foreign investment: China is keen on accessing

Afghanistan’s large reserves through its state-owned enterprises (SOE), and has the
monetary resources to invest in developing the infrastructure for procurement. As
such, Afghanistan should be open to such investments and operating deals, which will
benefit the country in the long run. In addition, such a move will bring forth much
needed foreign direct investment (FDI) to the cash-strapped country.

While China and Pakistan can play major roles in transforming Afghanistan, the
biggest contribution has to come from the country itself. The Afghanistan government
must take policy steps to facilitate smooth participation in CPEC and the BRI. While
the BRI is the Chinese government’s flagship foreign policy project, Afghanistan
cannot depend exclusively on potential Chinese investments. As such, it is up to the
government to take measures to develop the small-scale energy and transportation
industries that could easily fit into the CPEC structure once Afghanistan joins.
Further, the government has to create a favorable environment for investment. This
can be achieved by involving the private sector and increasing productivity by
optimization.

Afghanistan Finance Minister Eklil Ahmad Hakimi truly captured the importance of
the BRI for his country when he said, “China’s One Belt One Road (OBOR) project
could provide hope and opportunities for the war-torn Afghanistan.” However, in
order for the “hope and opportunities” to take shape, Afghanistan must cooperate with
Pakistan and China in order to make its inclusion into CPEC a reality.
China-Mongolia-Russia Economic Corridor (CMREC)

2. New Eurasian Land bridge (NELB)

3. The China-Central and West Asia Economic Corridor (CCWAEC)

4. China-Indo-china Peninsula economic corridor (CICPEC)

5. The Bangladesh-China-India-Myanmar Economic corridor (BCIMEC)

China Pakistan Economic Corridor (CPEC) is the flagship project of BRI. Asian Development Bank
reported CPEC would play key role to connect economic agents in China Pakistan, West Asia including
Middle East, and Africa in defined geography1 and will link the demand and supply forces of the market
2 . CPEC is the portfolio of projects including infrastructure, energy, fiber optics communication,
industrial cooperation, Gwadar port/city and Special Economic Zones (SEZs). Sounded loud as a “Game
Changer” and “Fate Changer” for the people of Pakistan, the mega initiative is being related with a
potential annual increase in GDP, employment, investment and reduction in poverty.

China-Pakistan Economic Corridor will contribute to a huge variety of sectors such as the
transportation infrastructure (through railways and fiber optic connections), trade and business
volume, investment opportunities, human resources, industry, agriculture, tourism, financial
cooperation, education, and health services.

With this project, China will make an annual profit of at least $10 billion by halving the
length of the Europe maritime route. Pakistan, for its part, is expected to make $5 billion
in highway revenues alone.

The intersection point of CPEC project is the Gwadar in Pakistan’s southwestern

Balochistan province and Chabahar Ports in southeastern Iran. They are also are known
as the "twin ports" located by the Gulf of Oman. The CPEC project -- which will
contribute to the development of China, Russia, Mongolia, and other Central Asia
countries by ensuring easy access to Strait of Hormuz-- emerges as an initiative that will
entirely change the global balance in the region

uestion: How do you view the U.S. attitude towards CPEC project?

Answer: The U.S. has never favored the project, it will not favor it in the future as well.
However, when you enter the international politics, you will always have friends and
foes.
 Both China and the U.S. have strong economies. The U.S. owns very powerful
equipment, with its own policies and methods. Despite having such a strong economy, it
cooperates and does business with China or even borrows from it.

For now, there is only one superpower in the world, and China is increasing its influence
and power against this single-pole powerhouse.

We, as regional countries, are striving for doing everything possible to ensure regional
trust and stability. But, they will not be able to achieve their goals due to the influence
of the global powers.

Pakistan: The socio-economic impact of CPEC

Long read

The China-Pakistan Economic Corridor (CPEC) is one of the dynamic projects

of the Belt and Road Initiative (BRI). This project was launched in 2015 after
the Chinese President, Xi Jinping signed some agreements with the Pakistani
Prime Minister, Nawaz Sharif. A total of 51 Agreements and Memorandums of
Understanding valued at an estimated $46 billion were signed by the duo. The
entire project which is a framework of regional connectivity will not only benefit
China and Pakistan but will also bring about positive impacts in countries such
as Afghanistan, India, Iran as well as the entire central Asia. The vision of
CPEC is to improve lives by building an economic corridor that promotes
bilateral connectivity and equally explores potential bilateral investment,
economic and trade. It is evident that the CPEC project has brought about
major progress since it was launched some seven years ago. According to the
Chinese Foreign Ministry, this project has brought about $25 billion of
investment from China alone. That said, the major overwhelming impact of the
CPEC includes the following:

1. Power and water supply

2. One of the major results of the CPEC is the fact that it has enhanced
power supply in Pakistan.  Many dams have actually been constructed to
enhance the country’s water storage capacity which is currently at just 11
million acre-feet (MAF). It is worthy to note that at the moment, Pakistan’s
storage capacity is lower than what is required and can only meet demands of
30 days during emergency situations. Moreover, there are shreds of evidence
that suggest that between the years 1980 and 2010, Pakistan lost about 1,049
MAF of water as a result of lack of the right storage capacity. This loss was
estimated to be an equivalent of 10 years of water withdrawal in the country.
3. Nevertheless, it is apparent that the construction of dams in Pakistan
also has multiplier effects. This assertion can be explained by the fact that
with the availability of these dams, there is also likely to be cheaper electricity
which can generated via a sustainable flow of water throughout the year. With
more electrical power, it can be used for food production as well as by
households and by industries.

