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CPEC — a solution to the Kashmir issue?

In December 2017, China offered the Afghan government a chance to become part of their ambitious $50 billion China-Pakistan Economic Corridor (CPEC). At the same time, they made it clear that the project was not in any way directed against India and that no third party should be concerned with its progress. This came after India complained that the corridor passes through Gilgit-Baltistan (GB)in Pakistan-administered Kashmir which is a territory claimed by both India and Pakistan.

After negotiating a border stand-off at Doklam Plateau (China-Bhutan disputed border) both India and China indicated that they wanted to build peaceful relations by solving their bilateral disputes through diplomacy instead of armed conflicts. Pakistan wants to follow the same path, and open a dialogue with India in order for CPEC to develop without any problems. However, another solution could be that the government of Pakistan could instead refer to the people of this region. The Kashmiris and the people of GB could also be brought into the loop. They could finally have the plebiscite that was promised these people by the UNCIP resolution so many years ago.  But this will never happen.

Pakistan fears the outcome of the plebiscite. Why do you think Pakistan has been so reluctant to grant GB provincial status? The usual response from Islamabad is that its due to its disputed nature yet the reality is quite different.

After the 18th amendment was passed under Asif Ali Zardari’s government, provinces were granted a semblance of autonomy. However, if GB was given provincial status, it would control its own economic and administrative polices and could claim a larger share of the benefits from CPEC. Another reason was their small population size of only two million people. If they were granted provincial status then the people of FATA, Southern Punjab, the Potohar region and Karachi could also end up demanding provincial status and full autonomy. Thus, by issuing Order 2018, Islamabad has made certain that the centre continues to enjoy the economic benefits and administrative powers that would’ve instead been under the control of the people of GB themselves.

In case of Azad Jammu Kashmir (AJK), Islamabad amended the Interim Act of 1974. The legislative, monetary and administrative status of the Kashmir Council has been reduced to an advisory role, with all powers reverted to the office of the prime minister. By reinforcing Section 7 of the Interim Act, and adding an additional clause, the government has essentially restricted the freedom movement in AJK and disillusioned the locals.

In October 2017, Afghanistan President Ashraf Ghani categorically said that his country would join the China-Pakistan Economic Corridor (CPEC) only if Islamabad allows connectivity between India and Afghanistan. Mentioning sovereignty issues raised by India, Ghani also warned that if Afghanistan was not given transit access to Wagah and Attari for trade with India via Pakistan, then Kabul would also restrict Islamabad’s access to central Asia. When Pakistan and India both reluctant to sit down for a civilised talk, China decided to use backdoor channels to open a dialogue with India and convince them to cooperate with Pakistan. As a result, an Indian delegation was spotted at a March 23 parade in Islamabad, and later the same year at the Shanghai Co-operation Summit.

“What the region needs is a strong group of leaders who are not afraid to take on the collective might of the Indian and Pakistani governments, in order to fight for the disenfranchised people of Gilgit-Baltistan and Azad Jammu Kashmir”

Now there is an interim government in charge. They have limited powers and this provides the establishment a freehand. As a first step the ISPR (Inter Services Public Relations) on May,29 2018 (soon after the announcement of interim PM) tweeted the first sign of the establishment’s anticipated strategy to calm tensions with India. The director generals of Military Operations (DGMOs) of both countries agreed to a ceasefire agreement on the border, including the LOC in AJK. India for their part realise that the only time relations with their neighbours to the West got better, was under Musharraf’s rule, which is why they believe talking to the establishment will lead to better results with respect to CPEC. If this turns out to be true, then India will be given the green light to join CPEC in the coming weeks. It would benefit them greatly as it would open up markets in central Asia, and, at the same time, ease tensions with Pakistan.


In the end, CPEC seems like a great opportunity for all countries involved yet there is one important community that is being ignored in all of this, the people of GB and AJK. If there had been a strong and unified leadership in the region then perhaps they could have used this opportunity to pressurise Pakistan, and India in to giving them more autonomy and letting them be in charge of their own fate.

However, current leaders are not brave enough to make these sacrifices and are, instead, happy to take whatever scraps Islamabad throws at them. What the region needs is a strong group of leaders who are not afraid to take on the collective might of the Indian and Pakistani governments, in order to fight for the disenfranchised people of GB and AJK. Only then can the years of oppression they have suffered through finally come to a stop and its citizens get the freedom they have craved for so long.


