Pakistan can’t afford turning CPEC into another KBD (Part II of II)

The following article has been published in Daily Nation, dated 25th May 2015

(E-Paper (Print Edition)http://nation.com.pk/E-Paper/lahore/2015-05-25/page-9)

(Onlinehttp://nation.com.pk/business/25-May-2015/pakistan-can-t-afford-turning-cpec-into-another-kbd-part-ii)

Pakistan can’t afford turning CPEC into another KBD (Part II)

By: Omer Zaheer Meer

Link to Part I (Published): https://omerzaheermeer.wordpress.com/2015/05/18/pakistan-cant-afford-turning-cpec-into-another-kalabagh-dam-part-i-or-ii/

PART II

CPEC is strategically very important for China as it imports 60% of its oil from the Gulf of which 80% is transported by ships travelling over 16,000 kilometers in approximately three months on average through Strait of Malacca to Eastern China. This existing route is not only longer but is ridden with regular attacks by pirates, bad weather and political rivals under American and Indian influence. So the strategic benefits to China can be categorized in four major areas:

  1. China is heavily dependent upon the oil from Gulf for its energy needs. China will reduce the transportation distance from 16,000 km to just 5,000 km resulting in huge economic savings and quicker business all around the year sans the threat of blockade by political rivals.
  2. China will gain access to the untapped markets of the energy rich Central Asian states and Afghanistan which are termed as the next big thing and “Gulf replacement” for coming century. With this early access, developed secure routes and trade ties China can not only secure its energy needs for the next century but place itself as the world leader re energy security by having taps on the future energy sources, a place currently held by the USA.
  3. China will be able to spread its economic development benefits to its lesser developed western areas including the troubled Muslim-majority region of Xinjiang. Furthermore with enhanced security co-operation with Pakistan and economic developmental gains, China hopes to curb its troubles in its underbelly.
  4. Last but not the least, CPEC will not only provide China with an opening to the world from its western side but also ensure that by having a potential naval presence at Gwadar, not only does it hold an additional sea-port but has the capability to blockade the oil supplies to any future adversaries. Any attempts to encircle China such as those currently pursued by USA would become futile in such a scenario.

The benefits to Pakistan are numerous too. Some of the major ones are as below:

  • Uplift and development of badly needed transportation, technical and energy infrastructure.
  • Economic development through industrial and commercial zones setup along the CPEC.
  • Potential to earn billions of $ in transit fees, cargo handling and transportation charges.
  • Becoming economic connectivity hub for the entire region and beyond.
  • Security benefits of Gwadar port as outlined above.
  • With enhanced security ties with China and the economic developmental benefits, Pakistan also expects of stemming out the terror in lesser developed areas of Balochistan and KPK.

Considering all the significant benefits and strategic potential of the CPEC it was unfortunate that it became controversial. The controversy is two pronged. There are those who genuinely felt that the economic benefits of the CPEC were moved away from their provinces to Punjab, being the political constituency of the incumbent Government. However, there are also efforts led by India to disrupt the CPEC as is evident by the recently created desk at RAW with initial allocation of $ 3 billion for this purpose. Furthermore by signing accord to develop Chahbahar port with Iran, India has aligned Iranian interests with itself too. Moreover UAE’s interests also clash with Pakistan’s as the success of CPEC will render Dubai port an invalid. Furthermore, the strategic great game means that USA would rather not have it to see CPEC successful.

None of the external efforts would have been and can be successful without some genuine internal dissent though. Unfortunately the lack of transparency and undue secrecy around the CPEC allowed the propaganda as well as the genuine concerns to grow. Moreover the eastern route was the most talked about during the Chinese President’s visit to Pakistan, further raising concerns of depriving smaller provinces of their due. Absence of KPK, Sindh and Balochistan CM’s while CM Punjab was in attendance didn’t help the situation either. Therefore, KPK Assembly passed a resolution demanding the original route to be retained while Balochistan Assembly’s resolution demanded clarification on CPEC benefits to provinces from the federation. ANP then convened an “all parties’ conference” pressing the controversy and concerns forward.

