China: Impact of CPEC project in Gilgit Balistan

China’s Belt and Road Initiative (BRI), is an infrastructural project aimed at renewing China’s historical trade routes in the Eurasian mainland and also in the coastal countries of South East Asia and across the vast stretches of the Indian Ocean. In 2013, China’s President Xi Jinping first coined the idea of the new Silk Road Economic Belt (SREB) and in a year, the idea transformed into becoming the fulcrum of its foreign policy and an economic strategy initiative, first known as the One Belt One Road (OBOR) and eventually rechristened into the BRI.

The elementary objective of the BRI is to amplify regional connectivity through construction of roads, railways, development of maritime ports and establishing pipeline connections. Thus the BRI corridors are projected to link China with more than 150 countries through a web of roads, railways and sea routes. In total, the estimated amount of the BRI projects could be up to USD 1.3 trillion, which would be about seven times as widespread as the Marshall Plan and the biggest investment in human history.

Relation between BRI and CPEC

China-Pakistan Economic Corridor (CPEC) is the ‘prize plan’ of the BRI, which links China’s northeastern province of Xinjiang (Kashgar) with the Gwadar Port region of Balochistan in southwestern Pakistan. CPEC is by far one of the most ambitious and expensive components of China’s BRI. The economic corridor, a mix of transportation and energy infrastructure projects at an estimated cost of USD 60 billion, has been a showcase project of the Chinese government since it was officially launched in 2015. In recent years, CPEC has received additional international attention and scrutiny, much more than the BRI projects in any other country and for a good reason, if it is finished as intended, it could have lasting consequences for China’s geopolitical and economic interests in the region.

The CPEC basically has four components: infrastructure, energy, industrial collaboration and Gwadar-related projects. Experts and officials expect that the vast transport infrastructure of the CPEC and especially its Gwadar port will play a crucial role in the country’s pursuit of its goal particularly at a time when it has started enhancing trade ties with landlocked Afghanistan and the Central Asian countries. iv It is believed that the Chinese and the Pakistani top leadership planned to reorient their bilateral relations with new dimensions in the presidential level interactions in 2006 and 2008 which resulted in the formulation of what in 2015 was termed as the CPEC and was strategically placed under China’s broader economic vision of the BRI.

It is vital to understand that the execution of this project lies on several factors. Since its creation in 1947, Pakistan has been experiencing internal strife ranging from sectarian conflicts, ethnic violence, domestic politics, energy deficiency and stressed foreign relations within its region. These factors have a direct impact on the feasibility of the CPEC since a significant amount of investments have been made in Pakistani territory, particularly in the insurgency-prone areas in Balochistan. On the other hand, China faces restraints within its own borders. The Xinjiang Province plays a strategic role geographically for the CPEC. This means that a sense of assured peace in the region is integral to capitalize the benefits of the economic corridor and realize its true potential. China has already been suffering from an ethnic turbulence in the province due to clashes between the indigenous Muslim Uighur population of Xinjiang and the mainstream Han Chinese. The consequent harsh measures being taken by the Chinese authorities against the Uyghur population has globally become a matter of concern. One cannot deny the fact that these are existential issues that are important and pose a serious challenge to the way CPEC is unraveled and executed in the region.

Gilgit- Baltistan & Pakistan Administered Kashmir and CPEC

Admittedly, the projects of CPEC in Pakistan Administered Kashmir have economic and political implications for not just Pakistan, but the region as a whole. Some security analysts have predicted that CPEC related plans have the capacity to turn the disputed territory of Pakistan Administered Kashmir into Pakistan’s economic engine. Under CPEC, nine Special Economic Zones (SEZs) are slated to be established across Pakistan, including one in Pakistan Administered Kashmir’s Mirpur. Likewise, an expressway is being planned to connect Mirpur and

Muzaffarabad with Mansehra, and then link these three places with the primary CPEC route along with other hydropower projects. But, the central route of CPEC goes over the Gilgit-Baltistan area of Pakistan Administered Kashmir, joining Raikot, Khunjerab and Gilgit with Sazin in Khyber Pakhtunkhwa. Crucially, it is at Gilgit-Baltistan that Pakistan connects with Aksai Chin or China administered region of Kashmir. Gilgit-Baltistan and its capital Gilgit, are therefore called, the gateway of the CPEC corridor.