Indian lobby at World Bank frustrates Pakistan

ISLAMABAD: Pakistan and the World Bank have failed to reach an agreement on a way forward to address the former’s concerns over violation of the Indus Waters Treaty by India, as a strong Indian lobby in Washington again frustrated the latest push to stop New Delhi from violating the treaty.

“An agreement on the way forward was not reached at the conclusion of the meetings” between the Pakistani delegation and the World Bank officials, announced the Washington-based lender on Wednesday.

It added that several procedural options for resolving the disagreement over the interpretation of the Indus Basin Treaty’s provisions were discussed by both the parties.

Pakistan to discuss India’s violation of Indus Water Treaty with WB president

“While an agreement on the way forward was not reached at the conclusion of the meetings, the World Bank will continue to work with both the countries to resolve the issues in an amicable manner and in line with the treaty provisions,” stated the World Bank.

But a Pakistani official who attended the meetings claimed that the World Bank has assured to bring resolution to the longstanding dispute. He added that Pakistan lodged the protest in the strongest possible words.

Senior World Bank officials met on May 21-22 with a delegation from the government of Pakistan at their request to discuss the issues regarding the Indus Waters Treaty and opportunities within the treaty to seek an amicable resolution.

Pakistani delegation, led by Attorney General of Pakistan Ashtar Ausaf Ali, met with Kristalina Georgieva, World Bank Chief Executive Officer, and the regional management for South Asia.

The delegation of the Government of Pakistan also shared with the bank their concerns about the recent inauguration of the Kishanganga hydroelectric plant.

The Pakistani delegation had rushed to Washington after Indian Prime Minister Narendra Modi inaugurated the 330-megawatt Kishanganga hydroelectric power plant in Indian Occupied Kashmir (IoK).

The Kishanganga project has the potential to disrupt flows, which will also adversely affect the recently constructed 969MW Neelum-Jhelum hydropower project.

Pakistan has maintained that the dam violates the World Bank-mediated treaty on the sharing of the Indus River and its tributaries upon which 80% of its irrigated agriculture depends.

The disagreement serves a serious blow to Pakistan that remains unable to penetrate in the World Bank, which is under heavy influence of the Indian lobby working in Washington. The South Asian department of the World Bank is also under the influence of the Indian lobby.

Over the years, successive governments kept a blind eye over a growing Indian influence in international financial institutions. The governments have been sending retired and serving bureaucrats from the Pakistan Administrative Service (PAS) Group to fill technical posts in these important global bodies, which affected the country’s position.

A retired PAS officer is currently executive director in the Asian Development Bank in Manila. A former National Highway Authority chairman is now Pakistan’s executive director in the World Bank.

The post of senior adviser to the IMF executive director is vacant for last over one year due to tussle over appointment of a blue-eyed PAS officer in Washington.

To the disappointment of Islamabad, the World Bank also stated that “as a signatory to the Treaty, the World Bank’s role is limited and procedural”.

In particular, the role in relation to ‘differences’ and ‘disputes’ is limited to the designation of people to fulfill certain roles when requested by either or both parties, it added.

ECNEC approves Neelum-Jhelum project at Rs507b cost

The World Bank underlined that the Indus Waters Treaty was a profoundly important international agreement that provided an essential cooperative framework for India and Pakistan to address current and future challenges of effective water management to meet human needs and achieve development goals.

“The World Bank remains committed to act in good faith and with complete impartiality and transparency in fulfilling its responsibilities under the Treaty, while continuing to assist the countries,” according to the handout.

In 2016, Pakistan had filed a complaint with World Bank, saying India had contravened the Washington-based lender-mandated pause placed in 2016 by completion of the Kishanganga Dam.

The Hague-based International Court of Arbitration had ruled in favour of India and allowed New Delhi in 2013 to go ahead with the construction of the Kishanganga hydro power project.

The Kishanganga project was started in 2007 but on May 17, 2010, Pakistan moved for international arbitration against India under the provisions of the Indus Waters Treaty.


