China-Pakistan Economic Corridor: Implications And Options

India’s push for International declaration of Pakistan as a terrorist state will add insult and pressure on Pakistan on terror but will not directly affect CPEC. India must highlight Pakistan links in each terror incident in the world. Belligerent anti-India Pakistan is like a great wall preventing India’s land route to Central and West Asia and in turn to Europe. In a way it also cuts off rest of South East Asia. If India had good relations with China, and Pakistan was not pushing terror, India would have liked to be part of some economic corridor. For China it would have been much cheaper and faster to have a corridor through Bangladesh-China-India-Myanmar (BCIM) to Pakistan instead of crossing the mighty Himalayas. It would have also given China better access to the much larger Indian and SE Asian markets.

India dithered on BCIM and lost a great opportunity. India’s greater economic integration with China would have also meant peace and security. Notwithstanding Chinese concerns about terror emanating from Pakistan, China now has no choice but to back Pakistan on Kashmir and other issues. Even today if India was to support the BCIM corridor in return for China reigning in Pakistan on terror, it could be a win-win situation for entire Asia. Afghanistan-Pakistan Transit Trade Agreement of 2010 allows Pakistan access to Central Asia. With a little nudge, Afghanistan will happily come on board and connect with the CPEC. Afghanistan needs access to India and beyond and has been pressing a better transit deal with Pakistan.

The US$ 150 million, Indo-Iranian project of developing Chabahar port in Iran to create another Gwadar like access to Central Asia through Iran will by-pass Pakistan. Pakistan is not happy with growing bilateral ties between its old rival India and old friend Iran, especially given the potential impact on CPEC. The Chabahar plan relies upon connections through the Afghanistan Ring Road which under current security environment and Taliban control is a far-fetched idea. In spite India offering to invest US$ 15 billion in Iran on road and other infrastructure, Iran has indicated interest in the much bigger and lucrative CPEC connect because of China as a market for their oil in return for cheap goods. If Afghanistan remains difficult for Pakistan they would use the Kashgar route to access Central Asian Republics (CAR). This approach finds support in CAR.

China’s economy is slowing down. USA and Europe are buying lesser. China desperately needs markets to sell to utilise surplus industrial capacities. It needs India. Many are questioning Pakistan’s capacity to service the huge Chinese debt it has taken for its projects. India could use China’s economic desperation to accelerate BCIM corridor. Once it is in place, China could one day ensure safe connectivity to CPEC. India must use its much larger Armed Forces to defend it from Pakistan supported terrorists. Come hard on intruders and internal separatists. Keep international pressure on Pakistan on human rights issues. Support Baloch, Sindhi and PoK movements so that Pakistan is under pressure and is forced to cut terror. India must review its ‘No First Use Nuclear Policy’ and declare that they will first use in case of Sino-Pak collusion. Wean USA away from Pakistan. Meanwhile, the Middle East is still in turmoil. The oil prices have crashed. Saudi and Iran are at war of dominance. Iraq and Syria are imploding. How things shape in this very uncertain environment, only time can tell.

Part One: here