Since the end of the British colonial rule in the Indian subcontinent in 1947, with the ensuing restructuring of the political map of the region, and the transfer of power to the successor states; the former principal state of Jammu & Kashmir (J&K) has turned into a major crisis zone in the region. This has largely emerged out of decades of warfare and a complex political climate where large swathes of land have been administered by countries such as Pakistan and China, unofficially dividing the erstwhile princely state into several territorial entities. As a result, the geopolitical entity is today administered by three countries, namely Pakistan (Pakistan Administered Kashmir/Azad Kashmir and Gilgit-Baltistan), India (Union Territories of Ladakh and J&K), and China (Aksai Chin, Shaksgam Valley).

Reportedly China’s presence in Gilgit Baltistan is an extension of its ambitions of reconstructing the ancient Silk Road. Since 1947, the region has been perceived as a disputed territory by the major countries in the neighborhood. Earlier known as the Northern Areas of Pakistan, it is the northernmost administrative territory of that country. In this context, the construction of the CPEC is an important counter in the Chinese Great Game. Along with the ambitious BRI, the roots of this corridor can be traced back to the Border Agreement of 1963, in which Pakistan ceded more than 5,000 sq miles of illegally Administered Jammu & Kashmir to China.

Meanwhile, in the past few decades, China has belligerently grown its geographical expanse along the China-India border in Jammu & Kashmir by making investments and undertaking infrastructure development activities in Pakistan Administered Kashmir. Surely, the CPEC is central to the hegemonic quests of China in the Indian Subcontinent. The selection of Pakistan Administered Kashmir for developing the tactically important CPEC yields multidimensional advantages that go beyond the noticeable economic benefits. The CPEC when complete will not only give China access to the Arabian Sea and develop an alternative route for its critical energy imports and other resources, but also provide another gateway to mineral-rich and politically vulnerable Afghanistan.

CPEC projects in Pakistan Administered Kashmir

China has undertaken several infrastructural projects in Pakistan Administered Kashmir, and has invested a substantial amount of finances and manpower in improving and enhancing the Karakoram Highway. Pakistan’s then Prime Minister Nawaz Sharif in 2015, while celebrating the Chinese interest in developing the region had inaugurated the seven-km-long five tunnels, referring to them as the Pakistan-China Friendship Tunnels, constructed by China over Attabad Lake in Gilgit-Baltistan’s Hunza valley.viii Strategically significant, at least 440-kilometer of the Karakoram Highway which is the lifeline of CPEC passes through Gilgit- Baltistan. With this mega project the geo-strategic and geo-economic significance of Gilgit-Baltistan has undoubtedly magnified.

The Kohala Hydel Project- The Kohala Hydro Company Pvt. Limited came into being in the year 2015 and is responsible for executing the Kohala Project. The Project is by the River Jhelum, located near the Muzaffarabad district of Pakistan Administered Kashmir. The average annual energy generation of the main power station is expected to be 5.079 billion kWh. It is expected to be completed by December 2025, with a projected total cost of USD 2,364.05 million.ix The Kohala Hydro Company is a subsidiary of China Three Gorges Corporation (CTGC). Along with a host of issues with the Chinese developer of this project, water flows have been a chief hurdle in the completion of this endeavor. In the meantime, the government has approved a revised plan of water flows to recommence work on the project.

Special Economic Zone at Mirpur- As reported in June, 2019, throwing light on the CPEC projects in ‘Azad Kashmir’ of Pakistan Administered Kashmir, Sardar Masood Khan, President of ‘Azad Jammu and Kashmir’, said that special incentives have been offered by the AJK government for investment in the Mirpur economic zone; these incentives include the tax-free import of machinery and other equipment, construction of infrastructure, and permission to prospective investors to generate their own electricity to run the industries at the local level.xi

Special Economic Zone in the Maqpoondas area- In May 2019, Pakistan’s Board of Investments (BoI) permitted the fast-track development of nine SEZs, including Moqpondass, about 40 km from the city of Gilgit. While 250 acres have been acquired for Moqpondass SEZ and a feasibility study has been submitted by the Gilgit-Baltistan industries department, the National Assembly was informed that a “formal application for a declaration of SEZ as per provisions of the SEZ Act 2012 is still awaited”.