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China fails to get Indian support for Belt and Road ahead of Modi-Xi summit

BEIJING: China failed to get India’s support for its ambitious Belt and Road infrastructure project at the end of a foreign ministers’ meeting of a major security bloc on Tuesday, ahead of an ice-breaking trip to China this week by Prime Minister Narendra Modi.

The Belt and Road is Chinese President Xi Jinping’s landmark scheme to build infrastructure to connect China to the rest of Asia and beyond, a giant reworking of its old Silk Road.

India has not signed up to the initiative as parts of one key project, the $57 billion China-Pakistan Economic Corridor, run through Pakistan-Occupied Kashmir. Whether or not China will be able to win India round to the Belt and Road will likely be a key measure of the success of PM Modi’s trip to China to meet Xi for an informal meeting on Friday and Saturday. But Sushma Swaraj did not express support for Belt and Road in the communique released after foreign ministers of the China and Russia-led Shanghai Cooperation Organisation met in Beijing.

India, along with Pakistan, joined the group last year.

All the other foreign ministers – from Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan – “reaffirmed support for China’s Belt and Road proposal”, the statement read.

It gave no further explanation.

Modi is coming to China as efforts at rapprochement gather pace following a testing year in ties between the two neighbors. The Asian giants were locked in a 73-day military stand-off in a remote, high-altitude stretch of that boundary last year. At one point, soldiers from the two sides threw stones and punches. The confrontation between the nuclear-armed powers in the Himalayas underscored Indian alarm at China’s expanding security and economic links in South Asia.

Modi will come again to China in June for a summit of the Shanghai Cooperation Organisation.

China will also have to tread carefully to avoid giving its close ally Pakistan cause for alarm. China on Monday reassured Pakistan that relations between the two countries were as firm as ever and would “never rust”.
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India, US, Australia and Japan in talks to build alternative to China’s Belt and Road


Australia, the United States, India and Japan are talking about establishing a joint regional infrastructure scheme as an alternative to China’s multibillion-dollar Belt and Road Initiative in an attempt to counter Beijing’s spreading influence, the Australian Financial Reviewreported on Monday, citing a senior US official.

The unnamed official was quoted as saying the plan involving the four regional partners was still ”nascent“ and ”won’t be ripe enough to be announced’ during Australian Prime Minister Turnbull’s visit to the United States later this week.

The official said, however, that the project was on the agenda for Turnbull’s talks with US President Donald Trump during that trip and was being seriously discussed. The source added that the preferred terminology was to call the plan an “alternative” to China’s Belt and Road Initiative, rather than a “rival.”

China’s Silk Road revival ‘hits hurdles’

“No one is saying China should not build infrastructure,” the official was quoted as saying. “China might build a port which, on its own is not economically viable. We could make it economically viable by building a road or rail line linking that port.”

Representatives for Turnbull, Foreign Minister Julie Bishop and Trade Minister Steven Ciobo did not immediately respond to requests for comment.

Japanese Chief Cabinet Secretary Yoshihide Suga, asked at a news conference about the report of four-way cooperation, said Japan, the United States, Australia, and Japan, Australia and India regularly exchanged views on issues of common interest.

“It is not the case that this is to counter China’s Belt and Road,” he said.

Pakistan’s development by-product of China’s global integration

Japan, meanwhile, plans to use its official development assistance (ODA) to promote a broader “Free and Open Indo-Pacific Strategy” including “high-quality infrastructure”, according to a summary draft of its 2017 white paper on ODA. The Indo-Pacific strategy has been endorsed by Washington and is also seen as a counter to the Belt and Road Initiative.

First mentioned during a speech by Chinese President Xi Jinping’s to university students in Kazakhstan in 2013, China’s Belt and Road plan is a vehicle for the Asian country to take a greater role on the international stage by funding and building global transport and trade links in more than 60 countries.

Xi has heavily promoted the initiative, inviting world leaders to Beijing last May for an inaugural summit at which he pledged $124 billion in funding for the plan, and enshrining it into the ruling Communist Party’s constitution in October.

Local Chinese governments as well as state and private firms have rushed to offer support by investing overseas and making loans.

Adding Afghanistan to China’s OBOR is a tricky gambit

In January, Beijing outlined its ambitions to extend the initiative to the Arctic by developing shipping lanes opened up by global warming, forming a “Polar Silk Road”.