Though late but some positive steps were taken. A meeting of the leaders of all parliamentary parties was convened to enlighten them on CPEC but the “Safora Goth” tragedy overshadowed the effort. However, the meeting didn’t address concerns with regard to greater transparency as little is revealed regarding the technical and financial parameters of the CPEC projects. The funding sources were also clouded in mystery but it now seems that most of the “investment” is in the form of soft loans with Chinese firms to execute several projects. Federal Minister for Planning and Development Mr. Ahsan Iqbal has claimed that all routes of CPEC are being worked at simultaneously and the western route will be the first one operational. Similarly he has claimed that Sindh and Baluchistan will be the biggest beneficiaries of power generation under CPEC with 36% and 26% shares respectively.

The government should use media to educate masses about the above claims as well as share why the alternate routes were developed. Was it to ensure connectivity across the country with developed areas, out of Chinese concerns for safety of passage in case of trouble on the route via Balochistan (as mentioned by some Chinese scholars in their write-ups in international media), to cater for the huge trade volume expected or some other reasons? Also more transparency such as clarifying that why the current PSDP contains allocations under CPEC only for the eastern route and not the others will help dispel the concerns and negative propaganda. CPEC is a game changer for Pakistan and the Government has the responsibility to ensure its successful completion. Pakistan cannot bear the potential loss and the dire consequences of CPEC turning into another “Kalabagh Dam”.

The author is Director of the think-tank “Millat Thinkers’ Forum”. He is a leading economist, CFA Charterholder, experienced fellow Chartered Certified Accountant and anti-money laundering expert with international exposure who can be reached on Twitter and www.myMFB.com @OmerZaheerMeer or omerzaheermeer@hotmail.co.uk

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Pakistan can’t afford turning CPEC into another Kalabagh Dam (Part I of II)

The following article has been published in Daily Nation, dated 18th May 2015

(E-Paper (Print Edition)http://nation.com.pk/E-Paper/lahore/2015-05-18/page-9)

(Onlinehttp://nation.com.pk/business/18-May-2015/pakistan-can-t-afford-turning-cpec-into-another-kalabagh-dam)

China Pak Economic Corridor: way forward (Part I of II)

By: Omer Zaheer Meer

PART I

The biggest gift of nature to Pakistan besides all kinds of terrains and weather as well as hardworking young manpower is its strategic location. In this context the strategic significance of Gwadar adds to this dimension of Pakistan’s international importance. Gwadar is a strategically located area on the shores of the Arabian Sea just outside the Strait of Hormuz. It is situated near key shipping routes of global oil transportation with the surrounding areas having two-thirds of global oil reserves. Furthermore it is the closest warm-water port to landlocked Central Asian region and Afghanistan, both rich in untapped natural resources and economically undeveloped with huge potential. As if that was not enough, from a military standpoint, Gwadar is located at the eastern bay of the key passing which if blocked by a strong naval force, can cut off the oil supplies to any adversary with dire repercussions as any military expert will testify.

Before moving ahead on the core matter of China Pakistan Economic Corridor (CEC), let us briefly visit the history of Gwadar. Pakistan identified Gwadar as a site for its future port in 1954 when it was still under the rule of Oman. Government of Pakistan successfully negotiated with the Sultanate of Oman and purchased the enclave in the fall of 1958, ending a 200 year Omani rule of the small undeveloped fishing town. It wasn’t until 1977 that Gwadar was made a part of Balochistan by the Federal Government of Pakistan. Currently it has a population of approximately 85,000 people as per most studies.

Now moving onto CPEC, it is a mega project worth $ 45.6 billion, to connect Gwadar port with Northwestern China (Xinjiang) via Khunjrab (the last connecting point on the Pakistani side) along with development and uplift of transportation, energy and technical infrastructure in Pakistan. A network of road and rail links besides energy pipelines are envisaged.

