CAREC: More Landlocked States Look to Pakistan's Gwadar Port

Uzbekistan is the third landlocked state in recent years to request the use of Pakistani ports for trade, according to media reports.  The Central Asian nation has asked to join Quadrilateral Traffic in Transit Agreement (QTTA) to make use of Karachi and Gwadar ports for its trade operations. Current members of QTTA are China, Pakistan, Kyrgyzstan and Kazakhstan. Afghanistan is not a member of QTTA but it currently uses Gwadar and Karachi ports under Afghanistan-Pakistan Transit Trade Agreement (APTTA). Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. The recent US-Taliban peace deal is the result of Pakistan's efforts to bring the warring sides to the negotiating table. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.

Pakistan to Bypass Afghan Wakhan Corridor to Trade With Central Asia Via China

Quadrilateral Traffic in Transit Agreement (QTTA):

The Quadrilateral Traffic in Transit Agreement (QTTA) is a transit trade deal between China, Pakistan, Kyrgyzstan and Kazakhstan for facilitating transit traffic and trade.

In addition to being members of QTTA, China, Pakistan, Kyrgyzstan and Kazakhstan are also part of CAREC, the Central Asian Regional Economic Cooperation. Other CAREC member nations include Afghanistan, Azerbaijan, Georgia, Mongolia, Tajikistan , Turkmenistan and Uzbekistan.

China-Pakistan Economic Corridor (CPEC) infrastructure projects have strengthened Pakistan's connectivity with landlocked Central Asia region in recent years.

CAREC Ministerial Meeting Islamabad, Pakistan


Pakistan sits between two economically very dynamic regions: Central Asia (and Western China) and South Asia. Which region is better suited for its economic connectivity and integration? Should Islamabad focus on CAREC (Central Asia Regional Economic Cooperation) rather than SAARC (South Asian Association of Regional Cooperation)?

Ideally, Pakistan should be a major player in both vibrant regions. However, Indian Prime Minister Narendra Modi has adopted a belligerent tone that has been characterized by his boasts of "chhappan inch ki chhati" (56 inch chest) and  talk of  "munh tor jawab" (jaw-breaking response) and "boli nahin goli" (bullets, not talks) to intimidate Pakistan in the last few years.   All of Modi's actions, including his order to bomb Balakot in Pakistan in February 2019, have signaled his outright aggression against Pakistan. His government's actions in Kashmir have extinguished any hope of normal relations between South Asia's two largest economies in the foreseeable future.  These have essentially forced Pakistan to choose between SAARC and CAREC.

CAREC Corridors: 

CAREC region is building six economic corridors to link Central Asian nations. Six multi-national institutions support the CAREC infrastructure development, including the Asian Development Bank (ADB), United Nations Development Program (UNDP), International Monetary Fund (IMF), World Bank,  Jeddah-based Islamic Development Bank and European Bank for Reconstruction & Development, according to Khaleej Times.

Out of the total $27.7 billion CAREC infrastructure investment so for, $9.9 billion or 36 per cent was financed by ADB, a senior officer of the Manila-based multinational bank told Khaleeej Times.

He said other donors had invested $10.9 billion while $6.9 billion was contributed by CAREC governments. Of these investments, transport got the major share with $8 billion or 78 per cent. Asian Development Bank Vice President Wencai Zhang said: "There are huge financing requirements in Carec for transport and trade facilitation, for which 108 projects have been identified at an investment cost of $38.8 billion for the period 2012-2020. Investment for the priority energy sector projects will be $45 billion in this period."

CPEC North-South Corridor:

China Pakistan Economic Corridor (CPEC) is a major part of the north-south corridor that will allow trade to flow among CAREC member countries, many of which are resource-rich but landlocked nations. The corridor will enable the group to access to the Pakistani seaports in Gwadar and Karachi as part of the new maritime silk route (MSR) as envisioned by China and Pakistan.

CPEC consists of transport and communication infrastructure—roads, railways, cable, and oil and gas pipelines—that will stretch 2,700 kilometers from Gwadar on the Arabian Sea to the Khunjerab Pass at the China-Pakistan border in the Karakorams.

China and Pakistan are developing plans for an 1,800 kilometer international rail link from the city of Kashgar in the Xinjiang Uygur autonomous region in Western China to Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to Zhang Chunlin, director of Xinjiang's regional development and reform commission.

Rail Network Bypasses Afghanistan

 "The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said at the two-day International Seminar on the Silk Road Economic Belt in Urumqi, Xinjiang's capital, according to China Daily.

"Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the project has already started," Zhang said. "China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang added.

Afghan Instability:

Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. The recent US-Taliban peace deal is the result of Pakistan's efforts to bring the warring sides to the negotiating table. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.


