Road to progress

Connectivity-driven regional development means opportunities for Pakistan 

Road to progress
Connectivity is an essential prerequisite for regional socio-economic development and the role of Pakistan can be of utmost importance in promoting development across South Asia and its neighboring regions.

Although Pakistan has done a lot in improving its internal transportability mainly through roads, it still needs to do a lot more to transform it into a regional and trans-regional trading hub. The recently proposed Pak-China Economic Corridor Project can prove to be a cornerstone in achieving this status for Pakistan.

The two south-Asian countries bordering Pakistan are India and Afghanistan. India is the second biggest economy after China among South-Asian, East-Asian and Southeast-Asian countries. China, being the biggest economy in the aforementioned regions, the second biggest economy in the world and enjoying a hearty relationship with Pakistan, is going to be significantly dependent on Pakistan through this economic corridor project.

It is very important to mention here that strategists in China have written a lot about the “Malacca Dilemma” with these straits being a natural choking point and need to find an alternative route. It is also important to say here that roughly 80% of China’s oil imports pass through these straits in the South China Sea and it is the only available maritime trading route for Chinese oil imports thus far.

[quote]China has been working on its Go-West Policy since 2000[/quote]

In a recently conducted study by Pradumna B Rana and Binod Karmachary as part of the Asian Development Bank Institute’s (ADBI) working paper series, the authors said that China is looking for three alternate routes for its oil imports. The first is the proposed PRC–Pakistan Economic Corridor passing through some of the highest and most landslide-prone mountains; the second one is the proposed Kunming–Lao PDR–Thailand Railway; and the third one are the pipelines with Central Asian countries and the Russian Federation.

Given the long lasting bonhomie between Pakistan and China, the extent of the latter’s investment which it has already made in Pakistan and an already existing Karakoram Highway; one may safely infer that the first option will be the top priority of the Chinese Government. Internally, China is also intensively working to implement its Go-West Policy since 2000 and it has heavily invested in infrastructure, mainly roads and power plants, to develop its inner provinces. A number of expressways have been constructed from the coastal cities of Shanghai and Beijing to the inner provinces. These include the Shanghai–Xi’an, Shanghai–Chongqing–Kunming, Shanghai–Kunming, and Beijing–Lhasa expressways.

This Go-West policy signals that China is really interested to access the Arabian Sea finally through Pakistan for its oil imports on which its thriving industry is heavily dependent. There is also a proposal of establishing Rail link between China and Pakistan through the planned Pakistan–China rail link project across the Karokoram mountain ranges.

Coming back to South-Asian Regional Trade, it is noteworthy here that Pakistan has not been able to reach to the markets of Bangladesh, Bhutan and Nepal through India. Given the critical nature of relationship between Pakistan and India, it is a big ask, because as of now, even the total trade between Pakistan and India is only $ 2.5 billion although they are neighbours and there are several road transport links available between these two countries.

Pakistan has not given the MFN status to India so far, but the recently started debut road trade in 137 agricultural items through Wagah-Attari border between Pakistan and India is an important breakthrough given the acrimonious history of relationship between the two countries. But, a lot more still needs to be done and more and more tariff lines may be allowed to be traded through this route. It is also important that the parleys are on as well to open up Munabao-Khokhrapar border and Hussaini Wala-Ganda Singh Wala border between the two nations. The Ganda Singh Wala village famous for its bamboo industry on Pakistan’s side has gained a huge economic importance after the construction of double road between Lahore and Kasur.

Internally, India has completed the Golden Quadrilateral Project, which improves connectivity between the four major nodal cities in the country—Delhi, Mumbai, Chennai, and Kolkata. Moreover, as a component of its “Look East” policy, India is actively promoting connectivity with Southeast Asia. If the mistrust between India and Pakistan can be done away with in the near or distant future and the quality of relationship in various spheres ameliorates, Pakistan can greatly bank on these infrastructural developments within India and tap the markets of Bangladesh, Bhutan and Nepal. Furthermore, Pakistan can also have an alternate trading route with Southeast Asia, which is already its major trading region.

Another important aspect to mention here is that not only Nepal becomes easily accessible through road if Pak-India trade links improve, but also Pakistan’s access to major Chinese inner cities of Kunming, Chengdu and Chongqing becomes a lot more accessible and a far less distant. For example the distance between Lahore to Delhi is 426kms and the distance between Delhi to Kunming via land and sea route is 10,345kms. This Delhi-Kunming distance will only be 2887kms, if India starts trading via land route through Nepal. Similarly, Delhi-Chongqing distance via land and sea route is 10,669kms and it will only be 3,151kms through Nepal. And Delhi-Chengdu distance via land and sea route is 10,437kms and it will only be 2,911kms through Nepal.

If we see towards Central Asia, the stability within Afghanistan significantly matters and once that is achieved and Pak-Afghan relationship improves, the Central Asian markets will also be open for Pakistani products.

So in this way, we see that South-Asia, East-Asia, Southeast-Asia and the Central Asia in general and Pakistan in particular can greatly be benefitted by these mutual endeavours and understandings.

The writer is a Section Officer in the
Ministry of Commerce