There are three land routes planned to link Gwadar to Xinjiang in addition to a long-term “route adjustment link”. The three main routes are outlined below:

  1. The “original”, shortest and most popularized route passes through Quetta, Zhob, D.I.Khan and Peshawar. It is termed as the “western route” and is just over 2400 km long.
  2. The second route passes through Ratodero, Sukkuar and the Indus Highway.
  3. The third route which has stirred up the controversy actually passes through Sukkur and Karachi in Sindh and then via Lahore and Peshawar to connect with Khunjrab. This is termed as the “eastern route”.

All the routes are envisioned to be interconnected with industrial and commercial zones along the routes at key sites.

CPEC updatedFurthermore other major projects that are part of the CPEC are as below:

  •  320-kilometre-long Sukkur-Multan motorway
  • 120-kilometre-long Thakot to Hawalian road
  • upgradation of Karakoram Highway
  • 19-kilometre-long Gwadar port East Bay Expressway Project
  • development of Gwadar itself
  • building Gwadar airport
  • upgradation of Karachi – Peshawar “Main (Railway) Line”
  • commission of armed division (Economic Corridor Support Force) for security of CPEC
  • Havelian Dry Port
  • Orange Line Metro (Lahore)
  • Port Qasim 2x660MW Coal-fired Power Plant
  • 720MW Karot Hydropower Project
  • Zonergy 9×100 MW solar project (Quaid e Azam Solar Park) in Punjab
  • Jhimpir wind Power project
  • Thar Block II 2x330MW Coal Fired Power project
  • Hubco Coal-fired Power Plant Project
  • Gwadar-Nawabshah LNG Terminal and Pipeline Project
  • China-Pakistan joint cotton bio-tech laboratory
  • Cross-border fibre optic data communication system project, a digital terrestrial multimedia broadcast pilot project at Murree
  • Development of Private Hydro Power Projects, e.t.c.

As can be seen from the above non-exhaustive list, a lot of the projects are related to developing energy and technical infrastructure in Pakistan in addition to the transportation infrastructure projects. Infact more than 70% of the $ 45.6 billion is expected to be spent on these projects. However it is the transportation infrastructure that caught most attention due to its long term strategic significance, revenue generation and potential to be the game changer for the region.

to be continued next Monday  ……

The author is Director of the think-tank “Millat Thinkers’ Forum”. He is a leading economist, CFA Charterholder, experienced fellow Chartered Certified Accountant and anti-money laundering expert with international exposure who can be reached on Twitter and www.myMFB.com @OmerZaheerMeer or omerzaheermeer@hotmail.co.uk

PTI, PAT vs PML-N: Sagacity in short supply

The following article has been published in the Sunday Edition of Pakistan Today, dated 24th August 2014
(For online version: http://www.pakistantoday.com.pk/2014/08/23/featured/pti-pat-vs-pml-n-sagacity-in-short-supply/ )

(For Published Version, Page 9:   http://issuu.com/abidoon/docs/dna_issue_38/9?e=3820687/9038422 )

PTI, PAT vs PML-N: Sagacity in short supply

Take the third umpire’s advice seriously

Prof Dp

By: Omer Zaheer Meer

The author is a Director of the think-tank “Millat Thinkers’ Forum”. He is a leading economist, qualified accountant and anti-money laundering expert with international exposure who can be reached on Twitter and www.myMFB.com @OmerZaheerMeer  or omerzaheermeer@hotmail.co.uk

A small problem that could’ve been resolved easily has been turned into a national crisis. It’s often said that to understand complex issues one should go back to the root-cause of the problem. The current political crisis began with Imran Khan’s very reasonable demands of investigating four selected constituencies for rigging and taking corrective action for the shortcomings. The government logically asked for same number of PTI won constituencies to be investigated too and Pakistan Tehreek-e-Insaf (PTI) readily agreed to that. Unfortunately there had been no concrete development on the issue since which has led to the stance of PTI getting much more stiffer with the ultimate demand now of PM Mian Nawaz Sharif’s resignation and mid-term polls under a reformed Election Commission after the alleged “culprits” of rigging in 2013’s General Elections are punished.