A growing list of landlocked Central Asian countries is lining up to use Pakistani ports of Gwadar and Karachi for trade. Uzbekistan is the latest nation to do so. China-Pakistan Economic Corridor (CPEC) infrastructure projects have strengthened Pakistan's connectivity with landlocked Central Asia region in recent years.  The Quadrilateral Traffic in Transit Agreement (QTTA) is a transit trade deal between China, Pakistan, Kyrgyzstan and Kazakhstan for facilitating transit traffic and trade.

In addition to being members of QTTA, China, Pakistan, Kyrgyzstan and Kazakhstan are also part of CAREC, the Central Asian Regional Economic Cooperation. Other CAREC member nations include Afghanistan, Azerbaijan, Georgia, Mongolia, Tajikistan, Turkmenistan and Uzbekistan.  Pakistan is making a serious effort to stabilize Afghanistan, a member of CAREC. The recent US-Taliban peace deal is the result of Pakistan's efforts to bring the warring sides to the negotiating table. Afghan instability has prevented Pakistan from connecting with other STANs for commerce and trade. Now the development of CPEC will enable Pakistan to bypass Afghanistan, if necessary, to connect with Central Asia region through Western China.

Related Links:

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Indian Spy Kulbhushan Yadav's Confession

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Riaz Haq said…
#China-#Pakistan friendship (1950-2020). Bonds of friendship go back to centuries-old #trade relations, when Chinese traders travel through Pakistan on their business trips to the #MiddleEast, #Europe, and the rest of the world. #CPEC #BRI - Global Times

Pakistan and China established diplomatic relations on May 21, 1951. The first high-level official delegation visited China just after three months of liberation, on January 4, 1950. But the bonds of friendship have gone back to centuries-old trade relations, when Chinese traders travel through Pakistan on their business trips to the Middle-East, Europe, and the rest of the world through ancient Silk Route. Over 2,000 yers ago famous figures such as the monks Fa Xian and Xuan Zang traveled through areas which are today known as Pakistan.

This relationship was built on the strength of successive achievements and becomes formidable with each passing day and year. The leadership of both countries is committed to taking this relationship forward.

To understand the depth of this unique relationship, here is a glimpse of the milestones reached over the years:

• 1950 - Pakistan becomes the third non-communist country, and the first Muslim one, to recognize the People's Republic of China and dispatched a high level delegation to China on January 4, 1950.

• 1951 The two countries established formal diplomatic relations on May 21, 1951.

• 1955 Visit of Vice President Madam Song Ching Ling to Pakistan marked the first high level visit from Chinese side.

• 1956 Visit of Prime Minister H.S. Suhrawardy to China, was the first high level visit from Pakistan.

• 1963 Historic Visit of Foreign Minister Zulfiqar Ali Bhutto to China

• 1963 Pakistan and China conclude boundary agreement through peaceful negotiations. Pakistan is the only and most friendly country in the neighborhood who has never had any difference of opinion or border dispute with China.

• 1964 Pakistan International Airlines (PIA) started its flights to Beijing, becoming the first non-communist country airline to fly from Beijing, entering into a new era of linkages between the two countries. Pakistan was the window for China to interact with the rest of world.

• 1965 Agreement on Cultural Cooperation signed, promoting understanding and harmony.

• 1970 Pakistan facilitates first visit by US President Nixon to China, paving way for the first-ever US-China official contact, leading toward the normalization of Sino-American relations.

• 1976 Agreement on Scientific and Cultural Cooperation signed, opening huge opportunities for Pakistani scientists and students.

• 1978 The Karakoram Highway, a construction miracle, linking mountainous Northern Pakistan with Western China officially opened, linking China to the Arabian Ocean.

• 1983 Pakistan and China sign MoU on Educational Exchanges, which led 32,000 Pakistani student studying in China today.

• 1989 The two countries sign an agreement on Reciprocal Encouragement and Protection of Investments. China is the largest investor in Pakistan.

• 1995 Agreement for Traffic in Transit is signed between the Governments of Pakistan, China, Kazakhstan and Kyrgyzstan, opening avenues of transit trade with other central Asian states and whole of Eurasia.

• 1995 Prime Minister Benazir Bhutto visits China as a special guest to attend the 4th Women's Conference in Beijing, bring the women of the two friendly nations close to each other.

• 1999 The contract to jointly develop and produce the JF-17 was signed, a landmark event for Pakistan's defense Industry.

