Development Road, what is the CPEC project? (Part-2)

My article titled Development Road Project consists of two main parts. In the first part, I explained the Development Road Project and in the second part, I will explain the "China-Pakistan Economic Corridor" (CPEC) project related to the Development Road Project.

What is the CPEC project?

The China-Pakistan Economic Corridor (CPEC), announced as the most important step of the ambitious Belt and Road initiative launched by Chinese President Xi Jingping in 2014, will be implemented as a large-scale project covering energy, infrastructure and communication systems. The project is expected to make great contributions to Pakistan's economic development. It is stated that CPEC, designed by Chinese President Jingping, is the most important pillar of the Belt and Road initiative (BRI), which aims to develop road and railway networks in Southeast Asia, South Asia and Europe.

Designed to be multifaceted, CPEC consists of a series of projects related to energy, transport infrastructure and economic free zones. With an initial investment budget estimated at USD 46 billion, the project mainly aims to develop and strengthen Pakistan's existing transport infrastructure and energy sector. Thus, it is planned to solve the country's chronic energy problem and to create the necessary resources to meet both current and future energy needs. After the completion of energy and infrastructure projects, it is envisaged to start the construction of special economic zones.

With CPEC, the strategically important city of Kashgar in China's Xinjiang province is planned to be connected to the Gwadar Port in Pakistan's Balochistan province; thus, the movement of goods and services produced between China and Pakistan is planned to be uninterrupted. Moreover, considering the proximity of Gwadar to the Arabian Sea, this route will also facilitate China's access to the Middle East.

In 2015, with the development and leasing of Pakistan's Gwadar Port by China, the geopolitical importance of Iraq has increased even more. Because Chinese goods reaching Gwadar will be able to reach Europe in a short time with much lower costs through the Development Road Project instead of travelling to Europe by sea through the Suez Canal.

The "China-Pakistan Economic Corridor" (CPEC) project, which aims to connect the Xinjiang Uyghur Autonomous Region in northwest China to the Arabian Sea through the ports of Gwadar and Karachi by travelling through Pakistan in a northeast-southwest direction, is at the heart of the Belt and Road Initiative.

CPEC Components

Energy Sector: The most important pillar of the CPEC project is Pakistan's investments in the energy sector. A total of 33 billion dollars (approximately 72%) of the 46 billion dollars of investment envisaged under the project is allocated to sectors related to the development of energy resources (such as gas and electricity generation from natural resources such as coal). This shows that CPEC is primarily aimed at addressing the shortcomings in Pakistan's energy sector.

Transport Infrastructure: The second important pillar of CPEC involves the development of transport networks. With the project, an investment of USD 11 billion is planned to strengthen Pakistan's transport infrastructure, including road and railway networks.

Gwadar Port: The Gwadar Port project, which will provide Pakistan with an important industrial base, is one of the most important pillars of both CPEC and the Belt and Road initiative. The port will serve as a base that will facilitate the export of Chinese goods to the Middle East and Africa in a shorter time, as well as the import of oil and gas from the Middle East.

Special Economic Zones: Under CPEC, special economic zones are planned to be established to facilitate trade and implement market-oriented policies supported by the government. It is aimed to ensure that local and international investors invest in the region by providing facilities such as energy, infrastructure and tax incentives to these regions.

Fibre Optic Communication: Within the scope of CPEC, it is planned to increase investments in the development of fibre optic communication opportunities. In this context, Huawei, one of China's multinational companies, installed an 820-kilometre (510-mile) fibre optic line from Kashgar to Islamabad in January 2019 with an investment of $44 million. This direct cross-border line is an extremely important investment for Pakistan. In addition, a project sponsored by Huawei aims to establish "smart cities" and create advanced surveillance and data collection capabilities.

