Going Global and CPEC

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Two high-profile initiatives of Going Global strategy of China which laid foundation for departure from self-reliance to become global actor are belt and road initiative and capacity cooperation.

According to Tristan Kenderdine from Australian National University and Han Ling from Columbia University, “Belt and Road is part of a wider attempt to recreate complex interdependence and provides the macro geopolitical setting, it is a much broader canvas, one which China hopes to use to smooth its longer term integration into both the world economy and the global security apparatus.Unlike Belt and Road (B&R), which is a linear geopolitical concept, capacity cooperation is rather a practical financial measure for shifting China’s excess industrial plants offshore to perpetuate the investment-driven project system model of economic development.”

Going Global 2.0 started focusing on China’s claim to become the champion of free trade. China quickly adapted weaknesses of Going Global 1.0 policy to control corruption and governance issues. China also realized that it is not the high-handedness and rent-seeking which can create space for China as global actor but the partnership and engagement can open doors of global markets for China.

Terminologies which we noticed in several agitations in Baluchistan particularly in Gwadar clearly indicate lack of awareness about the transformation in China’s going global policies on one hand and probably some on-ground mismanagements on the other hand which created unrest in local masses.

The most noticed protest in the recent past with the slogan of ‘Gwadarkohaq do’, ‘Give rights to Gwadar’ led by MaulanaHidayat-ur-Rehman, a generally acceptable figure, has also raised questions about mishandling of local administration. One of the participants expressed his concerns in these words, “When we go out to the sea, we cannot return home because the Chinese VIP movement is happening. Imagine that we spend eight hours working at the sea and then we are blocked because some Chinese engineer is moving about. Even if it is a Chinese cook, we have to wait on the roads for hours together. The situation is so bad that we cannot even take a patient to the hospital if the coastal highway is blocked by the security forces.” This certainly indicates maladministration of people in-charge of daily affairs.

There is a need to educate masses in Baluchistan and Sindh and particularly in Gwadar that China’s foreign implementation of the “flying geese model”drives the economic development of underdeveloped countriesat one hand and provides an opportunity to utilize China’s expertise on other therefore making it a three dimensional policy together with the benefits of B&R initiative.

According to the GRISP Development Forum, “The flying geese (FG) model intends to explain the catching-up process of industrialization of latecomer economies from the three aspects. Intra-industry aspect: product development within a particular developing country, with a single industry growing from import to production to export enabling sustainable growth. Inter-industry aspect: sequential appearance and development of industries in a particular developing country, with industries being diversified and upgraded from consumer goods to capital goods and/or from simple to more sophisticated products. International aspect: subsequent relocation process of industries from advanced to developing countries during the latter’s catching-up process.” If we take FG model optimistically, we can create a win-win situation for both China and Pakistan and particularly those who are directly exposed to the China-Pakistan Economic Corridor (CPEC) from Gilgit to Gwadar. Capacitycooperation model can benefit on two fronts: first, building industrial parks focusing ‘comparative advantage’ for different goods and services; second, upgradation of facilities and infrastructure through Sino-Pak industrial collaborations utilizing proposed industrial parks.

Policy makers have to consider anxiety of local population when they exclaim that Baluchistan contains richest mineral resources, its people receive little of the income derived from those resources and are deprived of the education, medical care, and are subject to environmental challenges due to extensive mining activities. China has exceptionally progressed in latest technologies while Pakistan has a vibrant youth to contribute to the global demand of technologically skilled human resource. Instead of transferring only aging or environment unfriendly industries to the proposed technology parks included in the master plan of CPEC, relevant authorities should deliberate working on a wide variety of options considering both absolute advantage and comparative advantage to develop reliable infrastructure for future needs of industrial and technological developments. It is not that complicated to develop frameworks utilizing both absolute and comparative advantages which according to Investopedia, “largely influence how and why nations and businesses devote resources to the production of particular goods and services. Absolute advantage describes a scenario in which one entity can manufacture a product at a higher quality and a faster rate for a greater profit than another competing business or country can accomplish. Comparative advantage, on the other hand, takes into consideration the opportunity costs involved when choosing to manufacture multiple types of goods with limited resources.”

Pakistan is a country of diverse seasons and lands with innumerable dimensions of producing variety of both agricultural and industrial goods based on local environment and resources. Politics and economics of CPEC are intertwined due to several internal and external stakeholders to the project. It is indeed a challenging task to ensure smooth execution due to numerous interest groups and regional forces being impacted by the progress and completion of CPEC. Currently the most important aspect is to address local resistance because despite the promises of connectivity and development of the entire nation CPEC projects have become a target of terrorist attacks due to both inability to comprehend scope and benefits of the project and interventions of forces which consider CPEC as a threat for their regional and global hegemony.

This can be achieved by inculcating consensus, effective stakeholder management, public education & engagement, and inclusion of indigenous communities& all relevant segments of the society.

Dr. AbdusSattarAbbasi

Associate Professor Management Sciences

Head, Center of Islamic Finance

COMSATS University (CUI) Lahore Campus

drabdussattar@cuilahore.edu.pk

Twitter: @drabdussattar