• 2001 Premier Zhu Rongji visits Pakistan on the occasion of 50 years of the establishment of Diplomatic Relations.
Riaz Haq said…
#China ignores #India over world's highest Diamer-Bhasha #dam project in #Pakistani #Kashmir. #Islamabad gets #Beijing funds for joint venture opposed by #Delhi. It will generate 4,500 MW of #power & store 8 million acre-feet of #water. #RenewableEnergy

Riaz Haq said…
#India Faces Another Plague as #LocustsSwarm, adding to #Modi's multiple woes: Rising #coronavirus infections, a #heatwave hitting #Indian capital #NewDelhi, a recent killer #cyclone and 100 million people out of work. #unemployment #recession #Ladakh

Scientists say it’s the worst attack in 25 years and these locusts are different.

“This time the attack is by very young locusts who fly for longer distances, at faster speeds, unlike adults in the past who were sluggish and not so fast,” said K.L. Gurjar, the deputy director of India’s Locust Warning Organization.

The locusts were flying in from Iran and Pakistan, blanketing half a dozen states in western and central India. Because most of the crops were recently harvested, the hungry swarms have buzzed into urban areas, eager to devour bushes and trees, carpeting whatever surface they land on.

On Monday, Jaipur, a sprawling city of 4 million and the biggest in the state of Rajasthan, was besieged. A blizzard of bugs flew over concrete buildings and the wealthier neighborhoods, swooping in on trees and plants, crossing graveyards and jewelry markets, attracted to the manicured golf course in the heart of the city.

After he saw what was happening, Mr. Doodi, the groundskeeper, yelled out to the caddies and other key personnel, urging them to make whatever loud noise they could to drive the bugs away. Some grabbed firecrackers. Others steel plates to bang on. Another person ran up to the roof of a maintenance building and started thumping on empty plastic containers, like drums.

Residents clamored to protect themselves and their flora, spilling onto the streets banging plates with spoons and jumping into parked cars to honk horns.

“I got out of my room and came out on my terrace at around 10 a.m. and saw a long shadow on the ground,” recalled Nikhil Misra, a lawyer in Jaipur. “I just stood still. It was something I had never seen in my lifetime.”

“I looked up and saw a cloud, not the cloud that gives you rainfall, but a cloud of locusts, thousands and thousands of them hovering over my head,” he said. “It was a silent attack. It was a strange kind of fear, as if being overtaken by aliens.”


The Indian government wants to tackle this regionally and has offered to set aside some of its differences with Pakistan to provide the neighboring country with pesticide to spray on its side of the border. India has made the same offer to Iran, which responded positively, Indian officials said.

Indian scientists said that in a single day, a modest locust swarm can travel 200 kilometers and eat as much food as about 35,000 people.
Riaz Haq said…
#Afghan Transit #Trade Starts Via #Gwadar Port. It's part of #China-#Pakistan Economic Corridor (#CPEC), which is building #Pakistani roads, economic zones and a major airport in Gwadar to improve regional connectivity. #Chabahar #Iran #India | TOLOnews

China's embassy in Pakistan on Tuesday in a tweet said that Afghan transit trade has started at Gwadar Port. The first ship full of containers reached Gwadar Port on Tuesday.

The containers will be loaded onto trucks for transport to Afghanistan through the Pakistani border town of Chaman, VOA reported.

Kabul traditionally has relied on Pakistani overland routes and the two main southern seaports of Karachi and Port Qasim for international trade, under a bilateral deal with Islamabad, known as the Afghan Transit Trade Agreement (ATTA).

However, recent Chinese financial and construction efforts have activated the deep-water port of Gwadar, on the Arabian Sea, which offers a much shorter overland link, particularly to southern regions of Afghanistan, for the rapid delivery of goods.

The port is at the center of the China-Pakistan Economic Corridor (CPEC), which is building Pakistani roads, power plants, economic zones and a major airport in Gwadar to improve connectivity between the two allied nations and the region in general.

The massive project is hailed as the flagship of Beijing’s trillion-dollar Belt and Road Initiative, which has brought about $30 billion to Pakistan in direct investment, soft loans and grants over the past six years.
Riaz Haq said…
Gwadar port to boost #Pakistan-#Afghanistan #trade. Bagging of fertilizer will be done in #Gwadar and bags shipped on trucks to Afghanistan which will generate employment for the locals in #Balochistan. #CPEC #infrastructure #trade #economy

Afghan Ambassador to Pakistan Atif Mashal said Islamabad''s decision to allow Afghan traders to import goods via the Gwadar port in Balochistan province will boost bilateral trade and transit ties between the two countries.

Mashal''s comments on Friday came following the arrival of a cargo ship, carrying 16,000 tonnes urea for transit to Afghanistan at the Gwadar port, reports Xinhua news agency.

Pakistan last month announced to allow import of the Afghan bulk cargo of wheat, sugar and fertilizers at the Gwadar port and onward transit to Afghanistan in sealable trucks, instead of being limited to containers.