Geostrategic Implications of CPEC

As mentioned above, CPEC, which is the most important pillar of the Belt and Road initiative, is at first glance seen as a project focussed on connectivity and infrastructure, but in fact it is also a project with very important geopolitical and geostrategic objectives. The US, closely following China's moves, announced its Asia-Pacific policy during Barack Obama's presidency as a countermeasure to integrate its economy with that of its allies in the Asia-Pacific region, and subsequently signed the Trans-Pacific Partnership Agreement (TPP). The agreement was intended to further strengthen the regional partnership in the future. However, with the presidency of Donald Trump, this project suffered a major setback, with Trump declaring on his first day in office that the TPP harmed America's national interests. The isolationist policies pursued by the Trump administration have encouraged Beijing to further accelerate its ambitions to come to the forefront of global politics.

On the other hand, India, one of the most important countries in the region, has expressed its disapproval of both the Belt and Road and CPEC since their inception and has criticised these projects at every opportunity. The Indian government, arguing that the Belt and Road initiative has deep goals that are carried out in secrecy, states that a transparent mechanism should be established in the advancement of connectivity and infrastructure projects carried out with the agreements reached between countries within the scope of the initiative.

The most important problem raised by India is that the governments of the countries where the projects related to the Belt and Road initiative, which is essentially led by China, have almost no say in the decision-making process or very little of their criticisms are taken into account, and they are forced to participate in the project as a virtually obedient nation.

The Indian government also claims that the CPEC passes through the Jammu and Kashmir region. Internationally recognised Jammu and Kashmir is a disputed territory administered by Pakistan but claimed by India as its own. The summer 2020 border clashes between China and India in the Himalayas are believed to have erupted in response to China's reaction to India's decision to unilaterally change the status of Jammu and Kashmir. However, this decision, which was strongly opposed by the Beijing administration, and the protests were not enough to force India to take a step back. India's refusal to participate in the Belt and Road initiative and its hostile attitude towards itself in general and CPEC in particular may lead China to pursue a more aggressive policy in the border region in the coming period.

This escalation of tension on the line of control in Ladakh after 50 years could have devastating consequences. Tensions between India and Pakistan have already been high since the airstrikes in 2019, for which India blamed Pakistan.

After the CPEC agreement between China and Pakistan, military cooperation between the two countries has also increased. In particular, frequent joint exercises on the latest developments in Kashmir and the replacement of the Pakistani military communication system, including GPS, with the Chinese satellite system show that military cooperation between China and Pakistan has also improved.

Gilgit-Baltistan and Kashmir

India also strongly opposes the inclusion of the Gilgit-Baltistan region in CPEC on the grounds that it is a disputed territory. It is stated that China persuaded Pakistan to change the constitutional status of Gilgit-Baltistan, but the Islamabad administration refrained from changing the status until recently because it would weaken its position on the Kashmir issue.

Gilgit-Baltistan, which is also a disputed territory according to the Pakistani Constitution, does not have the status of an official province. However, in August 2019, India changed the status of Jammu and Kashmir, which led Pakistan to decide to change the status of Gilgit-Baltistan.

However, a permanent change in the status of any part of the disputed territory is a violation of United Nations resolutions; therefore, it can be predicted that the policies to be followed by the parties in the coming period will also affect the Kashmir issue.

Pakistan's Minister for Planning, Development and Special Initiatives Ahsan Iqbal has stated that new projects under the China-Pakistan Economic Corridor (CPEC) focus on job creation, innovation, green energy and inclusive regional development.

ISLAMABAD, March 14 (Xinhua) -- Pakistan's Minister for Planning, Development and Special Initiatives Ahsan Iqbal has said that the country is accelerating efforts to open five economic corridors under the China-Pakistan Economic Corridor (CPEC) for national growth.

Chairing a review meeting on CPEC projects, the minister said the initiative includes economic corridors focused on job creation, innovation, green energy and inclusive regional development. Stating that after the successful completion of the first phase of CPEC, the stakeholders should coordinate with the relevant ministries without delay for the speedy implementation of the projects under the second phase, Iqbal underlined that there would be no more hurdles in the implementation of CPEC agreements.

A section of the Chinese-built Suki Kinari hydroelectric power plant in Mansehra district of Pakistan's Khyber Pahtunhwa province, 28 February 2024.

