Indus Pakistan
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Okay it's been some five years since the launch of CPEC so we can have audit of progress and see if it has lived upto it's expectations. My view is it has delivered some progress but failed to bring substantive change to Pakistan as I would have liked to seen.
Frankly I am disappointed. What could have been has been missed. CPEC offered the possibility to entirely rework the economy of Pakistan. Bring about a revolution in the way the country traded and opened new vistas. Most importantly it offered the possibility of the corrupt, rentier parasite economic linkages that have taken root in Pakistan and are choking competition. What is wrong with Pakistan's economy? everything as it stands. When a economy of 200 million people can only generate $20 billion exports and the country is forced to live on the ex-pat worker remittances of $22 billion it tells us about what type of industry and trading class we have in Pakistan. They are just rent seekers who do not add value but just export basic products. A good example is Pink Salt which as we know is mined and exported raw to India for it to be processed and sold as brand India with 10 times value addition.
The present rent seeking, mafia economy is established along the eastern corridor which runs from Peshawar-Lahore-Multan-Sukker-Karachi. Decades of investment dating even from the British era rail system has laid infrastructure along this corridor. Rail and roads all go along this corridor discharging into the only port Karachi. The entire economic and trading system of 200 million people is hinged on Karachi as it is the port there thatr interfaces with the global economy. You want to import a truck from Japan, a car from Germany, a industrial lathe from France, Swiss clock for any of the 200 million purchasers in Pakistan those products will land at Karachi port and then move along the transport infra of the eastern corridor.
On the other hand whether your a salt miner in Khewra, a Lap;is Lazuli exporter in Peshawar, a sports manufacturer in Sialkot, a tile maker in Multan your goods will travel along that transport infra of the eastern corridor to be exported at Karachi port.
So the entire trading order is lynched on Karachi pivoted on Karachi and geared towards minimum value addition and reliant on subsidies or monopolies. Competition is seen as sin. This is why despite everything Pakistani industry will continue to be feeble and fail to take off like Bangladesh has. The rent seekers will just make excuses come PTI, PPP, PML.
The infographic below sums up the lay of the eastern corridor. Karachi is vital and is the final point where a national level "bhatta tax" is inflicted by various vested interests in that city which tend to be either PPP or MQM controlled. The entire 1,000 mile corridor will be get stuck here unless some money is not exchanged.
CPEC however offered a tantalising possibility of breaking this entrenched rent seeking economic order thart has taken root over the decades with chockehold at Karach port that has the entire country hostage. As explained above the economic activity of 200 million people rests at the only port to the outside world.
How so? Gwadar. It offered the possibility of a new port. A possibility of a alternative that would break the chokehold of Karachi. It would offer a chance for a new economic corridor to open up. With it it would bring competition and finally some fresh vigour to the Pakistan economy. This would force change in the eastern corridor as monopoly would be broken with rise of Western economic corridor. Please refer to infographic below.
For this to work though it is not enough to build a Port at Gwadar. It also needs the Western corridor built that would mean motorways and railways running north to Quetta-DG-Khan-Islamabad-Peshawar with one spur going to Multan-Lahore. The Chinese role was crucial as it would require at least $25 billion to build up the required infra to link Gwadar with 200 million people of Pakistan along the Western Corridor.
Sadly and tragically this has not happened. Gwadar Port has been built up but the Western Corridor only exists on paper. Some roads are being built but these will never rival the rail and motorway infra of the Eastern Corridor. So all trade will by definition continue rolling along the established eastern corridor, The present monopolies will continue to function as they are.
Frankly Gwadar Port is like a beached Whale that is not going anywhere. Let us just think from the POV of a exporter in Sialkot. Do you think you will send your products by truck or rail to Karachi and then have them trucked another 200 miles along the Makran Highway to Gwadar? You would be pretty dumb to do that. As you could easily use Port Qasim or Port Karachi. Why would you add another 200 miles of road and all the costs and time that would imply. For sake of using Gwadar? That is ridicalous.
The other possibilty is use the Quetta-Gwadar route or the alignment of the Western Corridior. The problem is the roads are terrible and law/order is not ideal. Why not just use the excellant M2-M3-M4-M5 motorways to Karach Port? So I am afraid as long as the Western Corridor does not recieve at least $25 billion to build proper motorway followed by proper security Gwadar will remain a beached whale and a white elephant with some ships forced to land there just for photo-ops.
Why the Chinese have not continued with CPEC with the gusto they showed at the outset is another subject we need to look at. But as thing stand CPEC has failed to bring transformation to Pakistan's economy. It has however brought some short term benefits. But sadly not the revolution we all hoped it would bring in.