"For the first time, bagging will be done locally instead of foreign ports. Urea will be bagged and shipped on trucks to Afghanistan at Gwadar, which will generate employment for the locals. Instructions have already been passed to allocate all labor jobs to local population," Abdul Razak Dawood, advisor to Pakistani Prime Mnister on commerce, textile, industry and production, and investment, tweeted on Friday.

In response, the Afghan Ambassador welcomed Pakistan''s decision.

"This will certainly have a positive impact on Afghanistan-Pakistan trade and transit ties. We must extend support to each other for revival of commerce and connectivity in Central and South Asia that will surely benefit people in the region," Mashal said in a tweet.

Pakistan announced in October 2019 to open the Gwadar port for the Afghan transit trade as the trade related infrastructure at the port was already to handle bulk cargoes to and from Afghanistan.

The first ship carrying containers for Afghan transit trade arrived at the Gwadar port on January 14.

Pakistan and Afghanistan had signed a transit trade agreement in 1965 that was revised in 2010, which calls for better facilitation in the movement of goods between the two countries.

Afghan traders would previously use ports in Karachi for import under the transit trade agreement.
Riaz Haq said…
The Trade and Transit Woes of Landlocked Afghanistan During COVID- 19
Pakistan plays a big role in dictating the fortunes of the Afghan economy.

Afghan Think Tank's View:

Being landlocked remains one of the most disadvantageous positions for a state, especially in the modern global economy dominated by maritime trade. Prominent Oxford University economist Paul Collier listed being landlocked with bad neighbors as one of the four key reasons why countries with a combined population of 1 billion are stranded in poverty.

Afghanistan is a typical victim of such a landlocked geographic position. Transit routes and access to the sea are hardly dictated by international laws, conventions, and bilateral agreements when it comes to neighboring Pakistan. The situation remains grim, even during the outbreak of COVID-19, at a time when global efforts are being made to ensure humanitarian support to all countries.

In Pakistan, the first case of COVID-19 was confirmed by the Ministry of Health on February 26 and the pandemic gained momentum with every passing day since. On March 16, the country closed all its borders with neighboring countries for two weeks. The decision included the closure of the major crossings at Torkham and Wesh-Chaman along the Durand Line, thus interrupting Afghanistan’s trade and transit. It is worth mentioning that the Wesh-Chaman crossing point had been closed in first week of March. As a result, around 2,000 containers were stranded along the crossing points, while another 6,000 Afghanistan-bound containers carrying food, medicines, and non-food items were piled up at Pakistan’s Karachi port.

On March 20, Pakistani Prime Minister Imran Khan tweeted his commitment to support Afghanistan during the crisis and said that he had instructed the authorities to open the Wesh-Chaman crossing point. Although, Torkham, not Wesh-Chaman, is the major crossing point, Khan’s tweets inspired relief among Afghan traders, government, and the public. However, the situation remained unchanged until April 9. The crossing points were open again on April 10, but traffic was diminished — three days a week, plus hours reduced to 10 hours per day rather than 24-hour service. Further, 100 percent of goods were being scanned before crossing, as opposed to the 5 percent threshold laid out in agreements between the two countries. This meant 200 to 250 trucks could cross over per week, compared to earlier figures of 4,000 to 5,000. At this pace, it will take an estimated three months to bring all the stranded containers to Afghanistan.

The delay has severe cost implications as well......


The recent obstruction of transit trade and the approach of the Pakistani authorities has left the Afghan economy at the verge of a disaster, once again. A sustainable long-term solution lies in seeking alternative trade routes. The Afghan government has neither pushed for renegotiation of the bilateral agreement nor has it done enough to operationalize Chabahar for Afghan traders. The five-year duration of APTTA has already expired and there is a need to renegotiate it. A shift of transit trade to Chabahar would give the Afghan government much-needed bargaining power to renegotiate APTTA and ensure smooth trade and transit through both routes. The present Afghan government’s approach will only allow Pakistan to dictate the fortunes of the Afghan economy and exploit its vulnerable position.
Riaz Haq said…
A study highlights that if China uses the CPEC route for trade with six countries in the Middle East and Europe, it will be able to save almost $70 billion annually. The estimate is based on data for the year 2016-17.

Pakistan will also earn good revenue of around $6-10 billion through different types of services and fees. Mutual gains from the industrial, agricultural and scientific cooperation will be even more rewarding for both the countries. Thus, the focus must be on implementation and completion of projects on time.
Riaz Haq said…
#China #PLA expands modern high-altitude arsenal like tanks, rockets, artillery, helicopters and drones to address border threat from #India. Z-8G #helicopter can take off from 4,500-6000 meters above sea level .#Ladakh #Kashmir #Gilgit_Baltistan #CPEC

Since the Doklam standoff with India in 2017, the Chinese military has expanded its arsenal with weapons like the Type 15 tank, Z-20 helicopter and GJ-2 drone that should give China the advantage in high-altitude conflicts should they arise, Chinese analysts said on Sunday.

