CPEC Current Affairs
Pakistan has invited Saudi Arabia to join $50 billion China-Pakistan Economic Corridor (CPEC) as the third strategic partner. Formal request in this regard was made after Pakistan Prime Minister Imran Khan visited Saudi Arabia during his first foreign trip after getting elected.
Saudi Arabia is first country that Pakistan has invited to become partner in CPEC. Pakistan’s main interest in inviting Saudi Arabia in CPEC is to ensure huge investment from cash rich gulf country. This invitation comes after Pakistan concern over rising debt levels have especially due to unsustainable loans from China for CPEC projects, compromising cash-strapped Pakistan’s sovereignty.
Projects as part of CPEC in which Saudi Arabia will be investing will be smoothed out during visit of Saudi Arabia’s Finance and Energy Ministers to Pakistan in the first week of October 2018. During this visit, Pakistan and Saudi Arabia will also finalise important economic partnership.
Note: Saudi Arabia has long history of financially bailing out Pakistan during economic crisis. Saudi Arabia had loaned Pakistan $1.5 billion in 2014 to strengthen its rupee currency, six months after Pakistan obtained its last IMF bailout.
China-Pakistan Economic Corridor (CPEC)
CPEC is flagship project as part of China’s multi-billion dollar Belt and Road Initiative (BRI), aimed at enhancing China’s influence around the world through China-funded infrastructure projects. CPEC aims to construct and upgrade transportation network, energy projects, deep-water port at Gwadar and special economic zones (SEZs) to eventually support Pakistan’s industrial development as manufacturing hub by 2030. CPEC will linking Gwadar in South Western Pakistan to China’s North Western region Xinjiang through vast network of highways and railways. The proposed project is financed by heavily-subsidised Chinese loans, disbursed to Pakistan Government by Chinese banking giants such as China Development Bank, Exim Bank of China and Industrial and Commercial Bank of China.
India will skip the two day grand OBOR summit organised by China to showcase its plans to build a network of trade routes under the One Belt, One Road (OBOR). OBOR is an ambitious China’s ambitious development strategy and framework that aims to boost its connectivity and trade that will that will connect Asia, Africa, the Middle East and Europe. It was proposed by Chinese President Xi Jinping in 2013.
The summit is expected to be attended by nearly 65 countries. However, only 20 heads of state is expected to attend the summit. The US and Japan who were initially reluctant to attend the summit have decided to send a representative at the last minute. India, however, has refused to send any representative owing to sovereignty concerns related to the China-Pakistan Economic Corridor (CPEC).
The countries like Russia, South Korea, France, Germany and UK will send either ministerial or official delegations to the summit. As far as india’s neighbours are concerned, Pakistan is sending the largest delegation consisting of four chief ministers and five federal ministers. Others like Sri Lanka, Bangladesh, Nepal and Maldives will also have official representations. Bhutan will not participate as it has no diplomatic relations with China.
China-Pakistan Economic Corridor (CPEC) which is a 3000 km project connecting Pakistan’s deep-water port Gwadar and China’s Xinjiang falls under the OBOR initiative of China. The CPEC passes through Gilgit-Baltistan region of the Pakistan-Occupied Kashmir. The Chinese presence in the disputed region has raised sovereignty concerns for India. The Gwadar Port offers China to have its naval presence in the Arabian Sea and to the Indian Ocean. Already, China has plans to station its marines in Djibouti in Horn of Africa in Indian Ocean. The other projects under the OBOR in South and South East Asia also have security implications for India.
Unlike India, none of the other countries have sovereignty related issues with OBOR initiative.