CPEC has stalled.
In short why would you do this and add almost 200 miles transport costs so you can shout "GWADAR"?
Frankly I am disappointed. What could have been has been missed. CPEC offered the possibility to entirely rework the economy of Pakistan. Bring about a revolution in the way the country traded and opened new vistas. Most importantly it offered the possibility of the corrupt, rentier parasite economic linkages that have taken root in Pakistan and are choking competition. What is wrong with Pakistan's economy? everything as it stands. When a economy of 200 million people can only generate $20 billion exports and the country is forced to live on the ex-pat worker remittances of $22 billion it tells us about what type of industry and trading class we have in Pakistan. They are just rent seekers who do not add value but just export basic products. A good example is Pink Salt which as we know is mined and exported raw to India for it to be processed and sold as brand India with 10 times value addition.
The present rent seeking, mafia economy is established along the eastern corridor which runs from Peshawar-Lahore-Multan-Sukker-Karachi. Decades of investment dating even from the British era rail system has laid infrastructure along this corridor. Rail and roads all go along this corridor discharging into the only port Karachi. The entire economic and trading system of 200 million people is hinged on Karachi as it is the port there thatr interfaces with the global economy. You want to import a truck from Japan, a car from Germany, a industrial lathe from France, Swiss clock for any of the 200 million purchasers in Pakistan those products will land at Karachi port and then move along the transport infra of the eastern corridor.
On the other hand whether your a salt miner in Khewra, a Lap;is Lazuli exporter in Peshawar, a sports manufacturer in Sialkot, a tile maker in Multan your goods will travel along that transport infra of the eastern corridor to be exported at Karachi port.
So the entire trading order is lynched on Karachi pivoted on Karachi and geared towards minimum value addition and reliant on subsidies or monopolies. Competition is seen as sin. This is why despite everything Pakistani industry will continue to be feeble and fail to take off like Bangladesh has. The rent seekers will just make excuses come PTI, PPP, PML.
The infographic below sums up the lay of the eastern corridor. Karachi is vital and is the final point where a national level "bhatta tax" is inflicted by various vested interests in that city which tend to be either PPP or MQM controlled. The entire 1,000 mile corridor will be get stuck here unless some money is not exchanged.
CPEC however offered a tantalising possibility of breaking this entrenched rent seeking economic order thart has taken root over the decades with chockehold at Karach port that has the entire country hostage. As explained above the economic activity of 200 million people rests at the only port to the outside world.
How so? Gwadar. It offered the possibility of a new port. A possibility of a alternative that would break the chokehold of Karachi. It would offer a chance for a new economic corridor to open up. With it it would bring competition and finally some fresh vigour to the Pakistan economy. This would force change in the eastern corridor as monopoly would be broken with rise of Western economic corridor. Please refer to infographic below.
For this to work though it is not enough to build a Port at Gwadar. It also needs the Western corridor built that would mean motorways and railways running north to Quetta-DG-Khan-Islamabad-Peshawar with one spur going to Multan-Lahore. The Chinese role was crucial as it would require at least $25 billion to build up the required infra to link Gwadar with 200 million people of Pakistan along the Western Corridor.
Sadly and tragically this has not happened. Gwadar Port has been built up but the Western Corridor only exists on paper. Some roads are being built but these will never rival the rail and motorway infra of the Eastern Corridor. So all trade will by definition continue rolling along the established eastern corridor, The present monopolies will continue to function as they are.
Frankly Gwadar Port is like a beached Whale that is not going anywhere. Let us just think from the POV of a exporter in Sialkot. Do you think you will send your products by truck or rail to Karachi and then have them trucked another 200 miles along the Makran Highway to Gwadar? You would be pretty dumb to do that. As you could easily use Port Qasim or Port Karachi. Why would you add another 200 miles of road and all the costs and time that would imply. For sake of using Gwadar? That is ridicalous.
The other possibilty is use the Quetta-Gwadar route or the alignment of the Western Corridior. The problem is the roads are terrible and law/order is not ideal. Why not just use the excellant M2-M3-M4-M5 motorways to Karach Port? So I am afraid as long as the Western Corridor does not recieve at least $25 billion to build proper motorway followed by proper security Gwadar will remain a beached whale and a white elephant with some ships forced to land there just for photo-ops.
Why the Chinese have not continued with CPEC with the gusto they showed at the outset is another subject we need to look at. But as thing stand CPEC has failed to bring transformation to Pakistan's economy. It has however brought some short term benefits. But sadly not the revolution we all hoped it would bring in.
CPEC has stalled.
In short why would you do this and add almost 200 miles transport costs so you can shout "GWADAR"?
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