Pakistan and
China expand economic dimension of their ties: Dar
ISLAMABAD: Finance Minister
Mohammad Ishaq Dar has said that Pakistan and China have greatly expanded the
economic dimension of their relationship as a key priority.
The China-Pakistan Economic
Corridor (CPEC) was a flagship initiative in this regard which would speed up
economic cooperation and connectivity, he said in an interview withh CCTV NEWS
(China).
“We have several
institutional mechanisms in place such as Pakistan-China FTA and the Pakistan
Joint Economic Committee as well, which would boost trade and investment in the
years to come.”
Ishaq Dar said that two
countries had upgraded their strategic partnership to an “All-Weather Strategic
Cooperative Partnership”, formalized in the joint statement issued during the
visit of Chinese President Xi Jinping’s to Pakistan.
The political
leadership-level interaction had increased, which would of course further
deepen this relationship, he remarked.
Highlighting the
significance of Asian Infrastructure and Investment Bank (AIIB), the minister
said that the bank would provide financing support to developing countries in
Asia, including Pakistan, for infrastructure development in order to promote
regional connectivity.
“We believe that the bank
will be an important platform to convert the abundant savings available in the
region into investment to help regional economies to achieve sustainable and
rapid development thereby contributing to the world economy,” he added.
The minister said that
Pakistan had been supporting the initiative right from the initial announcement
for the establishment of AIIB.
The bank, he said, would
provide additional financing to support the establishment of infrastructure
projects, including construction of roads, dams, power projects etc.
He expected that the bank
would cooperate with the existing multilateral development banks by providing
co-financing for the development of infrastructure projects in the member
countries.
However, he said that the
bank would also aim to be leaner and faster than the existing institutions and
it would provide some healthy competition.
The AIIB, he added, would
distinguish itself from other multilateral development banks (MDB) like the
World Bank (WB) and the Asian Development Bank (ADB) because MDBs major focus
was on poverty reduction while the AIIB would focus on infrastructure
development and regional connectivity.
Ishaq Dar said,”A regional
bank provides an excellent framework for decisions about projects and
financing, particularly those with cross-border implications at regional
level.”
Pakistan, he said, had
always extended support to China at regional and international fora.
“We believe this is another
of China’s sincere efforts to help out developing countries that are left out
of the race for economic development otherwise due to lack of support from
international financial institutions,” he added.
He said the banks, which had
been previously shouldering responsibilities for lending, were already
overburdened and therefore, there had to be some new institution that could
come in handy at this critical juncture.
Infrastructure development
and poverty alleviation was needed for nations like Pakistan in Asia to
ward-off the dangers of extremism and “I think AIIB is a hope for all of us in
Asia,” he noted.
Replying to a question about
China-Pakistan Friendship Year, Dar said that Pakistan-China friendship was
all-weather and time-tested.
“It is an evergreen
relationship that has its roots in the hearts and minds of the people of
Pakistan and China. It has been the constant endeavour of our government to add
more depth and breadth to this all-important relationship,” he added.
As strategic partners, he
said, Pakistan and China had always enjoyed excellent cooperation across a
diverse range of areas and sectors.
However, he said,”Our two
governments have placed a special emphasis on enlarging the economic footprint
of this relationship. We believe that the peoples of both countries should
enjoy the fruits of this special relationship.”
As a result, he added, both
the countries were cooperating on a number of people-centric projects.
The highlight of these
projects, of course, was the China-Pakistan Economic Corridor (CPEC), which “we
regard as a game changer for our countries as well as the region at large,” he
said.
Dar said that the Corridor
and its related projects would deliver jobs and prosperity to millions of
people in both countries.
Replying to another question
regarding Chinese President’s visit to Pakistan in April this year, he said
this was President Xi Jinping’s first visit after assuming office in March 2013
and the first by a Chinese President since November 2006.
“This visit was the hallmark
of “Pakistan-China Year of Friendly Exchanges: 2015″.
The highlight of the visit,
he said, was the signing of over 50 agreements/ memorandums of understanding
relating to key development projects in infrastructure, energy and
communication sectors, under the umbrella of the China-Pakistan Economic
Corridor (CPEC) in the governmental and private sector.