The government on its part was worried that if there were any issues to be found in the four constituencies, it may lead to the calls for mid-term polls as the legitimacy of the set-up would be called into questions. However the crisis has lead to exactly that situation and this could’ve perhaps been averted had the Government took positive actions before. What’s been interesting is the changing narrative of the incumbent Government which claimed that it was not authorized to and cannot open up the four constituencies after Chaudhary Nisar, the Federal Minister for Interior agreed to open up “40 constituencies” in National Assembly. However as the crisis peaked, the same Government proposed asking Supreme Court for forming a commission to investigate the allegations of rigging while there were also proposals of bringing “Ordinance” to open up the four constituencies initially selected for audit and verification by Mr. Imran Khan’s PTI.

Certain quarters claim that atleast some of the four key ministers, Speaker National Assembly Sardar Ayaz Sadiq, Federal Minister for Railways Khawaja Saad Rafique, Federal Minister for Planning and Development Mr. Ahsan Iqbal and Federal Minister of Defense Khawaja Asif did not wish to let their “victories” be examined and as such used their influence to push the PMLN Government to a harder line by selling the above narrative within PMLN in order to ensure their own seats were not in danger.

It wasn’t as if the pressure of the campaign re four constituencies by PTI was sufficient to bring matters to the current boiling point. If we recall, things were actually looking quite comfortable for PMLN Government until that fateful incident of Model Town slaughter. Operation “Zarb-e-Azb” was announced, differences with Military Establishment were substantially reduced, public opinion was against protests during such an important operation, PTI had already announced cancellation of its Bahawalpur Jalsa while Pakistan Awami Tehreek (PAT) was about to do so. Than somewhere, someone decided to “teach a lesson” to Mr. Qadri and set an example for opposition as accepted in less straighter words by ex-Minister for Law (Punjab) Rana SanaUllah during television programs. However the operation on Minhaj-ul-Quran cum PAT secretariat to remove barriers backfired and gave blood of unarmed civilians to the opposition. From there on, the anti-government movement gained momentum culminating into “Azadi” and “Inqilab” marches.

That momentum should make one wonder that how the opposition lost the steam going into the marches. PAT was always going to be the determined religious cult beefed up by the Minhaj associated youth and workers. It was PTI who was deemed the bigger player, the game-changer on its own. However over the past eight days what we’ve witnessed, though unprecedented in terms of the determination and zeal shown by PTI supporters, has left many surprised by a less than expected show of power by PTI. So let us examine what exactly went wrong?

Firstly the administration was ill-planned and organizational communication minimal if any. The arrangements were redundant. Several PTI’s office bearers left Islamabad on 15th owing to a lack of even basic arrangements, non-presence of party representatives/organizers and no-communication from party as to the expected arrival of the main procession led by Imran Khan. A prime example of the mismanagement was that despite the extreme weather forecast, the organizers didn’t bother to arrange for even a basic and cheap item like umbrellas which would not only have protected the participants from elements but also provided shade and sense of safety without the need to hold sticks. Furthermore post the infamous intra-party elections, the losing party workers who are in majority as only one of the five to ten contestants won, feel disgruntled. This majority was not taken on board or reached out to. As a result they didn’t attend or work for the success of the “Azadi March” nor did they ask their supporters to do so.

Against all mainstream analysis and despite all the internal setbacks and unprecedented failure of march organizers, Imran Khan’s own determination, resilience and charisma has done wonders in not only getting a very decent number of supporters out but motivating them enough to stay on the streets for an unprecedented eight days till now. Most of the analyst believed that PTI’s supporters were too soft to stay on roads for long and that too in extreme weather conditions. However the determination of highly motivated PTI cadre has been no less than PAT’s religious zealots.