The Gwadar port is of great importance for the Beijing administration, as the rapprochement of the countries on China's trade routes with the Middle East, Africa and Europe with the United States could jeopardise China's economic route in the long term. According to 2009 data, China imports half of its oil needs and the danger of the closure (against China) of the Strait of Malacca, which is an important point of China's maritime trade and through which China exports 80 per cent of its oil, will benefit the Gwadar Port to function as both a profitable and strategic economic base for the Beijing administration.

A total investment of 46 billion dollars has been made for the 3,000-kilometre China-Pakistan Economic Corridor (CPEC) starting from Kashgar and ending at Gwadar, and a special force of 12,000 special commandos and paramilitary forces has been established within the Pakistani army to protect the CPEC,

Challenges for the Development Path

The Development Road project and the China-Pakistan Economic Corridor (CPEC) commercial viability is only part of the equation. Security challenges arising from conflicts fuelled by terrorist groups and various proxies pose a risk to the feasibility and sustainability of the project. There is already a joint fight between Iraqi security forces and Turkish forces against various terrorist groups, including the PKK and Daesh. Baghdad needs to do more and expand its co-operation with Ankara to eliminate PKK terrorist elements operating in northern Iraq along the Turkish-Iraqi border.

Another important factor that could influence the Development Path is Iran's behaviour. Tehran was invited to the conference organised in Baghdad. However, the project may not coincide with Iran's regional objectives. If the Greater Faw Port becomes the largest port in the Middle East, it could rival Iran's ports in the Persian Gulf. Moreover, Iraq's direct connection to European markets through Turkey could weaken Iran's tutelage over the Iraqi government.

On the other hand, Iran is currently subject to extensive Western sanctions. Therefore, concerns that Iranian ports will suffer from competition may not be of much importance. However, a possible scenario is that things could change with the resumption of the Joint Comprehensive Plan of Action (JCPOA). Ultimately, the Development Pathway could position Iran as an energy supplier to European markets.

One of the most important aspects of the future of the Development Road is the possible impact of the IMEC project, for which a Memorandum of Understanding was signed by the United States of America (USA), India, Saudi Arabia, the United Arab Emirates (UAE), the European Union (EU), Italy, Germany and France during the G20 Leaders Summit in New Delhi.

IMEC Project

The IMEC Project, one of India's most ambitious initiatives, was launched to bring like-minded countries together with common interests. Designed as an economic corridor, IMEC aims to promote trade and economic growth by improving connectivity and economic integration across Asia, the Persian Gulf and Europe. However, its feasibility and practicality are still largely uncertain.

Rather than a simple corridor, IMEC appears to be a Eurasian-Asian co-operation aimed at countering China's far-reaching initiatives such as BRI and CPEC on a global scale. Security alliances such as QUAD and AUKUS have previously been proposed in the Asia-Pacific and Indo-Pacific region to counter China's advances. However, these initiatives of the US-led West and India-led Global South seem to be in a transitional phase.

Moreover, with regard to the current concept of the IMEC Project, which envisages the first 1600-1800 kilometre maritime link connecting Indian ports to Fuceyra in the United Arab Emirates (UAE), a critical objective for the architects of the project is to modernise the Port of Fuceyra.

It is proposed to transport commercial goods from there by train to Haifa in Israel. This would require the construction of about 700 kilometres of the 2,600-kilometre railway link, mainly to Saudi Arabia. According to estimates provided by the Indian government, the total investment required for the project is estimated at $10-12 billion.

Due to regional political instability and logistical difficulties, it is not easy to fully estimate the cost of the project at this stage. Even if it is difficult to predict whether the project will be realised and to what extent it will be productive, it may strengthen India's domestic economic and political dynamics and provide some distance from the established rentier policies.

Although the IMEC Project is geopolitically more feasible, Turkey has been excluded from this route. However, President Erdoğan emphasised Turkey's indispensability in this project. Erdoğan said, "We say that there is no corridor without Turkey. Turkey is an important production and trade base. The most suitable line for east to west traffic must pass through Turkey."