Important agreements
relating to areas of cooperation outside the CPEC were also concluded, which
would go a long way in changing the destiny of the people of the two countries,
he added.
Ishaq Dar said that the CPEC
was being conceived as a lynchpin of plans by both China and Pakistan to deepen
their economic cooperation.
Early implementation of the
CPEC would be transformational for Pakistan’s economy and dovetail perfectly
with China’s strategy of developing its inland and western regions, he added.
He said that China’s
interest in the project was also strategically driven by President Xi Jinping’s
visionary concept of integrating regions and countries across the globe under
the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative.
“It envisages deepening
policy coordination amongst countries and regions, extending and improving
infrastructure connectivity in all its forms – road, air, sea, rail,
telecommunications, energy etc. – across regions, fostering trade and
investment flows and, last but not the least, enhancing people to people
connectivity. The CPEC fits naturally into this vision of a `Road and Belt’
with Gwadar and Karachi serving as its southern nodes and an outlet to the
Arabian Sea and the Persian Gulf,” he added.
The minister said that
regional and sub-regional economic integration as a means to bolster growth,
investment and trade in countries had a long chequered history.
However, he said, the recent
history of regional economic integration had had some unmistakable successes.
In fact, this had been one
of the major successful developments after the Second World War, he added.
Ishaq Dar said that the
regional integration in Europe brought success in terms of regional growth,
economic development, investment and trade and more importantly fostered peace
in the region.
“Hence Asia can also benefit
by following the same pattern. In this respect, the Corridor can provide an
integrating platform for over three billion people in Central, West and South
Asia, the Middle East and Africa regions”, he added.
He said that the increase in
trade, investment, digitalization and financial flows would bring peace and
prosperity to the region through enhancement in the competitiveness of the
economies of the countries, contribute to reducing regional disparities and
social inequality, and improve life expectancy and quality of life in every
country and in the region.
Thus in real terms, he
added, it could re-open the economic artery blocked for years as said by my
Chinese brother.
“This shall become even more
relevant when we look at future forecasts that Asia and Pacific region’s share
in world GDP between 2010 and 2050 is expected to rise from nearly from 28 to
more than 52 per cent, with China accounting for 20 per cent and India for 16
per cent,” he remarked.
Replying to yet another
question, Ishaq Dar said that Pakistan had always been upfront and committed
towards the issues dear to China’s core interests matching the consistent
support, friendship and cooperation provided by both countries to one another.
President Xi Jinping, he
said, had provided a visionary concept of integrating regions and countries
across the globe under the Silk Road Economic Belt and the 21st Century
Maritime Silk Road Initiative representing a new model of regional and
South-South cooperation, which would offer new opportunities for Asia’s
rejuvenation and the common prosperity of all countries.
Dar said that it envisaged
deepening policy coordination amongst countries, extending and improving
infrastructure connectivity in all its forms – road, air, rail,
telecommunications, energy etc. – across regions, fostering trade and
investment flows and, last but not the least, enhancing people-to-people
connectivity.
Regional integration, he
said, thus became a key driver for stimulating growth.
“It is bound to enable
sharing of the fruits of growth across countries and regions and bring peace
and prosperity to the regions that it envelops. Pakistan firmly supports and
will actively take part in the building of ‘the Belt and Road’ as it believes it
will serve the fundamental interests of the two countries and peoples and
contribute to peace, stability and development in the region and beyond. CPEC
is an important project of “the Belt and Road” initiatives as it provides a
link between the road and the sea route and in President Xi’s words it is where
the two “meet”. It also has same developmental goals which will bring peace,
harmony and prosperity along the Corridor, in the region and the world.”
When asked about the ’1+4′
cooperation structure, with the CPEC at the center and the Gwadar Port,
transport infrastructure, energy and industrial cooperation being the four key
areas to achieve a win-win result and common development, he said that the 1+4
cooperation structure/framework was a beautiful concept given by President Xi
to which the Pakistani government had fully endorsed as it summarized the
concept of the Corridor simply, yet beautifully.
