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CPEC and Energy Geopolitics in Asia

Posted on April 30, 2018 at 03:00 PM

The China-Pakistan Economic Corridor is a mega project of $64 billion economic corridors. It covers the development and Construction of power projects, roads, Gwadar port construction and other construction and infrastructure across Pakistan. China-Pakistan Economic Corridor is a part of Belt and Road Initiative (BRI) and it aims to fully facilitate China's access to the global markets due to emerging China in the market of global trade.

CPEC has a veritable flavour to generate fully coordination between both governments of Pakistan and China. CPEC got geopolitics attention towards Pakistan and China and in Washington and beyond its a frequent think tank seminars and the subject of analysis. It's a motivational factor which got true motivations behind China's move to invest so intensely across Pakistan.

The CPEC project is divided into three categories which are categorised as transportation networks, Trade and Special Economic Zones. Pakistani and Chinese governments focused on the energy sector to invest more than $33 billion to fight the shortfall of roughly 4500 MW till the end of 2018 by adding the 10,000 MW energy into the grid station system according to Early Harvest Program. Total seventeen projects of the energy sector are under construction in which eight projects are in Punjab, two projects shared between Punjab and Sindh, four projects in Sindh, One energy sector in KPK and two in Balochistan which is being constructed under EHP. The major resources of electricity include coal, hydropower, liquified natural gas, solar plants and wind power. The major bank financing the energy sector is China's Exim Bank.

So, it is the fair question that with the total investment of $33 billion in the energy sector is the major objective of CPEC. Ultimately, CPEC can affect regional energy geopolitics which depends on several questions that can't be answered conclusively.

I-How the labour and technology be obtained and deployed?

II-Are CPEC projects are financially sustainable?

III-Defined baseline infrastructure needed for the project development?

At this stage, four general discussions can be made

Indigenous Energy Projects:

Indigenous energy resources which are mainly coal and renewables would allow Pakistan to reduce and minimize the high dependence on oil and gas from the Middle East. These imported petroleum products account for whopping about 90% of Pakistan's fuel consumption and imported crude oil.

Iran Gas Pipeline:

Iran is interested to build the natural gas pipeline with Islamabad, but due to financial issues have prevented Pakistan from its deployment of the gas pipeline in Pakistan. China showed interest to finance under China Pakistan Economic Corridor and it emphasizes that generating more energy in Pakistan and it will reduce the imports of oil and gas from Saudi Arabia and it will be a net benefit for Pakistan and Iran.

India bitter enemy:

Third India is a bitter enemy of Pakistan and could suffer. One major China-Pakistan Economic Corridor (CPEC) to operationalize and develop the Gwadar port in Balochistan which is situated in Southern Pakistan which covers the Arabian Sea. So, China is the main strategic competitor which will gain more power and strong capacities into the Arabian sea.

CPEC and China-Pakistan-India energy geopolitics:

The fourth issue is the CPEC and a wider development of China-Pakistan-India energy geopolitics could get caught up a problematic issue between Iran and Saudi Arabia. Separatist seeking insurgents in Balochistan, Pakistan and anti-Iran militants based in Pakistan's carried out cross-border strikes into Iran. Iran directly accused Saudi Arabia and Pakistan of providing support to these insurgents. As well militants based in the Iranian province of Sistan which has a border with Balochistan are also a problem for Iran Chabahar port. Saudi's expressed fears that Chabahar port will empower Iran into the Persian Gulf and the Indian Ocean. This provides an assistance to anti-Iran insurgents in Sistan and Balochistan to Sabotage construction of Chabahar port. In 2016, Saudi Arabia has expressed support for such insurgents to overthrow the Iranian regime.

So summing up the discussion defines that deployment of CPEC, issues of energy geopolitics may not be as easy as concerns about the influence of China in Pakistan and Asia. And developments of energy projects is not so easy and it needs a great strategy. And another point which is more important than energy geopolitics is no less important worldwide.

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