Will this New Route Improve Pakistan and China’s Economy?

Experts, government officials and locals have high hopes for a new Pakistan-China Economic Corridor to bring prosperity and security to the region.

china-pakistan coridorGilgit-Baltistan/Islamabad — A 40-year old local trader Muhammad Ali Rocky was extremely tired but he still had to cover a long distance in a boat towards his hometown through the artificially formed Attabad Lake carrying China-made electronic goods, some 144 km from Gilgit, capital of Gilgit-Baltistan.

On his way back to his homeland Gilgit, he purchases some accessories from China to sell them out in Pakistan. He is afraid of rowing in Attabad Lake because the traders have faced problems due to closure of trade posts in northern areas.

Muhammad had a fear whether he would be lucky enough to cross the Attabad Lake safely or would have to face a loss. He was recalling the past days when Silk Road, also named Karakoram Highway (KKH), was smooth before massive landslide in January 2010 blocked Hunza River.

Watch: The Karakoram Highway – from China to Pakistan

After a safe journey on ferry service with smiling face, he thanked God, the almighty. While shifting goods from boat to tractor trolley he said that the 20 km long Silk Road, the sole overland connection between China and Pakistan, was submerged by lake. It is because of that catastrophe, cross-border trade between the two countries has declined with the state of local business lying in ruins.

According to a 2013 World Bank report, some 60 percent of Pakistan’s population is living below the poverty line. Poverty stems from limited job opportunities and low foreign investment, along with weak security.

China also suffers from poverty despite enormous economic progress. Approximately 20 percent of the population live under the poverty line, and about 40 percent of China’s poor live in its seven autonomous regions and provinces.

Muhammad Ali Rocky said, “The business community of the area is under heavy debt, the Sust Dry Port, which used to generate income from taxes, custom duties and other charges, is now on the verge of terminal decline and blockage of KKH has rendered hundreds of small traders and workers jobless.”

According to Gilgit-Urumqi Business Forum President Nazir Ahmed, the situation has turned from bad to worse. Therefore he has demanded that the government introduce tax concessions for the business community of Gilgit-Baltistan because local traders are affected by the formation of Attabad Lake on KKH, blocking trade activity between Pakistan and China.

Gilgit-based Ahmed said that the business community had suffered heavily due to the lake. “Since this trade route was only bread and butter for local businessmen, its blockage has left hundreds of small traders, peasants and workers jobless.” He added that the government has not taken measures to provide any kind of relief to the small traders and peasants.

A study on “A Socio-Political study of Gilgit-Baltistan” conducted by Omar Farooq Zain stated that northern areas are geo-strategic as well as trade because of its borders with China, Afghanistan and India. As a potential gateway to Central Asia, the northern area location becomes unique.

In addition to the trading importance of Gilgit-Baltistan and its environs, its site at the doorstep of China and Central Asia, with Afghanistan and India close by, makes it a very important cultural region.

READ  Indo-Pakistan Relations: One Step Forward, Two Steps Back

K. Warikoo in his book Himalayan Studies in India pointed out that the British used Ladakh and adjoining areas in Gilgit, Skardu, Hunza and Chitral as “frontier listening posts” to check the developments in Central Asia and Xinjiang throughout the Dogra period.

The leadership of both Pakistan and China in the recent past had thought it advisable to build up an economic corridor that can open up the underdeveloped areas of the region to a new era of economic development and prosperity.

The elites of both countries have termed Pakistan-China Economic Corridor as “future of the world,” as almost 3 billion people, which is almost half of the world’s population, from China, South Asia, Central Asia could benefit from this economic corridor.

The official data provided by Pakistan’s Federal Ministry of Planning and Development showed that being one of the biggest transit trade routes in the world, it would link China to the Middle East, Central Asia, Africa and other regions and give access to the landlocked countries to the world biggest markets, India and China.

It stated that the Pakistan-China Economic Corridor would be of high economic value as about the 3 billion people at both sides of the border would be its direct beneficiary while the overall bilateral trade volume would be increased to 7 billion dollars.

The data further showed that Pakistan intends to get the greatest benefit out of this project and for that it has planned to establish industrial parks and economic zones along the Kashgar-Gwadar trade corridor.

Pakistan’s central government’s seriousness to get maximum benefits from the Pakistan-China Economic Corridor can be judged with the fact that it has already approved the projects worth 52 billion to be started in the economic zones.

Dr. Zafar Mehmod, a prominent economist, opined that the poverty rate would be reduced to the minimum while the unemployment would almost come to an end.

Talking about the economic corridor, Javed Shahzad Malik, the high official of Ministry of Kashmir Affairs and Gilgit-Baltistan, said the dream of building up economic corridor is being translated into reality and work is under way to upgrade KKH, motorways, and railway lines, fiber optic, and oil and gas pipe lines.

He said a number of tunnels with overall length of 200 km would be constructed on different locations to maintain the vehicular speed on KKH at 80 km per hour.

Speaking with a Kabul-based Journalist, writer and political activist who worked as an advisor in the Hamid Karzai government, Azam Beg Tajik hoped that such a trade route would become a profitable hub and economic activity center, serving as a lifeline to the economy of the country in the near future.

Given the future economic prospects highlighted by the experts, government officials and local people, it is expected the Pakistan-China Economic Corridor would not only help boost economic activities but also bring the socioeconomic conditions and living standard in this region at par with other developed regions of the world.

Tayyab Baloch is an Islamabad-based multimedia journalist. He tweets at @blochjournalist.