China's Type 15 tank made its public debut at the National Day military parade on October 1 last year.

With a powerful engine, the Type 15 lightweight main battle tank can effectively operate in plateau regions difficult for heavier tanks, and with its advanced fire control systems and 105 millimeter caliber armor-piercing main gun, it can outgun any other light armored vehicles at high elevations, the experts told the Global Times on Sunday.

China's most advanced vehicle-mounted howitzer, the PCL-181, also debuted at the parade.

At 25 tons, the PCL-181 is lighter, faster and can endure longer than the previous 40-ton self-propelled howitzer on crawler tracks.

It can digitally deploy its gun at the press of a button, with automatic calibration and semi-automatic reloading.

Both the Type 15 tank and the PCL-181 howitzer were displayed in the high-elevation plateau region of Southwest China's Tibet Autonomous Region in a China Central Television report on military exercises in January.

Another new weapon which debuted at the parade was a multiple-rocket launcher system, which uses an 8x8 wheeled high-mobility chassis and carries two sets of four 370-millimeter rockets, making it viable for high-altitude deployment, according to publicly available reports.

In the air, China unveiled the Z-20 utility helicopter at the parade. This medium-lift helicopter can adapt to all kinds of terrain and weather and can be used on missions including personnel and cargo transport, search and rescue and reconnaissance.

The Z-20 can operate in oxygen-depleted plateaus thanks to its powerful homemade engine, Chen Guang, vice general manager of Avicopter, the helicopter branch of Aviation Industry Corporation of China that developed the helicopter, told the Global Times previously.

Joining the Z-20 is the modified Z-8G large transport helicopter displayed at the Fifth China Helicopter Exposition held in Tianjin in October.

Focusing on plateau operations, the Z-8G is the first of its kind in China and can take off from 4,500 meters above sea level with a ceiling higher than 6,000 meters.

At Airshow China 2018, the Chinese Air Force unveiled the GJ-2 armed reconnaissance drone, which has a higher ceiling and can carry more payload than the previous GJ-1. Reports said it can be used to patrol the long border in high-altitude areas like Tibet.

These specially designed weapons have boosted the Chinese military's combat capabilities in high-altitude regions, enabling it to better safeguard national sovereignty and territorial integrity, Chinese analysts said.

Border incidents have recently occurred between troops of China and India.

Chinese border defense troops have bolstered border control measures and made necessary moves in response to India's recent, illegal construction of defense facilities across the border into Chinese territory in the Galwan Valley region in May.

Indian media reports said China recently deployed 5,000 more troops to the border area with India, and diplomats of the two countries have started talks on a peaceful resolution.

Chinese Defense Ministry spokesperson Ren Guoqiang said Friday at a regular press conference that the Chinese border defense troops are devoted to safeguarding peace and stability in the border regions and that the overall situation along China-India border was stable and under control.
Riaz Haq said…
#Pakistan #Navy chief talks regional security and tech wish list. Over 90% of its #trade is seaborne; it's a trade conduit to #China and #CentralAsia via #CPEC. Key threats to Pakistan’s security is from India’s #Hindu Nationalist mindset of #Modi. #CAREC

The Pakistan Navy, being a firm believer in the freedom of seas, has been contributing significantly in preserving maritime security in the Indian Ocean region. In this regard, the Pakistan Navy was the first regional navy to join Combined Task Force 150 in 2004. Similarly, to counter the increasing acts of piracy in the Gulf of Aden and Horn of Africa, we joined Combined Task Force 151 in 2009. So far, the Pakistan Navy has been the largest contributor to CMF operations, second only to the United States Navy. Pakistan Navy officers have also had the privilege of commanding both these task forces on numerous occasions.

While we continue to be part of CMF, the Pakistan Navy is also a proponent of a region-centric maritime security construct. Alive to the changing geostrategic realities in the region, the Pakistan Navy in 2018 instituted the RMSP to protect our national maritime security interests and fulfill international obligations in the Indian Ocean region. Pakistan Navy ships, with embarked helicopters, are undertaking these patrols along three axes: the Horn of Africa, the North Arabian Sea and the central Indian Ocean. The objectives of the RMSP include contribution toward maintaining good order at sea in our own area of interest and engagement with the regional navies to enhance mutual collaboration and interoperability.