Mansehra-Mirpur Expressway- This China-funded road project in Pakistan will stretch across 200 km. It would connect the entire Gilgit Baltistan, Pakistan Administered Kashmir to CPEC’s central route. After completion, it is expected to be the shortest route from Punjab, shortening the current route by 50 km and saving around four to six hours of travel time. At present, the expressway is at the preliminary stage with a projected cost of USD 2.5 billion.

Azad Pattan Hydropower Project- Pakistan and China decided to include the 700 megawatts Azad Pattan hydropower project in the Sudhoti district of Pakistan Administered Kashmir under the CPEC framework in the year 2019. This project is a run-of-the-river pondage scheme on Jhelum, with ability for 4 hours of daily peaking during the dry season. The project would be located near the Azad Pattan bridge, upstream of the 720 MW Karot hydropower project and downstream of the 640 MW Mahal hydropower project and would be part of the River Jhelum hydel cascade.

Phandar Hydropower Project: The project area is located between Phandar Lake and Chhashi Gol of Gilgit-Baltistan’s Ghizdar district. Phandar Lake is situated about 168 km northwest of Gilgit town and 772 km north of Islamabad. The project has an installed capacity of 80 MW and is under the review of the experts on both sides.

KIU hydropower project: The hydropower project, was approved under the B2B model in CPEC.

With an installed capacity of 100 MW, the project is awaiting its final approval from both governments.

China-Pakistan optical fiber project: In May 2016, construction began on the $44 million Fiber Optic Project, a Cross Border Optical Fiber Cable that will enhance telecommunication and ICT Industry in the Gilgit Baltistan, Khyber Pakhtunkhwa and Punjab regions, while offering Pakistan a fifth route to transmit telecommunication traffic safely. The 840 km project will connect Karimabad, Gilgit, Babusar, Naran, Mansehra, and Jarkyas to Rawalpindi/Islamabad. It is expected that the territory of Gilgit will benefit immensely from these enhanced communication capabilities. Again, out of the 840 km long optic fiber cable line, a major proportion of about 466km is expected to pass through the areas of Gilgit Baltistan. It is estimated that apart from providing secure voice traffic these initiatives will also generate employment opportunities in the region. xviii
KIU hydropower project- With an installed capacity of 100 MW, the project is under currently under review from both ends. The hydropower project, was approved under the B2B model in CPEC.

Chitral CPEC Link Road from Gilgit, Shandor, Chitral to Chakdara- This CPEC project is expected to connect Chakdara in Khyber Pakhtunkhwa to Gilgit in Gilgit- Baltistan via Shandora and Chitral. In September 2017, the project was officially encompassed in the CPEC.

How CPEC is impacting Gilgit Baltistan, Pakistan Administered Kashmir
The area referred to as Pakistan Administered Kashmir (PoK) is characterized by a hilly and rocky topography with lakes, rivers, streams and waterfalls. The area is also known for its natural as well as mineral reserves such as potassium, coal, gold and ruby. Thus, Pakistan Administered Kashmir has great prospects to market and develop the mining of stones and other minerals. This is part of a well-crafted strategy to explore the area’s natural resources and provide the much-valued boost to the precious metals and minerals sector. TM In fact the Pakistani government went one step further and actively settled outsiders, mostly Punjabis in the region to enable them to make significant investments in the local manufacturing units.