The goal of China-Pak
Economic Corridor, he said, was to facilitate and intensify economic activity
along the Corridor.
“It envisages connectivity
and expansion of trade and investment through a network of roads, rail, fiber
optic cables, and energy pipelines. It also provides for the creation of
special economic zones, industrial parks and trade centers and development of
energy and technical cooperation.”.
The CPEC, he said, would
connect the nodes of growth center in such a manner that the fruits of the
development would benefit all areas / provinces of Pakistan consistent with
scientific planning parameters.
Further, he said, it would
be connected with trade facilitation corridors, dedicated freight corridors,
energy corridors, trade logistics corridor, telecommunication corridor etc.
Therefore, he said, the CPEC
was not just name of a project but was a comprehensive package of cooperative
initiatives and projects, which covered the key areas, including connectivity,
information network, infrastructure, energy cooperation, industries and
industrial parks, agricultural development and poverty alleviation, tourism,
financial cooperation as well as livelihood improvement, including municipal
infrastructure, education, public health and people-to-people communication.
Hence, he said, when “we
look at each of the said element it fits in one of the key area of the framework
resulting in community of shared destiny to ensure the perpetual continuity
into friendship of our two countries from generation to generation.”
Regarding the role of the
Gwadar Port play in the Belt and Road initiative, he said that the port had the
potential of becoming an energy transportation hub due to its proximity to
Strait of Hormuz, a key shipping route.
“It will not only be very
vital for bilateral trade for Pakistan and China but shall also provide immense
opportunities for the Central Asian region as well as the surrounding region
which is home to around 2/3rd of the world’s oil reserves.”
Currently, he said, “the
goods and energy transportation for China goes through Strait of Malacca which
raises the cost of transportation in addition of poses security challenges due
to being a longer route.
Ishaq Dar expected that the
development of CPEC would on average reduce distance of 6000 km for China,
approximately on average it takes 45 days for ship starting from the Middle
East or Africa to reach Chinese ports and vice versa in addition to local
transportation.
“In comparison it would take
around 10 days to reach Gwadar Port which will have commercial importance for
the economies by cutting time, distance and cost. Further it also provides risk
management opportunities.”
Empirical analysis of other
regional examples, especially in South East Asia, he said, suggested that
multiple ports operating in regional countries had led to trade volume
expansion and not contraction for the early players in the business.
The new ports in other parts
of the world actually became new nodes for trade activity opening up those
regions for international trade which were hitherto closed off or inaccessible,
he said.
In addition, he said, the
existing ports had their own core competencies on the basis of which they were
providing their unique value propositions.
“The transshipment business
can also open new opportunities that will arise by reducing the transportation
cycle costs and by investing in the freight forwarding and transshipment
opportunities in Gwadar which shall be beneficial for Pakistan, China and other
land locked central Asian states,” he added.
Competitive cooperation in
such a manner, he said, “provides financial incentive to the participants,
helps in changing behaviours, removes discontentment / disparity and creation
of jobs leading to peace, development, prosperity and harmony.”
“History is also witness to
the fact that trade on the Silk Road was a significant factor in the
development of the civilizations of China, the Indian subcontinent, Persia,
Europe, the Horn of Africa and Arabia; by opening long-distance political and
economic relations between the civilizations. The main traders during antiquity
were the Chinese, Persians, Somalis, Greeks, Syrians, Romans, Armenians,
Indians, and Bactrians, and from the 5th to the 8th century the Sogdians,” he
added.
During the coming of age of
Islam, he said, Arab traders became prominent. Though silk was certainly the
major trade item from China, many other goods were traded along with religious
and syncretic philosophies and various technologies.
In addition to economic
trade, he added, the Silk Road served as a means of carrying out cultural trade
among the civilizations along its network as well thus becoming game changer
for those civilizations.
Hence today, he said, China
and Pakistan along with other countries along the route would also benefit
similarly and investing in these initiatives would prove to be a game
changer/fate changer for all participatory economies/states.
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