Progressive “capability development” is an important pillar of my vision for the Pakistan Navy. As warships are the mainstay of any navy, induction of surface platforms is essential to boost the Pakistan Navy’s operational deployability. In this regard, we have contracted for the construction of Type 054AP frigates from China and Milgem-class corvettes from Turkey along with transfer of technology. We are also inducting Dutch-designed offshore patrol vessels constructed in a Romanian shipyard.

In addition, we have contracted for the acquisition of Hangor-class submarines from China, and in the second phase their construction is planned in-country, for which necessary upgrades of Karachi Shipyard & Engineering Works Limited is in progress.

We are also focusing on the induction of modern aviation assets, including jet-powered, long-range maritime patrol aircraft, helicopters and UAVs. In addition, we are modernizing our existing fleet of warships and aircraft with upgrades to their weapons and electronic suites.

These inductions have led to expansion in our human resource capital. However, keeping a high “teeth-to-tail” ratio remains a priority. As our Navy expands in line with the recent restructuring, the induction rates have almost doubled. With regard to the budgetary allocations, our Navy, like many other navies, operates in a resource-constrained environment. However, with a clear and long-term plan for its modernization and capacity building, emerging challenges are being addressed through indigenization and cost-effective solutions.

The Pakistan Navy always looks forward to adopting new technologies, especially those which serve as force multipliers. Unmanned surface vehicles have a variety of utilities, such as for harbor defense, mine detection and countermeasure roles. We are presently evaluating this technology and will acquire it as per their suitability and feasibility to our requirements.
Riaz Haq said…
#Pakistan approves $7.2 billion #rail project. Modernization of 1,872 kilometers #railway track is expected to increase the speed of the passenger trains to 160km/h from 110km/h and boost freight as part of #China-#Pakistan Economic Corridor. #CPEC

Pakistan has given its approval for the $7.2bn project to upgrade the railway between Karachi and Peshawar.

The approval was given by the Central Development Working Party (CDWP).

This 1,872km-long rail line is a part of the China Pakistan Economic Corridor (CPEC) and will link Kashgar, China, with Pakistan’s Gwadar Port.

Times of India quoted CPEC Authority chairman Asim Saleem Bajwa as saying that this approval is a major milestone in the CPEC phase two.

The modernisation of the rail line is expected to boost the speed of the passenger trains to 160km/h from 110km/h.

With this approval, Pakistan will undertake negotiations with China for the project finances and inform the International Monetary Fund regarding the loan.

The CPEC is a $60bn project under China’s President Xi Jinping’s Belt and Road Initiative to connect Asia, Africa and Europe with a network of highways, rail lines and sea lanes.

In April 2019, Malaysia and China signed a revised agreement to resume construction of the suspended East Coast Rail Link (ECRL).

As part of Belt and Road initiative, the ECRL project will connect Port Klang on the Straits of Malacca to Pengkalan Kubor in north-east peninsular Malaysia.

In March, Nepal decided to use the Chinese track gauge standard for its railway system in a bid to reduce costs.

In October 2018, China Railway Eryuan Engineering Group and Myanma Railways signed a memorandum of understanding (MoU) to carry out a feasibility study of the 431km Muse-Mandalay railway line.
Riaz Haq said…
"Belt & Road Economics": 2019 Report by the World Bank

Pakistan’s GDP to increase by up to 6.43pc till 2030, if one is to take only the investment on transport infrastructure under CPEC into account. However if one includes the impact of some policy measures like reducing border delays and reduction in tariffs that the World Bank proposes, Pakistan can add as high as 14.06pc to its GDP.

“The impact of a more ambitious set of reforms could magnify the gains from the new infrastructure network. For instance, if in addition to an improved infrastructure network also border delays were reduced by half, BRI economies could double the GDP gains coming from infrastructure investment alone. As all countries, BRI and non-BRI, are subject to border delays we find that non-BRI economies benefit as well from trade facilitation reforms. Low-income countries, which trade intensively with countries or tend to have long border delays, would disproportionately benefit from better border management. Better border management would allow firms located in low-income countries to access cheaper inputs increasing their competitiveness in foreign markets. As a consequence, demand for labor would increase pushing nominal wages up. Finally, a more efficient use of intermediate inputs and lower transport costs would lead to a decrease in prices of final goods.”