2. Infrastructural development
3. According to Wang Wenbin, Spokesperson of the Chinese Foreign
Ministry, some of the projects completed under CPEC has resulted in
infrastructural advancement in Pakistan. For instance, its thanks to CPEC that
the Orange Line Metro Train (OLMT) in Lahore, Pakistan was completed. It is
worthy to note that this Metro Line is the first electric-powered public transport
project to be completed in Pakistan. The Orange Line actually went
operational last month, thereby marking the beginning of the subway era for
Pakistan.

3. Employment
4. There are also indications that the CPEC project has reduced
unemployment, especially in Pakistan. This assertion can be backed by the
fact that by enhancing infrastructure and electricity supply, CPEC has created
an estimated 70,000 direct positions, thereby also contributing about two
percent of Pakistan’s Growth Domestic Product (GDP). More so, the Gwadar
Port also fostered regional connectivity, thereby creating up to 1,000 jobs. It is
evident that the CPEC project has not only reduced unemployment in
Pakistan, but it has also created jobs in China. According to the Xinhua News
Agency, the Orange Line involves Chinese designs, construction, equipment
operation and maintenance. Therefore, this goes without saying that this
project has increased employment in China, both directly and indirectly.

4. Regional connectivity
5. Another major benefit of the CPEC is the fact that it has brought about
regional connectivity. Thanks to CPEC, a lot of work is ongoing at the Special
Economic Zones (SEZs), Gwadar Port and many social development
programs. It’s a matter of fact that transit trade through Gwadar is a major
step towards regional connectivity. Until recently, Afghanistan are now
importing food such as wheat, sugar, and other important items through the
Gwadar Port. As far back as early 2020, the Gwadar port had started shipping
cargo weighing as much as 20,000 tones to Afghanistan.
6. As for the SEZs, they are simply the key to achieving industrialization.
The CPEC project has not only led to the inauguration of many SEZs, but it
 has also led to the acceleration of work at different SEZs that are still under
creation.

5. Social development
6. The CPEC project has also brought about significant social
development in Pakistan. So far, China has invested an estimated $300
million on major projects in 2020 alone. Out of this sum, $100 million has been
diverted to improve the agricultural sector. A further $100 million has been
invested in sectors such as housing and healthcare in a bid to meet the basic
needs of the entire population.
7. Despite all the progress and advancements brought about by the CPEC
project, it is still imperative for the governments of both China and Pakistan to
stay focused to achieve all their ambitious objectives. There is already
criticism from environmental activists with dams and such matters that will
definitely be raised for public debates in the future. Besides the government, it
is also in the interest that all political parties in Pakistan and China to co-
operate to see that all the projects under CPEC come into fruition without
negativity.

Nevertheless, there have been recommendations put forward to help the

governments of Pakistan and China realize all the objectives of CPEC. First
and foremost, these governments are considering forming CPEC planning
and execution groups comprising of representatives of the different political
parties in the country. Such a group will definitely be efficient in steering
decision making and the implementation process. In Pakistan, there is already
the CPEC Authority overseeing some major projects.  Secondly, it is
imperative for the two governments to devise an effective engagement
strategy to counter all negative perceptions about the CPEC project. Above
all, these governments should invest in gathering real-time and verifiable data
that should be shared among stakeholders. By so doing, these stakeholders
will easily make recommendations based not only on facts but also on the
developmental needs of the country and its people.

Culturally there is hardly any similarity among any of these countries. Confucius China,
Sunni Pakistan, Shia Iran, CAR nations worried about Islamist and Buddhist Sri Lanka.

There are other groupings in the world, EU, NAFTA, SCO, ASEAN, BRICS etc. Most of
these are trade groupings. These grouping also discuss issues of mutual interest
including terrorism. China would make the new grouping to sound like part of CPEC.
Pakistan on the other hand would classify it as Enlarged and revitalized SAARC. The
Afghan envoy to Pakistan has made a statement indicating Afghan interest in CPEC.

Continued respectable growth rate of India indicates that Indian middle class would
continue to be an attractive market. With slowing of EU economies, Brexit, emerging
protectionism in USA, Chinese pragmatism can be made to win over Pak ideology.
Chinese have integrated CAR countries through transport system and pipelines.
Afghanistan has been hostile to Pakistan in no uncertain terms in the recent past. Taliban
continues to control large areas. Afghan national interests, having suffered Pak muddling in their
country, are best served by keeping its options open for both Gwadhar and Chabahar. Iran like
India has its own abiding interests in Afghanistan and would be loath to join Pakistan. It would
rather see Chabahar Port coming up than Gawadhar

South Asia1 is at a crossroads. Comprising Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan and Sri Lanka, it is home to around one-fourth of the world’s population

Connecting inland production hubs and manufacturing centres across South Asia is crucial for
enhancing regional trade.

On the other hand, Pakistan is pursuing alternate routes to connect with Central Asia, via
Tajikistan.19 Afghanistan and Pakistan are in talks with Tajikistan to extend their bilateral transit
trade agreement for connecting with Central Asia. Iran-Pakistan-India (IPI) gas pipeline project has
shrunk to Iran-Pakistan (IP) due to the US pressure and threat of sanctions on banks and
commercial entities doing business with the Iranian firms and state-owned enterprises.20
Washington, conversely, has supported Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas
pipeline project.21 Work on construction of Turkmenistan section of the pipeline commenced in
201522 and Afghan section in February 2018.23 The project is stated to be completed by 2020.24

India and Pakistan are competing in Afghanistan and for access to Central Asia. For Pakistan, the
prospect of India gaining a foothold in Afghanistan is a strategic challenge. Pakistan contends that
owing to its geographical and societal linkages with Afghanistan, the latter falls under its sphere of
influence
The NTC proposed transit and trade corridors with Pakistan neighbours. It included routes to China,
Afghanistan and the Central Asian states of Tajikistan, Turkmenistan, Kazakhstan, Iran and India