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Politicization of CPEC

Research Analysis Group-IMs. Sobia Mazhar (Leader)

Mr. Athar NaveedMr. Zubair Ahmed Channa

Mr. Naveed Rehmat

Advisor: Mr. Abdul Sammad Channa (ADS)

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SequenceIntroductionApprehensions / Grievances of ProvincesSindh Province Balochistan ProvinceKhyber Pakhtoonkhwa ProvinceEfforts to Scuttle CPEC Socio Economic Impact of CPECRecommendationsStrategies Conclusion

INTRODUCTION

By:MS. SOBIA MAZHAR

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Introduction

• Closed Strategic Allies

• CPEC 45.651 billion $ mega

project

• Upgrade and expand infrastructure

• Transit route facility

• Exim Bank of China

• 11 billion $ at 1.6% interst rate for infrastructure

Proposed Routes

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Western Route

Cont’d…..

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Central Route

Cont’d…..Proposed Routes

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Eastern Route

Cont’d…..Proposed Routes

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Salient Features

• Transport Infrastructure• Telecommunications• Energy Sector• Intelligence sharing• Gas pipelines• China’s strategic ambitions• “game and fate changer “

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Phases of completion• Early Harvest Projects (2018)• Short-Term Projects (2020)• Mid-Term Projects (2025)• Long-Term Projects (2030) • Three Official Forums have been established for

CPEC: – Joint Cooperation Committee (JCC).– Joint Working Group (JWG). – Steering Committee

PROVINCE OF SINDH AND CPEC

By:MS. SOBIA MAZHAR

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• Second largest province of Pakistan in terms of population• Nearly 52 per cent of its population in the rural areas. • The rural-urban poverty gap in Sindh is high• The bulk of the rural population is said to be living below the poverty line

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ISSUES/PROBLEMS

• Employment opportunities are limited• Mainly agricultural sector• Safe drinking water• Sanitation facilities

– 31% of country’s rural population connected to the drainage system, in Sindh only only 14 %

– Only 10 per cent of them have access to proper sanitation facilities

Energy Sector - 10,400 MW

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Cont’d…..ENERGY SECTOR

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“Thar Coal is the future of Pakistan. The country’s energy security will depend on Thar

Coal.”

Younus DhagaSecretary W&P Islamabad

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• Thar Coal Power Project• Port Qasim Coal Fired Project• Wind Power Projects: Dawood Wind Farm (50

MW), UEP Wind Farm (100MW), Sachal Wind Farm (50 MW), Sunnec Wind Farm (50 MW), Pakistan Wind Farm (2X50 MW)

• Thar Mine Mouth Power Project By Oracle, Thar Sindh

Energy Projects of Sindh-CPEC

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Apprehensions/Reservations

Keti Bandar Port not Part of CPECKeti Bundar Port the Chief Minister Sindh

Syed Qaim Ali Shahnear to Thar Coal minespecial terminal

Acquisition Of Land

PROVINCE OF BALOCHISTAN AND CPEC

By:MR. ATHER NAVEED

CPEC - BALUCHISTAN

Gwadar Free Economic Zone – Generate Employment /

Economic activity

Construction of East-Bay Expressway, Gwadar Port

Pak-China Technical and Vocational Institute at Gwadar

Dredging of Berthing Areas and Channels, Gwadar Port

New Gwadar International Airport-Connectivity with world

Gwader Coal Power Project, 300 MW

HUBCO Coal Power Plant, 1320 MW

Gadani Power Park Project 1320 MW

Baluchistan’s Apprehensions-Root Cause

Poverty stricken areaInter Provincial confidence deficit Sub-Nationalistic elements Socioeconomic disparity Low human development index providesFailure of Successive Governments –

Federal/Provincial

Apprehensions about CPEC

Fear of Demographic changes.No share of local people in economic benefits of

project.Route Controversy-Pro Eastern tilt of federal

governmentDecisions in Multi-Party Conference (MPC):

Demand for Contract of Gwadar Mega Projects to province

Federal Government to adhere decisions taken in APC of 28th May 2015.

Route Controversy-GoB Stance

Decision of APC of May 28, 2015 on route must be completed on priority.

Modified Western Route should pass through: Gwadar-Turbat-Hoshab-Panjgur-Besima-Kalat-Quetta-Qila Saifullah-Zhob-Dera Ismail Khan-Mianwali-Attock-Hasanabdal- and upwards.Suggest two loops attached with Western Route:

Dera Ismail Khan-Sarghoda-Lahore to connect with the Lahore-Karachi Motorway.

Khuzdar-Ratodero-Sukkur to connect with the Lahore-Karachi Motorway.

