Pakistan acts to guard Chinese interests
By Syed Fazl-e-Haider
QUETTA, Pakistan - Political and administrative reforms recently announced by
Pakistan for its Northern Areas, from last week known officially as Gilgit
Baltistan, are aimed at providing better security cover for the rapidly growing
Chinese interests in the territory, according to analysts.
Gilgit, the Northern Areas capital, has acquired the status of a gateway to
Central Asia in the wake of a Pakistan-China barter trade agreement and accords
with Central Asian states.
China has invested heavily in a range of projects in the Northern Areas and is
poised to launch several new projects, particularly in power sector, costing
billions of dollars. Last month, during a visit by Pakistani President Asif Ali
Zardari to China, the countries
signed a memorandum of understanding on construction of a hydro-power station
at Bunji, in Gilgit Baltistan.
The countries also agreed in June to allow market access for bilateral trade in
11 services sectors and to intensify their efforts to increase border trade,
which constitutes merely 5% of their overall trade, and takes place through the
Karakoram Highway (KKH), whose repair and upgrade is likely to be completed by
2012.
Last week, the Pakistan government announced significant reforms for the
Northern Areas, including renaming the area as Gilgit Baltistan through the
federal cabinet's approval of the Gilgit Baltistan Empowerment and Self
Governance Order, 2009. The area has not been given the status of the country's
fifth province, though it will have a legislative assembly, a chief minister
and a governor.
The people of Gilgit Baltistan had hitherto been denied any clear
constitutional status and hence system of governance and the delivery of
justice. This in part reflects the Kashmir issue, with India maintaining that
the Northern Areas has been illegally occupied by Pakistan.
Historically, Gilgit Baltistan was not merged into Pakistan proper due to
concern this might undermine the country's claim on Kashmir and it was not
merged into Azad Jammu and Kashmir, the southernmost political entity within
the Pakistan-controlled part of the former princely state of Jammu and Kashmir,
because it could complicate a settlement on the area, said a recent editorial
of the Dawn newspaper.
If Gilgit Baltistan is made a full-fledged province within the constitutional
framework of Pakistan, India could perhaps argue that the state it has carved
out of the disputed area, Indian-administered Jammu and Kashmir, is also a
legitimate entity and that it is a settled issue, the editorial said.
Beijing's profile in the Northern Areas has been rising for the past decade,
with investments in a range of infrastructure projects. Important China-funded
projects include the construction, maintenance and expansion of the KKH, small
hydro-power projects, construction of a dry port at Sost, water-diversion
channels, bridges, railway projects and telecommunication facilities.
The proposed Bunji dam is estimated to cost up to US$7 billion and will have a
capacity to generate 7,000 megawatts of electricity. Under the deal, undertaken
on a build-operate-transfer basis, all the investment will be made by Chinese
entrepreneurs.
China and Pakistan also plan to link the KKH to the southern Pakistani port of
Gwadar in southwestern Balochistan province through the Chinese-built
Gwadar-Dalbandin railway, which extends up to the Pakistan garrison city of
Rawalpindi.
The KKH, which connects China's Xinjiang province with the Northern Areas, has
a strategic importance as it cuts through the collision zone between the Asian
and Indian continents, where China, Tajikistan, Afghanistan, India and Pakistan
come within 250 kilometers of each other. It connects the Northern Areas to the
ancient Silk Road, which runs about 1,300 kilometers from Kashgar city in
Xinjiang region, to Havelian in the Pakistan district of Abottabad. An
extension of the highway meets the Grand Trunk road at Hasn Abdal, west of
Islamabad.
Under a memorandum of understanding signed in June 2006 between China's
state-owned Assets Supervision and Administration Commission and the Pakistani
Highway Administration, the KKH will be widened from 10 meters to 30 meters,
and its capacity will be increased three times. The upgraded road will also be
constructed to particularly accommodate heavy-laden vehicles and extreme
weather conditions.
The dry port at Sost, on the Pakistan-China border, is connected by the KKH to
Karimabad, Gilgit and Chilas on the south and the Chinese cities of Tashkurgan,
Upal and Kashgar in the north. The port has the potential to act as a conduit
of trade for Central Asian states.
Islamabad is also poised to undertake the construction of the $12.6 billion
Diamer-Bhasha dam, with a capacity to generate 4,500 MW of electricity per day.
Work on the dam is to begin this month and is scheduled to be completed in
2016. The project, on the Indus River, is 165km downstream of Gilgit and 40km
downstream of Chilas.
To support such developments, Pakistan expects an investment of $1.5 billion
per year from European, Arab and Chinese companies willing to form a consortium
on a build-operate-transfer basis on a "supplier's credit" basis.
China has already agreed to extend 10 billion rupees (US$121 million) supplier
credit out of a total cost of 12 billion rupees for the construction of the
Karakoram Highway to establish links with the Bhasha dam site to help to
transport heavy machinery needed in its construction.
Syed Fazl-e-Haider, sfazlehaider05@yahoo.com, is a Quetta-based
development analyst in Pakistan. He is the author of six books, including
The Economic Development of Balochistan (2004).
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