During his visit to Pakistan,
Chinese President, Xi Jinping agreed to invest USD 46 billion in the China
Pakistan Economic Corridor (CPEC), part of an ambitious surface connectivity
project named Silk Road. Named after the ancient caravan route, the larger project
envisages connecting Beijing with Rotterdam in the Netherlands. China also aims
to complement the land route with a maritime route connecting Venice to
Quanzhou, in Fujian province of China, on the shores of South China Sea. The link
extending into Pakistan seems to be an afterthought and an interesting one at
that.
China has a vision of its “peaceful
rise” while laying its hands on resources and markets around the world. This is
nothing surprising, it is the second largest economy and the most populous
country in the world. It needs resources and market access to sustain the pace
of development it has pulled off in the last couple of decades. With the
economy showing signs of cooling down, China has to spur consumption and shift
its focus from being an export driven economy. Moreover it has to find a useful
way to deal with the pile of foreign exchange it is sitting on (USD 4 trillion
at the end of 2014). Investing in infrastructure projects abroad is one such
use. Japan has done it the past and in the process helped Japanese companies to
enter new markets.
The proposed investment in
Pakistan should be seen in light of diminishing American presence in Asia,
warming of India – America relations and an ambitious China eager to make its
mark in international arena. The CPEC is a mix of transport and energy projects
stretching from Kashgar in Xingjian, China to Gwadar in Baluchistan, Pakistan. The
projects will help energy starved Pakistan and create jobs over the period of
implementation. More importantly the CPEC will provide China the access to
Straits of Hormuz, mitigating its dependence on the Straits of Malacca. Any blockade
in an event of war will have serious impact on its trade.
Meanwhile the Indian High Commissioner
to Pakistan, T.C.A. Raghavan has said, India is not worried by the Chinese
investment in CPEC. It would be interesting to know what the inner circle at
Ministry of External Affairs has to say. But the question one should ask India
is, “will the elephant move faster”? It moves but at a woefully slow pace. While
China has been extending its foot print in Africa, Europe and ASEAN, India has
done precious little to enhance its own presence.
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| Progress and prosperity. May be, may be not. |
Indian Affair has written on theIndia-ASEAN relationship and need to improve surface connectivity, in 2012,
while the commemorative India-ASEAN Summit was underway. The post from December
2012 can be re-read to the policy makers today without having change much. Prime
Minister Modi attended the 12th India-ASEAN Summit in Nay Pyi Taw
last November. He stressed a lot on the shared culture and heritage and the
urgency to implement the Free Trade Agreement (FTA) in services and a relook at
the FTA for goods. Same things that were discussed in 2012. He hardly had
anything to say on surface connectivity.
The India – Myanmar – Thailand trilateral
highway still exists only in files and the proposed rail link connecting India’s
north eastern states to Myanmar and Thailand have been almost forgotten
(despite many of the rail projects being termed “national projects”).
The 2010-11 annual report of
Indian Railways lists a total of twelve projects (seven of them “national
projects”) being undertaken to enhance connectivity in the region. The aim is
then to connect the Indian Railways network to that of Myanmar, Thailand and
eventually to Vietnam. Sadly the recent report for the year 2014-15 lists all
but one (Harmuti – Naharlagun, a 20 km section in Arunachal Pradesh) project as
incomplete. What is worse is that the 2010-11 report anticipated all twelve
projects to be completed by the year 2015-16, the latest report has not given
any fixed date for most of the projects. The total cost estimate for the twelve
projects is INR 33,016 crore (USD 5.1 billion). The amount spent so far is a
meagre INR 7,308 crore (USD 1.1 billion) or 22% of the total budget. So much
for the status of “national project”.
The newly inaugurated Integrated
Check Posts in Manipur, Meghalaya, Tripura and Mizoram, will not be of much use
as long as the surface connectivity remains poor. The road connectivity in the
region is poor and takes a long time to undulate around the Chicken’s Neck. The
time for India to act on its ASEAN trade and foreign relations policy is now.
China is already connecting its cities to ASEAN and is building artificial
islands to expand its territory. The choice with India is simple, let the
elephant move at its own pace or outpace the dragon.