But this so-called development and tampering of a geologically sensitive zone in the Himalayan region is not devoid of environmental consequences. For instance, the area of Gilgit-Baltistan in Pakistan Administered Kashmir is already facing severe environmental crises and disasters emerging out of the rising temperatures that are contingent on infrastructural activities in the belt. This has further accentuated the problem of climate change causing inadequate waste disposal, water and air pollution, natural resources depletion, loss of biodiversity, deforestation and glacier melting. Geologists have noted that intense seismic activity coupled with erosion and weathering processes as well as steep terrain, rainfall and increased irrigation for agriculture have resulted in swift snow melting and glacier dilution impacting the flow of major rivers in the region and triggering dangerous landslides such as the one in 2010, which caused the formation of Attabad Lake in Hunza area of Gilgit-Baltistan.5TM In addition, around 36 glacial lakes of Gilgit-Baltistan have been declared dangerous because of the implications of the CPEC project. Clearing of forests, cutting of trees, blasting of rocks, altering mountain structures and increasing movement of heavy vehicles is also harming the area. In all of this, it is the local population, many being tribes, who are suffering enormously from the environmental degradation which is directly impacting their livelihood and ways of being. Moreover, with economically disruptive policies and lack of responsible governance to conserve nature it is the common people who have been neglected by the Pakistani authorities and pushed into a state of degraded living while benefits have been accrued by a privileged few.

In complete disregard of the impending natural disasters that CPEC could cause, Pakistan has been seizing forests and agricultural lands to transfer them to Chinese companies for large-scale infrastructure projects. There is also the Shia- Sunni dimension with Gilgit Baltistan traditionally being a Shia majority area and now being dominated by Sunni settlers in the name of protecting CPEC. The resentment is obvious as ex-army officers, Sunni extremist clerics and Sunni settlers from the interior parts of the country are being brought in as workers for various Chinese projects. The great influx of Sunni population in a Shia majority area is further creating a sectarian imbalance in Pakistan Administered Kashmir. Wahabi Sunni settlers have aggressively banished the Shia population from villages on the Karakoram Highway to secure the CPEC. This has been tacitly supported by the Chinese who see the Shia population as being against the CPEC and trust the Sunnis as being the protectors as they have the support of the establishment and particularly Pakistan’s deep state, the ISI. Besides, hundreds of Chinese nationals have also permanently settled in Gilgit-Baltistan to begin businesses, therefore creating demographic pressure on the local natural resources. However, far more serious is the creation of ‘no-go’ zones constructed by the Chinese nationals who restrict the access and movement of local people in these areas. These are exclusively meant for the Chinese making the locals alien in their own motherland.

Concluding remarks

For almost seven decades, Pakistan has been having friendly relations with China, and the two countries have been labeled as iron brothers. The Pakistan-China friendship has a long history of shared coordination on various domains including trade, tourism, economy, education and defense.

A major challenge for Pakistan in the context of CPEC is to negotiate better terms with the Chinese companies so as to derive reasonable profits from the investments made in the country’s infrastructure. The Pakistani leadership seems apprehensive on the nature and scope of implementation of the CPEC program so that structural imbalances are removed and the economy attains sustainable growth. This is an important cause of concern since the CPEC is heavily tilted in China’s favor and driven by its own vested interests. Moreover, with the region of Gilgit Baltistan/Pakistan Administered Kashmir being perceived as disputed, there is uncertain legislative participation on various issues. This becomes particularly significant considering the massive financial stakes that China has in the projects in the region and the possibility of financial fraud which is otherwise a common practice in Pakistan.

Moreover, Beijing is also fully aware that given Pakistan’s internal imbalance, ethnic strife and lack of stability, CPEC is a colossal gamble and will have to be closely monitored. The bilateral relationship will only become more concrete and stabilized if the projects are completely executed, though there are a number of reasons as to why it may possibly not.

Thus despite many trials and risks, China and Pakistan both seem committed to completing the CPEC and with the second and third phases of this initiative becoming operational in the coming years, other countries may also like to participate and take advantage of its transportation network. Interestingly, Pakistan’s move to allow various CPEC projects in Gilgit Baltistan/ Pakistan Administered Kashmir in violation of its earlier commitments to the region, changes in the governance module, has impacted the fundamentals of the so-called Kashmir issue that it keeps harping on in international bodies and has increased China’s stake in this political quagmire. In a way, China-driven by its greed for power and resources has taken a calculated risk to establish its own ‘sphere of influence’ in the region. Sadly, however, this is being done at the cost of the environment, impacting local livelihoods & changing demographic structures while the country it calls its iron brother, acting as a vassal state, surrenders its much fought sovereign character to a culturally alien neighbor.

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