The IMEC currently remains a predominantly theoretical route, facing numerous challenges to overcome in terms of geopolitical risks and feasibility. In contrast, if the Development Road succeeds in facilitating the expected trade flows, it could become a viable route for European markets, especially given the vast area, i.e. the hinterland, of the Greater Faw Port.

While one of the routes is making progress, the recently proposed IMEC project has a long way to go. In addition, the fact that the Development Road has attracted considerable interest from the Gulf countries underlines that it is at a relatively advanced stage. In this context, Turkey seems to be charting its own course by contributing to the Development Pathway Project rather than seeking a role in the long and intricate IMEC project in which it is not involved.

Possible scenarios

Turkish leaders, meanwhile, recognise and acknowledge the diversity that characterises Iran's political environment and the significant differences between those who have influence in the country. Tehran is faced with two choices: Either integrate into the global economy and thus revive its near-dead economy, or continue to play the villain in its region, straining relations with its neighbours and seeking Pyrrhic victories in the areas it controls.

If the obstacles are removed, the Development Road has the potential to be a success story for all parties involved. Meanwhile, the project will add another layer to Turkey's growing weight as a global transport and transit hub.

It is expected to stimulate the economy on both national and regional scales, linking Western markets with energy resources and a variety of products, while providing Gulf countries with a supply alternative to the flow of goods from Europe, provided a safe investment environment is in place. In this context, it is understood that Turkish foreign policy will focus on realising this project.

Conclusion

Why Development Road Project?

Turkey is an important country that has been at the centre of transportation, energy and trade corridors for many years. Our country, which is included in the BRIEF AND ROAD INITIATIVE (BRI) initiated by China, is now wanted to be excluded from the IMEC, which is planned to be implemented against China. It is not yet known whether this project will succeed or what will be accepted as success. Since it is clear that China will not disappear from the global trade market in a very short time, IMEC will be talked about more.

It is worth reminding once again that it is important for the future of the project to rethink the stability and security issues in the countries that will be substituted by eliminating Turkey.

After all, the actor who knows the Middle East region and what can be experienced here best is the USA, which is the leading actor of the IMEC project. Turkey, which does not want to be included in the new corridor by the USA and India, will not hesitate to take its own regional steps and will continue to be in the field in this respect. Although we think that there will be serious crises in bilateral relations, security and economy in the Development Road project and that the project may progress in line with the projected date, Turkey will continue to take part in every point of this project.

Even if there are setbacks in the railway and motorway parts of this transport corridor, the opening of Faw Port, which will be the largest port in the Gulf, leaving Jabal Ali Port in the UAE behind, will be a success of Turkey in this sense.

Looking at both initiatives, a notable advantage of Turkey's Development Road Project is the existence of an existing railway line to the south of Mosul. There are also efforts to renovate railway lines and stations in Iraq. Another noteworthy aspect is Ankara's close relations with Erbil. These relations have the potential to contribute to the resilience of the project even in the midst of internal political turmoil in Iraq.

Moreover, Turkey's regional strategy to integrate Qatar and the UAE into the project significantly supports its long-term sustainability. Turkey's strategic location alone makes it the only country with a critical role in global corridors, as seen in the recent Suez Canal crisis.

Turkey's indispensability for IMEC is also evident. In the current scenario where Turkey is left out, the IMEC Project lacks vital integration points that bridge the East and West. While IMEC may achieve superficial success in the short term, it will face significant challenges in terms of long-term policy sustainability, especially in the Mediterranean and Middle East regions.

IMEC networks are inherently dynamic and not a homogenous undertaking given the route it traverses, and are susceptible to shifts and disruptions due to geopolitical tensions, natural disasters, epidemics and conflicts, as illustrated by the recent Palestinian-Israeli conflict.

In contrast, the Development Pathway Project exhibits a more coherent network structure, which offers distinct advantages for both initiatives. A possible collaboration between the Development Road Project and IMEC has the potential to foster cooperation that can restructure the global economic and geopolitical landscape by streamlining global trade, thereby delivering significant benefits.

However, the realisation of this vision depends on meticulous planning and strong international cooperation.