This whole situation, however, has serious implications for the country. The pride and stubbornness of the Government has resulted in missing key moments for resolving the conflict. For fourteen months PTi kept asking for audit of just four constituencies which was ignored, the deadline by Imran Khan during Ramadan was also brushed aside and more foolishly instead of capitalizing on an initially weak show by PTI on arrival in Islamabad, PTI by mocked by key ministers of PMLN. PTI has since gained much of the lost ground. Khan has now repeatedly stated that he won’t accept anything sans PM’s resignation while PM is as likely to resign as Imran is of backing off his own words. The negotiations ended in cruel joke when Government suddenly decided to put up containers back and IG Islamabad was transferred for allegedly refusing to use force on protestors.

While PMLN rightly states that majority of the parliamentary parties are on its side, this stalemate virtually melting down the economy cannot go on forever. If this situation is not resolved amicably, the army will intervene which may even lead to wrapping up of the whole system. The responsibility for such a disaster would lie more with the incumbent government as not only it has the power, authority and responsibility but also more on stake than the protesting parties. It should therefore act more magnanimously to accommodate rather than ridicule PTI and PAT. Letting loose its own workers would only exacerbate the situation more. As the “third umpire” recently said let sagacity and maturity prevail.

Qadri Saga: Who Won?

This article has been published in the Sunday edition (DNA) of Pakistan Today, dated 29th June 2014

(For online version: http://www.pakistantoday.com.pk/2014/06/28/comment/qadri-saga-who-won/ )

(For published version: Page 8 at http://issuu.com/abidoon/docs/dna_issue_30.compressed?e=3820687/8427707 )

 

Qadri Saga: Who Won?

More than meets the eye

By: Omer Zaheer Meer

The author is a leading economist, a qualified chartered accountant and anti-money laundering expert with international exposure who is helping reshape businesses at Millennium Law Company. He can be reached on Twitter and www.myMFB.com @OmerZaheerMeer or omerzaheermeer@hotmail.co.uk

Pakistan is often said to be the most ‘happening’ country on the planet. The last couple of weeks have been remarkable even by Pakistan’s standards. There was a daring attack exploiting security failures at the Karachi Airport followed-up by valiant sacrifices to eliminate the attackers leading to a much awaited operation in North Waziristan, which seemed ill-planned for tackling the fall-out particularly the IDP’s. As if that was not enough, there was a brutal police assault on civilians at Minhaj-Ul-Quran headquarters in Lahore followed by Dr Tahir-Ul-Qadri’s return to Pakistan. The focus of this article is on the behind-the-scene story of the Minhaj assault and who gained the most from the fall-out.

Having announced the operation in North Waziristan a day after American Congress tied Pakistan’s aid to the same, the incumbent government was sitting pretty politically. The country was at war after-all and public sentiment was high following the Karachi airport assault. No political party could afford to agitate anymore and with Ramzan looming ahead it seemed at least a couple of months of total political stability were at hand. The impact of this “maneuver” was clear. PML-N government was able to satisfy both the army and America by supporting the North-Waziristan operation, while at the same time realizing that being bogged down there would mean the army would be less able to intervene. Similarly, public sentiment ensured that all parties had to rally behind the national armed forces that were in a war now. To agitate now or question would be perceived as an anti-state act.

Having announced the operation in North Waziristan a day after American Congress tied Pakistan’s aid to the same, the incumbent government was sitting pretty politically. The country was at war after-all and public sentiment was high following the Karachi airport assault.

The people’s opposition leader Imran Khan had to call off the 22nd June public gathering, while the lone ranger Shiekh Rasheed cancelled his train march. The pressure on Qadri to postpone his “revolution movement” and impending return on 22nd June was getting tougher by the day. PPP was already seen to be following the alleged agreement of taking full turns with PML-N in the name of saving the system. It seemed the incumbent government did not have a single serious political worry in the world and could concentrate fully on its business.