“As a second exercise, we simulate a 50pc reduction in applied tariffs among BRI
economies. Average tariffs in BRI countries are relatively high compared to tariffs in advanced economies. Applied tariffs in BRI countries vary between around 14pc in Sub-Saharan Africa and 2pc in East Asia and Pacific compared to applied tariffs of below 1pc in G7 countries. This trade rade policy could have a substantial effect on countries in South Asia that could increase the impact of infrastructure improvement alone by a factor of 5.
Interestingly, countries located in the Middle East and North Africa and in Europe and Central Asia would benefit more by combining infrastructure investment with trade facilitation policies rather than combining it with trade policies. This result is explained by relatively high border delays in these regions and by the fact that they rely disproportionately more on non-BRI countries in terms of inputs for their production. The effect of combining both a reduction in preferential tariffs and border delays would increase the benefits for both BRI and non-BRI members more than individual complementary policies alone.”

“Our results show that BRI transport infrastructure projects increase GDP for BRI
economies by up to 3.35pc. The model also shows that BRI-related transport projects could increase GDP for non-BRI countries by up to 2.61pc and for the world as a whole by up to 2.87pc. These numbers are larger than typical findings for regional trade agreements such as NAFTA using a similar methodology. Contrary to regional trade agreements, which decrease tariffs within a narrowly defined set of countries, the BRI is expected to decrease trade costs between a very large number of countries, including many economies that are not part of the initiative but whose trade flows will benefit from the improved transport infrastructure network when accessing (or transiting through) BRI countries.” the report stated.
Riaz Haq said…
"Belt & Road Economics": 2019 Report by the World Bank

Southeast Asian countries are also perceived as having relatively good road quality.
But only Malaysia and some Gulf countries are perceived as having high-quality
roads, as in Western European countries. The quality of rail infrastructure mirrors
the quality of road infrastructure (figure 1.7b). The Russian Federation, Kazakhstan,
Ukraine, the Slovak Republic, and the Czech Republic form a corridor of relatively
good rail infrastructure, while most Southeast Asian countries and the countries
southwest of China, such as the Kyrgyz Republic and Pakistan, are perceived as having
some of the lower quality rail infrastructure. Across corridor economies, logistics
professionals perceive gaps in rail infrastructure as more prevalent than gaps in road
infrastructure. Seaport and airport infrastructure receive higher marks for perceived
quality (Wiederer 2018).


Even though China is closer to Southeast Asia and South Asia than to Europe, the
physical connectivity with the Asian regions is weaker. Due to poor-quality land
infrastructure and level of service, almost all freight between China and Southeast
and South Asia goes by sea. The transport infrastructure in Myanmar is so poor that
virtually no traffic flows overland to it. China’s only land connectivity with South Asia
is through the Himalayas. China connects with Pakistan by road over the Khunjerab
Pass at an altitude of 4,600 meters, but the road is open only for seven months of the
year. China–Nepal–India connectivity is very limited due to the poor infrastructure in
Nepal and the need for four transshipments along the route


• Times to comply with regulatory and border requirements for imports are higher than
global averages on all corridors except the New Eurasian Corridor, and times to export
are higher than the global average on all corridors except the New Eurasian and China–
Pakistan corridors (figure 1.13). The gap between import and export times is higher than
the global average on all but two corridors (the China–Mongolia–Russia Corridor and
China–Indochina Peninsula Economic Corridor), suggesting a disproportionate burden
for traders importing in corridor economies


Expected BRI investments are very large for some countries. Some 66 percent of the
total BRI investment is expected to accrue to seven countries, with Indonesia, Malaysia,
Pakistan, and the Russian Federation accounting for 50 percent of the total. Scaled by
2017 GDP, the median BRI investment amounts to under 6 percent of GDP, an amount
that is not large in relation to the investment needs of many countries, especially if
disbursed over several years. For example, median annual BRI financing in the WIND
database would amount to slightly more than 1 percent of GDP if disbursed over the five
years until 2023. But in some countries estimated investment surpasses 20 percent of 2017
GDP (figure 1.18).


Using this approach, Reed and Trubetskoy (2019) assessed the value of 68 BRI projects.
Half of them generate little value when built in isolation because they connect only
smaller cities or do not add new least-cost paths between cities. But when the entire
network of projects is built, the share falls to around one-third, confirming that the
value of each project depends on other projects. The most valuable projects connect
highly populous cities to the network, such as the Kunming–Kolkata High Speed Rail
(Bangladesh, India, and Myanmar), the Tehran–Mashhad rail electrification in the Islamic
Republic of Iran, and the expansion of the ML-1 Karachi–Hyderabad–Lahore–Peshawar
railway in Pakistan. This analysis points to the importance of project selection and appraisal
to ensure the success of BRI investment.
Riaz Haq said…
#US to include #Pakistan in $3b fund for Central Asian Republics. US IDFC fund is to support immediate liquidity requirements of financial institutions, in the aftermath of the #COVID19. Pakistan looking for stronger connectivity in #CAREC. #infrastructure

The United States intends to launch a regional fund for development in Central Asian Republics (CARs), which will include Pakistan as well.
In this regard, US International Development Finance Corporation (IDFC) CEO Adam Boehler informed Adviser to Prime Minister on Commerce Abdul Razak Dawood that they intended to start a regional fund for development in CARs, which had shown keen interest in including Pakistan in the fund.