PROVINCE OF KHYBER PAKHTOONKHWA AND CPEC

By:ZUBAIR AHMED CHANNA

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“This Government wont allow the China-Pakistan Economic Corridor to pass through the province if center denied the due share in its route to latter”

Pervez Khattak CM Khyber Pakhtoon Khwa

3rd January 2016 Dawn News

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“Pakistan does not look like a federation today as one province (Punjab) is dominating

others….”

Sikandar Hayat Khan Sherpao Qaumi Watan Party KPK3rd January 2016 Dawn News

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KPK Province and CPEC• Third most populous administrative unit• Hub of Renewable Energy Resources• Catchment area of main water bodies of country• 20% (600 km) of CPEC route (DIK to Pindi &

Abotabad to Chillas) crosses through KPK• Less than 5% route (Western Alignment) crosses

Punjab province• CPEC Crosses through under developed but

resource rich area of province (oil and gas reserves)

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CPEC Projects in KPK

• Total 31 projects shortlisted in CPEC (US $45.65 Bn)

• Only two projects for KPK– Thakot-Havelian section of Karakoram Highway (US $

0.93 Bn)– Suki Kinari Hydro Power Project (US $ 1.8 Bn)

• Only 5% of total cost being spent in KPK

Reference: Ministry of Planning Division Islamabad

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CPEC Route in KPK

Reference: Planning Department Govt of KPK

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GRIEVANCES/APPREHENSIONS

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Low Share of Province

• Out of 30 Project-Early Harvest Phase only 02 projects for KPK

• Only 9% of US $27.65 Bn

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Low Priority to Hydro Power Projects

Sourceof Energy

Per UnitCost (MW)

Timefor Completion

Operatingcost

Hydro Power 3 Million US $ 4-8 Years Rs 1 Per Unit

Thermal 1 Million US $ 1-2 Years Rs 7-8 Per Unit

Coal 1 Million US $ 1-2 Years Rs 7-8 Per Unit

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Route Controversy

• Controversy started when a federal minister supported Eastern Route.

• NHA declared Western/Central Route as Priority Route

• KPK proposed inclusion of Fateh Jung, Jand, Karak and Kohat in the alignment

• New Proposed area-Oil Rich and Gas Fields

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Mega Projects Missed

• Missed Mega Projects of Socio-Economic Importance:– Sawat Motorway Project (Road)– CRBC (Irrigation of 250,000 acres land)– Shogo Sin & Shushgai Hydro Power Projects

(Energy)– Special Economic Zones in KPK ignored

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Lack of Information Sharing

• MoUs / Agreements inked so far not shared• No consultations while prioritizing project • Repayment schedule of loans not disclosed• Impact of loan on Debt to GDP ratio not

disclosed / debated

EFFORTS TO SCUTTLE THE MEGA PROJECT

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• History is witness Kalabagh Dam, Bhasha Dam• KPK assembly adopted a resolution• Certain NGOs, Think Tank

• Plight of masses• China’s imperialist designs

• ANP , BNP, JUI,PTI• Nationalists

• control over resources,• minority

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• Thorn in the paw for the Adversaries of Pakistan

• India, USA, UAE• Sudden upsurge in acts of terror

• 49 personals including 33 FC Personals and policemen

• Security issues• Separatists groups• Baluchistan Liberation Army and Jundallah, which have carried out bombings.• Azad Kashmir, foreign hostile agencies

SOCIO ECONOMIC IMPACT OF CPEC

By:MR. NAVEED REHMAT

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S# SectorPunjab

(No./US$ Bn)

Sindh(No./US$

Bn)

KPK(No./US$

Bn)

Baluchistan(No./US$

Bn)

AJK(No./US$

Bn)

UMBRELLA(No./US$

Bn)

TOTAL(No./US$

Bn)

1 Energy 5/6.47 10/8.07 1/1.8 1/0.4 1/1.42 - 18/18.16

2 Transport 1/1.6 - 1/0.93 2/0.36 - 2/6.29 6/9.18

3 S&T 2/0.007 - - - - - 2/0.007

4 WatSan - - - 1/0.13 - - 1/0.13

5 Health - - - 1/0.10 - - 1/0.1

6 Trade - - - 1/0.06 - 1/0.06

7 Education - - - 1/0.01 - - 1/0.01

8 Others - - - - - - 1/18.004

TOTAL 8/8.077 10/8.07 2/2.73 7/1.06 1/1.422/6.2931/

45.65

Sector Wise Allocation

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Existing Socio-economic Conditions of Areas Under CPEC

• Terrorism/Insurgency in all provinces especially K-B • Joblessness• Poverty• Poor Infrastructure• Poor communication means• Lack of Basic Facilities especially in Baluchistan

– (Health Education, Water, Sewerage and personal Hygiene etc.

