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Horizons of CPEC in Gilgit- Baltistan: A Prospective Study 2017 Aga Khan Rural Support Programme Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme 2017 Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme i Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme Aga Khan Rural Support Program (AKRSP) Baber Road, P.O. Box 506, Gilgit Gilgit-Baltistan, Pakistan Phone: (+92-5811) 52480/52910/52679 Fax: (+92-5811) 54175 AKRSP@2017 ii Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme List of Acronyms AKRSP Aga Khan Rural Support Programme BCFD billion cubic feet per day BHCs Basic Health Centers BHUs Basic Health Units CENTO The Central Treaty Organization CPEC China-Pakistan Economic Corridor FAO Food and Agriculture Organization FDI Foreign Direct Investment FGD Focused Group Discussions FTZ Free Trade Zone GB Gilgit-Baltistan GBLA Gilgit-Baltistan Legislative Assembly GDP Gross Domestic Product GTZ German Technical Cooperation Agency HKH Hindu Kush ICT Information and Computer Technology IMF International Monetary Fund ISP internet service provider KKH Karakorum Highway LNG Liquefied Natural Gas MCH Mother and Child Health MICS Multiple Indicator Cluster Survey MW Megawatt NATCO Northern Areas Transport Cooperation NDRC National Development and Reform Commission NIM New Issue Market OBOR One Belt One Road PSLM Pakistan Social and Living Standards Measurement SCO Special Communication Organization SEATO Southeast Asia Treaty Organization SEZs Special Economic Zones US United States US$ US Dollar WDR 2009 World Development Report 2009 iii Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme Table of Contents List of Acronyms .................................................................................................................. iii Table of Contents ................................................................................................................. iv Acknowledgement ................................................................................................................ vi Executive Summary ............................................................................................................ vii Introduction .......................................................................................................................... 1 Study Background .......................................................................................................................... 2 Study Objectives ............................................................................................................................. 3 Methodology ................................................................................................................................... 3 Limitations of the Study .................................................................................................................. 4 China-Pakistan Economic Corridor ...................................................................................... 6 History of Pak-China Relations ...................................................................................................... 6 Components of CPEC ..................................................................................................................... 8 Pakistan’s Energy Sector ..................................................................................................................... 8 Transportation Infrastructure ............................................................................................................... 8 Special Economic Zones ..................................................................................................................... 9 Pakistan’s Perspectives on CPEC ................................................................................................. 10 Special Economic Zones ................................................................................................................... 11 Enhanced Energy Supply ................................................................................................................... 12 Activity in Real Estate ....................................................................................................................... 12 Growth Potential in Stock Exchange ................................................................................................. 13 Reinforce Export of Fruits ................................................................................................................. 13 Establish foothold in manufacturing sector ....................................................................................... 13 Area Background ................................................................................................................ 15 Pakistan Overview ........................................................................................................................ 15 Gilgit-Baltistan Regional Context ................................................................................................. 16 Social and Environmental Context .................................................................................................... 18 Economic Context ............................................................................................................................. 20 Gilgit-Baltistan Sectoral Review ......................................................................................... 23 Social Profile ................................................................................................................................. 23 Rural Livelihoods and Poverty ..................................................................................................... 25 Health and Education ................................................................................................................... 26 Governance and Administration ................................................................................................... 28 Environment ................................................................................................................................. 30 Trade and Commerce ................................................................................................................... 31 iv Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme Transportation and Logistics ........................................................................................................ 34 Power Generation ......................................................................................................................... 35 Information and Communications Technology (ICT) .................................................................. 37 Mine and Minerals ........................................................................................................................ 38 Tourism in Gilgit-Baltistan ........................................................................................................... 39 Community Perception in Gilgit-Baltistan .......................................................................... 41 Social/Environmental Aspiration and Concerns ........................................................................... 41 Economic Aspiration and Concerns .............................................................................................. 45 Recommendations ............................................................................................................... 49 References ........................................................................................................................... 52 v Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme Acknowledgement AKRSP, being one of the partners in the development of the area, aims at producing knowledge related to emerging needs, changes trends and developments in the social and economic domains of Gilgit-Baltistan and Chitral. In 2017, AKRSP carried out a prospective study about China Pakistan Economic Corridor (CPEC) Gilgit-Baltistan and Chitral (GBC). This study is outcome of the research carried out by Knowledge Management and Communications section of the Aga Khan Rural Support Programme (AKRSP), with the cooperation of Karakoram International University, researchers and local communities in Gilgit- Baltistan. We are especially grateful to Mr. Muzaffar Uddin for providing the overall guidance and academic insights from the stage of conception of the study to its fruition. It is hoped that this study will contribute to address the knowledge lacuna about CPEC and its possible impact on the society and economy of Gilgit-Baltistan and Chitral. Aziz Ali Dad Specialist Knowledge Management and Communications vi Horizons of CPEC in Gilgit-Baltistan: A Prospective Study Aga Khan Rural Support Programme Executive Summary Since its inception Aga Khan Rural Support Programme remains sensitive to the broader changes occurring at socio-economic domains in Gilgit-Baltistan and Chitral. With the opening of Karakoram Highway, the region got exposed to exogenous ideas, lifestyle and market forces. It was the period when Gilgit-Baltistan witnessed a shift from traditional mode of governance and economic system to modern ones. The cumulative
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