But it was not to be. PM Nawaz Sharif went on a short foreign tour. Meanwhile an operation, which with the benefit of hindsight can be termed as not only ill-planned and ill-timed but simply madness, was ordered to “remove illegal barricades outside Minhaj-Ul-Quran’s headquarter and Qadri’s residence”. The timing to remove the barricades, which had been there for five years per some accounts, raised questions. But what stunned the nation was the ferociousness of the assault, which ended up taking 11 lives to date with around a hundred injured. The now infamous icon “Gullu car smasher Butt” was also a by-product of the same operation.

CM Punjab, Shabaz Sharif, whose media team has crafted an image of a successful, hands-on and in-control chief minister, immediately announced about his ignorance of the operation. He went to the extent to claim that despite his orders twice, the police did not disengage. The question on everyone’s mind was and still is that how can such an operation be executed in Lahore and that too in the CM’s neighbourhood without his knowledge?

Not many people know that Shahbaz Sharif is not the person he used to be. Serious illnesses and a heart condition means he has to rely on a trusted troika comprising his son Hamza Shahbaz, Rana SanaUllah and Dr Tauqeer Shah (his ex-PS) to run Punjab. While it seems far-fetched that the police would dare to disobey his clear orders to disengage, it is possible that the orders may not have been communicated timely.

Not many people know that Shahbaz Sharif is not the person he used to be. Serious illnesses and a heart condition means he has to rely on a trusted troika comprising his son Hamza Shahbaz, Rana SanaUllah and Dr Tauqeer Shah (his ex-PS) to run Punjab.

The popular theory doing rounds is that Sharif was totally aware and in command of the whole operation undertaken to teach Qadri a “lesson” to avert his return to Pakistan. Moreover, it is believed that the “sacrifice” of Rana SanaUllah and Dr Tauqeer is a temporary measure to cool public sentiment while taking the heat off the CM. The basis of this is the same image created by CM’s PR team which has benefitted him and PML-N a lot over the years. The image effectively communicates that not a leaf can move without his knowledge and consent in Punjab, that he is always in control and that he’s there 24/7.

There is an alternate but lesser known version. As per this version the troika or at least two of them planned and authorised the operation at Minhaj to scare off Qadri and his supporters. The CM was not totally aware of the exact plan as it was masked as a “routine” operation against “encroachments”. The plan was for a quick assault to thrash and did not expect the kind of resistance experienced. The media factor was also discounted.

This alternate version is based on the fact that ever since his heart-treatments Mr. Shahbaz Sharif has relegated most of his duties to his trusted troika. Also he’s no more the 24/7 and always in control CM he used to be. Mr. SanaUllah and Mr. Tauqeer had before too strived for his pleasure and brownie points by taking initiatives on their own due to the trust earned over the years. This is also supported by the confidential reports that during the meeting of the PM with CM and IG Punjab the latter presented evidence including call logs implicating Dr. Tauqeer while Rana SanaUllah has been the public face of the operation.

What exactly happened that fateful day may never be known. But whatever the exact truth, two things are pretty clear. The first is that the PML-N government once against shot itself in the foot and undid the perfect maneuver of its leader PM Mian Nawaz Sharif. The second is that the army seemed to be the one who gained the most out of this as not only is the political government is on the defensive now but the public and media attention was taken off the unfortunate misery borne by hundreds of thousands of IDP’s who migrated from North Waziristan.

As the FIA directed to investigate money-laundering allegations against Qadri, the drop-scene of his much-hyped arrival makes it clear that he is on the losing side too, apparently having served his purpose for now. The important question to ponder for all is whether there could be more to this incident than meets the eye, perhaps pointing in the direction of the ongoing civil-military power tussle?