Page 2 of 2 China looks again at Gwadar and Pakistan
By Peter Lee
Hopefully, if privatized, it will also not be subject to the ruinous cost-plus guaranteed return provision for foreign-funded power stations that has saddled Pakistan with 50% of its generating capacity in plants that a) require imported oil that Pakistan can no longer afford to finance given its dismal foreign trade deficit and foreign exchange reserves situations and b) have no incentive to switch to cheaper sources of fuel, such as coal.
In addition to keeping Sharif's and China's heads above water in the matter of electricity generating equipment, China also generously offered support for the "Gwadar-Kashgar" corridor. In its most extravagant conception, the corridor will take the form of a high-quality road and rail link carrying goods and Gulf petroleum from the Gwadar port on the Indian Ocean through the Kunjerab
Pass in the Himalayans over to the classical Silk Road entrepot of Kashgar in the Xinjiang Autonomous Region in western China. Prime Minister Sharif referred to the corridor as "a game changer".
In an interesting example of the Internet's ability to amplify and propagate misinformation, it was widely reported that this project would involve the construction of a 200 kilometer tunnel; actually, as ILF, the European company that performed the feasibility study tells us, the entire project would include 100 tunnels with an aggregate length of 200 km; the longest would be 24 km. [3]
The corridor, though it also reeks of export promotion boondoggle, also has a significant and positive strategic component beyond the opportunity to tweak India (Gwadar port was financed and constructed by China, much to India's dismay; when the port - with no local manufacturing facilities and no inland links - failed to attract any cargo, the Singapore Port Authority terminated its management contract and China's China Overseas Port Holdings Limited picked it up, to India's vocal "string of pearls" horror).
Theoretically, Gwadar could serve as a transshipment point for Gulf oil destined for China if the Rakhine State pipeline project in Myanmar falls victim to anti-Chinese political populism - although the technical, economic, and security issues involved in trying to send trainloads of crude oil over the Himalayas to western China are, to say the least, non-trivial.
However, there are more immediate and practical advantages relating to the corridor.
The Chinese government has a Uyghur problem in the western region of Xinjiang, which manifests itself as discontent and resentment, with an alarming potential for separatism and terrorism as illustrated by the recent bloody eruption that claimed 35 lives. It appears that China would like to recapitulate its Tibet policy - stern repression and erosion of local identity under a Han economic onslaught - in Xinjiang.
A meaningful economic corridor between Kashgar and an invigorated Pakistan might mean that the Karakorum Highway would transport a steady two-way stream of goods and sober, avaricious businesspeople in addition to the destabilizing flow of militants, drugs, and HIV it allegedly brings into Xinjiang. A prosperous chain of towns and factories along the corridor would also give Pakistan greater resources and capabilities to crack down on Uyghur separatists training and operating in Pakistan (whom Sharif denounced in Beijing as the ETIM, the purportedly mythical - according to Xinjiang political activists - but quite possibly genuine East Turkestan Independence Movement).
As for Pakistan, it is anything but a favored investment destination at the moment and, under Sharif, would welcome the opportunity to receive investment from China, be it for strategic, security, or economic motives.
In Beijing, a fiber optic link following the Karakorum Highway out of China to Rawalpindi for $40 million will probably be built quickly, as will probably a significant improvement of the highway itself. The $18 billion rail link over the roof of the world (actually, through the roof of the world with those 200 km of tunnels) will probably come later, if at all; the time window in the Memorandum of Understanding is five years.
As for the extension of the corridor from central Pakistan down to the white elephant port of Gwadar, that will presumably depend on whether the Sharif administration can bring an end to the brutal, death-squad driven central government reign over Balochistan.
Sharif is anxious for reconciliation with Pakistan's many antagonists - the Balochis, the Pakistan Taliban, even India and Afghanistan - on terms that armchair Churchills inside and outside Pakistan will probably condemn as appeasement. However, if there is to be any hope that the complete corridor from Gwadar to Kashgar will become a reality, Pakistan will probably have to move beyond the detested suppression of local dissent in Balochistan by Pashtun's military and security services to an economically driven policy of engagement, economic development, and generous royalty payments and profit sharing with Balochi interests.