The United States, Japan, India and Australia have recently revived four-way talks to deepen security cooperation and coordinate alternatives for regional infrastructure financing to that offered by China.

The so-called Quad to discuss and cooperate on security first met as an initiative a decade ago – much to the annoyance of China, which saw it as an attempt by regional democracies to contain its advances. The quartet held talks in Manila on the sidelines of the November ASEAN and East Asia Summits.



China and India take battle for influence to Dhaka stock market

NEW DELHI — China and India are vying to invest in Bangladesh’s stock exchange, a battle that has implications for the two regional powerhouses’ rivalry in South Asia.

The Dhaka Stock Exchange plans to sell 25% of its shares. On one side is a consortium of the Shenzhen and Shanghai stock exchanges. Ranged against them is a consortium made up of India’s National Stock Exchange, Nasdaq of the U.S. and others. The exchange will select one of the groups as its preferred bidder on Monday, at the earliest, and submit a report to the Bangladeshi Securities and Exchange Commission for approval of the sale.

The Chinese consortium has offered 22 taka (26 cents) a share, while the Indian-led bidder has offered 15 taka. Local media report the Chinese bidder has also offered technical assistance worth nearly $37 million, in addition to the share purchase valued at $120 million.

India’s National Stock Exchange is a private-sector company, but it was set up by a group of big financial institutions at the behest of the government. Chinese exchanges, meanwhile, take their cue from Beijing. This adds to the impression that the battle for the stake in the Bangladeshi bourse is part of the larger rivalry between China and India.

The Indian side appears to be at a disadvantage, but National Stock Exchange CEO Vikram Limaye flew to Dhaka on Feb. 11 to lobby the Securities and Exchange Commission, according to sources.

Vikram Limaye, CEO of India’s National Stock Exchange © Reuters

The Dhaka exchange has, up to now, been funded by small, local securities companies. Because the bourse is demutualizing itself, it is seeking a foreign strategic partner. It believes selling the one-fourth stake will help modernize the country’s capital markets.

Beijing is trying to make the yuan a major international currency, asking its trading partners to use the Chinese currency to settle some transactions. If the Chinese consortium wins the bid for Dhaka exchange and sends directors to help run it, China may be able to list yuan-denominated financial products there in the future. For Chinese companies operating in Bangladesh, listing their shares on the exchange would allow them to finance their operations locally.

Another Chinese consortium that includes the Shenzhen and Shanghai exchanges bought a 40% stake in the Pakistan Stock Exchange, the country’s only bourse, for nearly $90 million in January last year. Economic ties between the two countries are deepening, with many Chinese businesses operating in Pakistan, spurred by work on the China-Pakistan economic corridor. If these companies list their shares on the Pakistan Stock Exchange, China’s influence will grow.

Stock brokers monitor the market at the Pakistan Stock Exchange in Karachi. © AP

But India has trump cards of its own. Bangladesh shares more than 90% of its land border with India and leaders of the two countries have visited each other almost every year recently. A railway linking the eastern Indian city of Kolkata and the industrial city of Khulna in Bangladesh’s southwest began operating last November. In addition to strengthening their economic ties, the neighbors have agreed to bolster their defense cooperation. Indian Prime Minister Narendra Modi maintains closer ties with Bangladesh than he does with other neighboring countries.

For China, relations with Bangladesh are fairly distant compared with the other countries in South Asia, but it is trying to change that. In 2016, Xi Jinping became the first Chinese president to visit the country, pledging loans worth $20 billion. That is 10 times more than Modi offered when he visited Dhaka the previous year.


