CPEC fears: It’s the (regional) economy, stupid

India is fully aware of Chinese projects in the region-that means it may be competitive about CPEC, not scuttle it

CPEC fears: It’s the (regional) economy, stupid
Pakistan touts the China-Pakistan Economic Corridor (CPEC) as a game changer. Perhaps it is. With American interest in the region, especially in Pakistan, dwindling and its economy still not able to shake structural problems, many within Pakistan consider China a messiah and saviour. CPEC is expected to bring the much-needed foreign direct investment into Pakistan, and augment the country’s energy and infrastructural projects. Undoubtedly for Pakistan, it is a mega project and for obvious reasons, it has pinned so much of its hope on the corridor. Who wouldn’t?

The $46 billion project is a landmark one for Pakistan. It is likely to help Pakistan in four important sectors. First, the Chinese have promised to invest in multiple energy projects as a part of CPEC. For the energy-starved Pakistan, CPEC should be an important milestone. Any improvement in its energy sector will automatically augment Pakistan’s economy, along with enhancing its FDI, which is the second important aspect of CPEC benefits.

Third, and more importantly, CPEC is likely to revolutionize Pakistan’s infrastructure—from Balochistan to Gilgit-Baltistan. Neither would Islamabad have succeeded in allocating adequate funding for the provinces, nor would Quetta and Peshawar have been able to mobilize enough financial support to enhance the infrastructural projects. Though the smaller provinces are apprehensive for different reasons, they are likely to accrue substantial benefits from CPEC, especially when it comes to infrastructure.

Finally, CPEC would provide the much-needed relief to convert Gwadar into a strategic port. Though there were multiple expectations with Gwadar earlier, it would never have reached its potential had it not been for CPEC. The corridor will not only make Gwadar an entry port, but also a strategic transit point for China to get goods through the Arabian Sea, cross Pakistan and enter Xinjiang. For Pakistan, Gwadar is no more one of its gateways on the Makran coast; it is likely to transform into a transit port, making substantial revenue in the process.
The "String of Pearls" theory is no more supported by the larger strategic community in India, except a minuscule section that believes in conspiracy theories of China using ports from Myanmar to Pakistan. There is a general awareness and even acceptance of Chinese projects in India's neighbourhood

Is India worried?

A section within Pakistan believes that India is worried and apprehensive of CPEC. This much is true, a section within India is indeed concerned about CPEC—but not for the reasons that Pakistan thinks.

India has long before gotten over with the idea of China encirclement. The “String of Pearls” theory is no more supported by the larger strategic community in India, except a minuscule section that believes in conspiracy theories of China using ports from Myanmar to Pakistan. There is a general awareness and even acceptance of Chinese projects in India’s neighbourhood. China is building multiple exit points into the Arabian Sea, the Bay of Bengal and the Indian Ocean as a part of its One Belt-One Road (OBOR) policy, and linking it backwards—starting from Xinjiang, Tibet, Yunnan, Sichuan and all the way east to Shanghai.

China’s investments in Myanmar’s infrastructure are well known as are Chinese interests in Sri Lanka in building a deep sea port in Hambantota and also the Colombo port city project. There have been reports of China building a rail link with Nepal across the Himalayas. Those who believe that India is afraid of Chinese infrastructure projects ignore the fact that India is part of the proposed BCIM Corridor involving Bangladesh, China, India and Myanmar, linking Kolkata with Kunming, cutting across Bangladesh, India’s northeast and Myanmar.

India’s bilateral relations with China have been improving, especially on the economic front. China is India’s largest trading partner and China’s trade volume with India in South Asia is unlikely to be challenged by any other country. Indian business houses have made substantial investments in China; the number of daily flights from different destinations in India (New Delhi, Kolkata, Mumbai and Bangalore) to different parts of China (Kunming, Beijing, Shanghai and Chengdu) has a different story to tell about the movement of people between the two countries. While the Chinese fried rice and momos all over the Indian cities are a well known phenomenon, South Indian restaurants selling masala dosas in Shanghai and Beijing will project the reverse food reach.

All this does not, however, mean that India officially welcomes the Chinese projects in its neighbourhood. New Delhi is apprehensive and in many places it is likely to compete with China to have its own footprint. For example, both in Africa and Southeast Asia, India is likely to compete with China?though Beijing is much ahead of India in terms of its reach and economic might in these regions, India would like to enhance its profile and presence.

Neither does all this activity mean that India is not worried about CPEC. A certain section fears that China is using Pakistan as a counterweight to growing India-US relations. These people (including this author) are worried about the political status of Gilgit-Baltistan, as a follow-up of CPEC activities. The debate on GB as a provincial province could not have emerged in a vacuum; perhaps there is Chinese pressure to grant GB legal status? At the official level, India’s objections to Chinese investments in GB pre-date CPEC excitement.

Will India scuttle CPEC?

The larger apprehension within Pakistan about India scuttling CPEC is unfounded. First, why should India want to scuttle CPEC, if it is willing to live with other Chinese projects in its neighbourhood in Myanmar, Nepal and Sri Lanka? It is entirely possible that a section within Pakistan is attempting to undermine genuine grievances against CPEC in the smaller provinces. The India bogey suits their argument and tries to anti-nationalise any real question posed by Balochistan and Khyber Pakhtunkhwa.

Second, India is not a banana republic, where institutions outside Parliament do not have a mind of their own. From the security forces to the intelligence institutions, they are answerable to Parliament through their ministries. It is impossible to fathom that the Indian intelligence establishment would be playing a game of its own.

Finally, the much-debated statement Narendra Modi made about Balochistan. It was a political statement made in a particular context. It was a tit-for-tat for Pakistan attempting to raise Kashmir at the international issue. If the majority in Pakistan wants to interpret it as India trying to subvert CPEC, that perhaps suits a section in India. Despite saner input, this is a dangerous game that both countries are likely to pursue.

Gwadar and Chabahar as complimentary ports?

Nepal could dream of road and rail networks crisscrossing into India to the ports of Kolkata and Mumbai from its southern border, and a similar one into Tibet and the rest of China. It may even become a reality, with Nepal becoming a transit state between its two big neighbours.

CPEC is less likely to branch out into Pakistan’s eastern and western neighbours. It is more likely to remain a north-south corridor linking Gwadar to the Khunjerab pass, than any perpendicular feeder routes into Iran, Afghanistan and India. Given the political equations of Pakistan with its eastern and western neighbourhood, this is likely to remain a potential project but remain on paper.

However, Gwadar and Chabahar could be pursued with a different perspective. Official statements from Iran have already hinted at developing them as complementary ports. Perhaps, it could be a starting point for a larger regional engagement, to be followed up by an India-Pakistan-Iran gas pipeline.

If one were to stretch the argument—won’t CPEC become the shortest and easiest land route from Wagah to Kashgar—that would be too much to ask for given the situation in the region. After all, we are not known for making rational economic choices, are we? Ask SAARC. Then count the volume of South Asian internal trade. And pinch yourself.

Dr D. Suba Chandran is a professor at the National Institute of Advanced Studies Bangalore