That is a tall order for an impoverished and incompetent civilian government whose control of its security and military apparatus is more notional and aspirational than actual. However, China - which has already experienced kidnappings and assassinations of its Gwadar personnel by Balochi militants - is unlikely to be party to an Afghan ISAF style counterinsurgency action in Balochistan, especially if conducted under the auspices of the Pakistani military. If Sharif is able to advance an accommodating policy in Balochistan, China can help by investing in economic activity in and around Gwadar that Balochis may come to regard as opportunities for employment and investment, rather than attack and/or extortion.
Similar flexibility - and Chinese support and buy-in - will probably be necessary to solve Pakistan's Pashtun problem. Historically, Pakistan would like to see its Pashtun problem become its Afghan opportunity, by encouraging militant Pashtuns - especially the irritating and aggressive Pakistani Taliban - to seek suitable arenas for their ambitions on the other side of the Durand Line, in the plains of Kandahar rather than in the mountains of Pakhtunkhwa.
Sharif - and China - are no exceptions. Recently the Sharif government elicited howls of indignation from Hamid Karzai's government in Kabul for allegedly raising the possibility of Afghan "federalism" - actually ceding the government apparatus in certain ethnically-Pashtun provinces of Afghanistan to the Taliban. Karzai's anger was probably accentuated by the suspicion that the United States - which is preparing to depart Afghanistan in 2014 and appeared quite happy to bypass Karzai's government and negotiate directly with a newly established Taliban office in Qatar - shares Pakistan's feelings.
The sense that Afghanistan is in play and Karzai's government is on the sidelines was reinforced by the appearance of Afghanistan's other bloody-minded Pashtun warlord, Gulbuddin Hekmatyar, who enjoys the distinction of being the first non-9/11 related troublemaker to be targeted (unsuccessfully) for assassination by a US Predator drone back in 2002 - in a video interview with Britain's The Telegraph newspaper.
Hekmatyar called Britain's Prince Harry, currently serving in Afghanistan, a drunken "jackal" and sternly insisted that the US and UK leave his country, but threw the West the obligatory bone by declaring his support for female education (in separate facilities of course) to distinguish himself from the school-destroying and schoolgirl-shooting brutality of the Taliban.
Considering that back in the 1980s Hekmatyar reportedly carried a vial of acid around Kabul University to throw into the faces of co-eds he considered to be immodestly dressed, his commitment to women's education may be less than his desire to garner covert Western (and Chinese and Pakistani) support in the Pashtun civil war between his forces and the Taliban that will probably erupt after NATO draws down. [4]
China has allegedly remained in continual communication with Hekmatyar (whom it supplied with massive amounts of ammunition and weapons on behalf of the CIA when he was the leading figure in the anti-Soviet mujihadeen resistance), and is also apparently in communication with the Quetta Shura and Taliban leader Mullah Omar. [5]
Now that the pro-US/War on Terror policies of Asif Zardari have been sidelined, both Sharif and China would welcome a deal with the Taliban that would stop the politically polarizing (and retaliation-provoking) drone strikes on Taliban leaders inside Pakistan.
If the People's Republic of China, through Pakistan, can come to an understanding with both Hekmatyar and the Afghan Taliban to respect Chinese interests, including investments in copper and energy exploitation in Afghanistan, there may be beneficial knock-on effects - like peace and prosperity - in Afghanistan, Xinjiang, and western Pakistan.
Peace and prosperity don't come cheap, but neither is the alternative.
It is an interesting comment on the competing Chinese and American attitudes toward regional development and security that China is talking about spending $18 billion to create a zone of trade and prosperity linking Pakistan and China and that is, understandably, regarded as an enormous investment.
However, the total cost to the United States of the Afghan war is expected to exceed $2 trillion - for 10 years of invasion, counterinsurgency, and nation-building that will arguably leave Afghanistan little better than it was in 2001. Maybe Sharif and Li Keqiang can do better.
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