• Lack of Energy

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Impact of CPEC

• Investment

• 30 projects worth US $ 27.73 bn in the Early Harvest Phase

• Total FDI since 1970 = CPEC Invst in next 15 years

• Infrastructure

• Production

• Allied economic activities

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• GDP

• Unemployment

• Income level - Per Capita Income

• Poverty

• Better education, health

• Standard of Living

• Human Index

Impact CPEC

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• Development of Gwadar• Industrial Sector• Special Economic Zones• CPEC has opened vista of great opportunities

for Pakistan • Every province will be beneficiary• Baluchistan and KPK will have more benefits

Impact CPEC

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• Corridor needs to be economic not purely strategic for one partner

• Cost – benefit analysis• No political or personal whims• Negotiations to employee as many locals as possible• Indigenous Financing • Tax base• Banking System• Transparency

CHALLENGES

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RECOMMENDATIONS

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• Consistency and continuation on NAP• Investment conducive environment• Frequent meetings of Steering Committee to

address grievances• MoUs/Agreements to be shared with

Stakeholders• Firm commitment by all parties in support of

CPEC• Defend project on International Fronts

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IMPLENTATIONS STRATEGY

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S. No Activity Responsibility Resources Time Period

Outcome

Financial HR Technical

1 De-Politicization

Federal Govt/Parliament

- - - One Year

CBM

2 Unequal allocation of Funds

Ministry of finance and Planning

One Year

Reprioritization of projects and fixation of DLIs

3 Absence of Authority at Provincial Level

Ministry of Planning Division

- - - One year

Separate PMIUs at Provincial Level headed by ACS

4 Projects of less importance placed at early harvest phase

Ministry of Planning

- - - One year

Reprioritization:-Roads-Port Dev-Energy-Economic Zones-Allied Facilities

SHORT TERM IMPLEMENTATION PLAN

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S. No Activity Responsibility Resources Time Period

Outcome

Financial HR Technical

1 Security LIAs, IAs, Local Administrtion

- - - 3 years

Investment Friendly Environment

2 Cost Effective and Environment Friendly Energy Projects not on priority

Ministry of Planning/ Water & Power

- - - 3-5 years

Hydel and Renewable energy projects to be given priority

3 SEZs in Small Provinces

Ministry of Planning /Finance

- - - 3-5 Provinces to shortlist SEZs at strategic location of CPEC

MEDIUM / LONG TERM IMPLEMENTATION PLAN

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CONCLUSION

"The new Peking Man has a singular goal - to double, triple and quadruple China's $4

Trillion GDP by 2050. And, any country that can help China go where it wants to go is a

friend - or you are on your own.”

ANALYSIS OF THE CPECAROOJ NAVEED PhD CANDIDATE

SOUTH ASIA VOICES

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MOBILE APPLICATION-CPEC POL SURVEY

Thank You

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# Sectors/ProjectsNo. of

ProjectsInvestment

(US $ Million)Output

Sector Wise Allocation

Source: Ministry of Planning, Development and Reforms http://www.pc.gov.pk/?page_id=5352 Accessed on 28 Feb, 2016

1 Energy 24 34413 17045 MW

2Transport and Infrastructure (Roads)

2

6100

832 km

3 Railway 2 3690 1736 km

4 Gwadar Port Projects 8 793 construction

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Others (Optical Fiber and Digital terrestrial Multimedia Broadcast-DTMB)

02 44 developemnt

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PROBLEM Solution Implementation Strategy1) Politicization Confidence Building

Measures (CBMs)Sharing of Information with Stakeholders

2) Unequal Allocation of Funds

Reprioritization of Projects and fixation of DLIs

Release of funds on successful completion of DLI

3) Absence of Authority

Establishment of PMIUs at Provincial level

Devolution of authority by Min of Planning at Provincial level

4) Less Importance projects placed in early phase

Reprioritization of Projects in consultation with Prov.

Prioritize projects as:• Road Infr Structure• Port Development• Energy Projects• Economic Zones• Other Projects• Railway Network

5) Law and Order and Security Issue

Elimination of terrorism /CBM with local populace

Empower LEAs and IAs. Employment avenues for local population

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PROBLEM Solution Implementation Strategy

1) Cost Effective and Environment Friendly Power Project not included

EIA of all potential projects before implementation

Renewable Energy like Hydel/Wind may be given preference on Thermal

2) SEZs not given priority

SEZs in strategic location of CPEC route

SEZs to be included in third phase of CPEC or special PSDP allocation may be earmarked for provinces to establish SEZs

MEDIUM TERM IMPLENETATION STRATEGY