India’s insufferable outlook on CPEC: A critical appraisal

INDIA’S constant opposition towards CPEC would not be affecting this Project at all. Simultaneously, this project is not prohibiting India to be the part of CPEC being an inclusive project. This is purely a development project and has no excuse to restrain the development in the disputed areas as India is casting repeatedly its stance that CPEC passes through the disputed area and is a serious concern for India. It may intentionally does not want to raise the standards of living of the masses of those areas. CPEC is a flagship project of China’s One Belt One Road Initiative which includes more than 65 countries of the world and it is not like a Multilateral Export Control Regime “an international body that states use to organize their national export control systems”/regime like NSG in which a consensus of the member countries is needed for the new developments. For example   if one member country is not giving its consensus for any development, the whole development will be halted. Instead CPEC project is an open and inclusive project and inviting other countries to invest for the mutual benefit and shared prosperity of the respective regions. Pakistan and China are working on the economic cooperative initiative is backed by the UN and several other countries of the world adding it is not directed against any third party. There is no universal justification of India’s claim over the disputed territories on ground because there are such examples where the developmental work has been done such as last year Philippines released photographs of construction of structures by Chinese vessels in disputed Scarborough Shoal in South China Sea during ASEAN Summit in Vientiane. India beefed up its concerns against Chinese sponsored China-Pakistan Economic Corridor (CPEC). Will the disputes between or among countries obstruct the overall development of the region and the populace residing in those areas? Recently on 27th January, 2018 India’s Ambassador to China Mr. Gautam Bambawale’s statement “Beijing should pay serious attention to New Delhi’s concerns about the China-Pakistan Economic Corridor (CPEC) and not ignore them. The China-Pakistan Economic Corridor passes through Indian-claimed territory (PoK) and hence violates our territorial integrity. This is a major problem for us” is the insufferable stance on CPEC. Since the introduction of this project, these kinds of statement have been uproaring on different international or national forums from India’s side. Despite these stern statements, the project has been progressing very well. Moreover, the US has also put its weight behind India by saying that it too believes the route of the Corridor passes through a disputed territory — a reference to Northern areas of Pakistan. The statement has come at a time when Foreign Minister Khawaja Asif was in Washington and held series of talks with the US officials to normalize the tense relations. This new stance has started another debate and is undoubtedly going to further damage the bilateral ties, as it is profusely obvious now that the US envisions a greater role for India in the region.

Apart from the vicious existence of terrorism in South Asia, the Kashmir dispute between Pakistan and India is also the biggest hindrance for any possibility of a large scale investment coming into the region. India should be on the front line to negotiate with Pakistan to resolve this conflict as a solution to the concern on CPEC to promote prosperity and development in that area because the northern part of India bordering Pakistan and Indian-occupied Kashmir lacks the basic infrastructure.

India’s perceived sense of insecurity regarding this project is that through CPEC the sources and standards of livelihood of the people living in Pakistan’s side of Kashmir would be raised. This is a serious anxiety in India as this hopeful situation presents a Pakistan’s GB stark contrast to the situation in Indian occupied Kashmir, where the occupation forces have unleashed a reign of terror against innocent Kashmiris for committing the ‘sin’ of demanding legitimate socio-political rights.

China would not give up CPEC just because of mere Indian protests. The Indian government will not cease its developmental activities in Arunachal Pradesh either. But is it not important to respect the voices of communities residing in disputed territories as a priority rather than following the institutional norms in developmental activities?  From inter-governmental institutions like ADB/World Bank to each country sharing disputed territories like India or China or Pakistan, it is foremost important to stand up with rights to development of communities. Otherwise, Sustainable Development Goals (SDGs) cannot be considered ‘universal’. Indians are only good in massacring its own minority races like Sikhs and Muslims.

In a nutshell, India’s regional aspirations to contain China’s growing regional influence and conveying such messages to China will not carry sufficient weightage in the long run to cut China’s commitment towards CPEC. India has some faulted security relations with China even if there is no CPEC. The only thing is that India being the major country of the region should play its influential part towards the development of the region making peace with the neighbouring states.

Lastly, if India is striving hard by investing in Chabahar Port and other initiatives, such as its support to 116 influential projects in 31 provinces in Afghanistan, are aimed to undercut CPEC and increase India’s hold in Kabul then why it is protesting the developments in the disputed areas through which CPEC passes. These 116 India-sponsored projects will cover hydropower construction, farmland water conservation projects and renewable energy among others that will directly affect life of the common people of Afghanistan. Likewise through CPEC the regional development is possible if India look at this project through the prism of development.

and benefits among provinces. This Council of Common Interest has done a great job in the past in resolving difference of opinion among provinces. So there is not a remote possibility of any hurdle from any side within Pakistan about successful implementation of the China Pakistan Economic Corridor. In fact our national policy makers should take care of the benefits of all the provinces as each province is the part of Pakistan. Likewise security of CPEC will remain prime responsibility of Armed Forces of Pakistan throughout.