From Karakoram Highway to China Pakistan Economic Corridor through Gilgit-Baltistan Hermann Kreutzmann CPEC Game-changer for Gilgit-Baltistan? 1. Economic impacts Already planned projects have been re-labelled as CPEC projects - infrastructure projects such as link roads to Karakoram Highway - hydro-electrical power plants - trans-boundary national parks CPEC and Pakistan - Potentials and challenges Potentials • Boost for infrastructure development: roads, dams and hydro-electricity • Expectation of economic spin-off effects, more than US $ 55 billion investments • Cross-border trade and regional development • Rural uplift and welfare production Challenges • Concentration of development funds on limited corridor areas • Neglect of minorities and remote areas • Preferential treatment of potential investments • Loss of domestic market shares • Growing dependency on China • High cost of loans and unsecure recovery Source: Dawn 21 June 2017 “one belt, three passages, and two axes and five functional zones” Northern Pakistan Zone: • border logistic channel • resource exploration • ecological conservation Source: Dawn 21 June 2017 The effects of China-Pakistan Economic Corridor on Gilgit-Baltistan Economic aspects • Pakistan is highly indebted with China: 5 billion US $ fresh loans in 2018 alone • The reserves decline and a sharp widening of Pakistan’s current account deficit will probably require a second International Monetary Fund (IMF) bailout since 2013 • High investments in CPEC-related equipment and machinery purchased in China • Devaluation of Pakistan Rupee continues Source: Dawn 27 May 2018 Muhadiss Shahzad in Herald 2017 existing railheads Projects under CPEC to be implemented in Gilgit-Baltistan in the first phase • Completion of Karakoram Highway sections between Havelian and Thakot (under construction) and between Thakot and Raikot (in planning): estimated cost app. 2 billion US $ • Linkroad from Gilgit to Chitral via Shandur Pass, connecting Gilgit-Baltistan with Chakdara (KPK) • Special Economic Zone in Maqpoondas: • Marble / Granite • Iron Ore Processing • Fruit Processing • Steel Industry • Mineral Processing Unit • Leather Industry • Gilgit KIU Hydropower 100 MW (potential energy project) Source: CPEC webpage; Minutes of the 6th Joint Cooperation Committee Meeting 29.12. 2016 Game-changer for Gilgit-Baltistan? Gilgit-Baltistan and Xinjiang – trans-boundary national parks Source: Hermann Kreutzmann 2016 The effects of China-Pakistan Economic Corridor on Gilgit-Baltistan Governance aspects Undefined administrative status and territorial disputes under international law - disenfranchisement of residents of Gilgit-Baltistan - geopolitical impact Minority status in terms of ethnicity, language and religion CPEC CPEC Source: Kreutzmann 2013: 14 Language diversity Denominational diversity Source: Benz 2013, p. 124 The effects of China-Pakistan Economic Corridor on Gilgit-Baltistan Security issues - China’s border strategy to ban Muslim infiltration from Pakistan - fighting against three evils: terrorism, extremism, separatism - recent introduction of additional controls for foreign visitors to Gilgit-Baltistan China Mounted Yak Cavalry Source: Herald 28 January 2017 Who benefits from China-Pakistan Economic Corridor? • Gilgit-Baltistan functions mainly as a thoroughfare between Xinjiang and Punjab • The transit corridor has little impact on jobs • Commercial hubs in Sost dry port and Gilgit bazaar • Transfer of Sost Dry Port to National Logistics Cell (NLC) • pressure on land property by outsiders Aziz Ali Dad 2017: “Engaging local communities and political representatives at different CPEC forums will enable the government to mainstream local aspirations in an initiative that has global dimensions. … Broadening highways into corridors without expanding the horizons of opportunities will have negative repercussions in the long term.” Horizons of CPEC - Local demands and aspirations • strengthen educational and learning institutions for bringing required skills to residents of GB • communicate governmental policies, programs, and projects regularly among stakeholders at all levels, to ensure high-quality programs & services • ensure community ownership and sustainability • implement business supportive legislations • prioritizing local labour over non-locals • promotion of peace is vital • clarity about the issue of identity and basic rights for the people of GB • proper representation of GB in the National Assembly and Senate • adequate legislation and regulations for the potential sectors of power- generation, mining and trade • preservation of cultural heritage by proper management policies • link GB’s cultural heritage with economic development • stakeholders and local communities should be fully taken on-board for any environmental assessment • introduce a mechanism of payment for environmental services Horizons of CPEC - Local demands and aspirations • skills • transparency • community ownership • legislation • local labour • peace • identity and basic rights • proper political representation • adequate legislation • preservation of cultural heritage • economic development • stakeholders’ involvement • sustainability • payment for environmental services Is Imran Khan an extremist? Source: Dawn 12 August 2018.