He added that the IDFC had a $3-billion fund for immediate liquidity requirements of financial institutions, in the aftermath of the Covid-19 pandemic. He also discussed a number of opportunities with the Pakistani side and decided to pursue different options, as discussed in the meeting.

Giving an overview of Pakistan’s economic relationships with regional countries, Dawood said Pakistan was already working closely with Afghanistan, particularly on the development of transit trade as well as building a long-term economic relationship. The PM aide added that Pakistan was looking for stronger connectivity with CARs, which would include building of roads as well as power infrastructure.

The adviser underlined that Pakistan was a high-cost energy country and with stronger connectivity with CARs, the country could lower the cost for the benefit of investors and businesses. He further said the IDFC could play an instrumental role as a link among these regional countries for the achievement of mutual objectives.

While discussing different opportunities in Pakistan, Dawood apprised the IDFC official of the public-private partnership model introduced by the government in order to ease some burden on the annual development expenditure.

He explained that there was a need for foreign direct investment (FDI) in Pakistan because it brought technology, caused improvement in productivity and created employment opportunities for the locals.

He stressed that Pakistan was looking for diversification in FDI as investors.

The adviser also shared the problems being faced by businessmen in Pakistan, amid the global pandemic, including liquidity issues and cancelation of export orders.

Elaborating on the specific areas where the IDFC could support Pakistan, the Board of Investment (BOI) chairman, who was also present in the meeting, talked about the importance of equity investment rather than direct loans, which was a more sustainable approach towards development.
Riaz Haq said…
#CPEC Re-Emerges In #Pakistan With Flurry Of Major #China Deals: 2 #hydropower projects costing $3.9 billion, and another to revamp Pakistan's colonial-era railways for $7.2 billion -- the most expensive #Chinese project yet in Pakistan. via @ndtv

China's Belt and Road program has found new life in Pakistan with $11 billion worth of projects signed in the last month, driven by a former lieutenant general who has reinvigorated the infrastructure plan that's been languishing since Prime Minister Imran Khan took office two years ago.
The nations signed deals on June 25 and July 6 for two hydro-power generation projects costing $3.9 billion in the Pakistan-occupied Kashmir region, and another to revamp the South Asian nation's colonial-era railways for $7.2 billion -- the most expensive Chinese project yet in Pakistan.

Khan's government appointed Asim Saleem Bajwa last year to run the China-Pakistan Economic Corridor Authority, which oversees more than $70 billion in projects from power plants to highways.

He also joined Khan's cabinet in late April, becoming one of more than a dozen former and current military officials in prominent government roles as the army expands its influence in the country.

The Chinese financing has helped rid Pakistan of an electricity deficit that left exporters unable to meet orders and major cities without electricity for much of the day. Still, the implementation of some investments appeared to stall since Khan came to power, with no new projects announced in 2018 and very few in 2019.

Since Chinese President Xi Jinping launched the initiative in 2013, the World Bank estimates about $575 billion worth of energy plants, railways, roads, ports and other projects have been built or are in the works across the globe. Its progress has slowed recently, dogged by accusations that China is luring poor countries into debt traps for its own political and strategic gain.

"The reality is that much of CPEC, like the Belt and Road more broadly, has been paralyzed," said Jonathan Hillman, a senior fellow at the Center for Strategic and International Studies in Washington, referring to the China-Pakistan Economic Corridor. Pakistan "is a flagship for China's Belt and Road, so the need to show progress is even more important."

In a tweet last month, Bajwa said some detractors had given the "false impression" that CPEC had been slowed. Not only has the pace of work on projects picked up recently, but a great deal of ground work has been done to launch phase two of the project that also includes special economic zones to lure Chinese manufacturers, agriculture, science, technology and tourism, he wrote.

"The prime minister pushed very hard on this," said Abdul Razak Dawood, Khan's adviser on commerce and investments said by phone. "We feel that we have to get more and more hydro in our energy mix."

A spokesman in Bajwa's office said he was not immediately available to comment.

Little Progress

Pakistan's army is already responsible for securing every single Beijing-funded project scattered across the country, from the mountains near the Chinese border to the desert in Gwadar where the Chinese operate a port. Its role has become even more important following terrorist attacks on three Chinese-related projects in the past year.

"There is no doubt that PM Khan's arrival slowed the pace of CPEC projects," said Mosharraf Zaidi, a senior fellow at Islamabad-based think tank, Tabadlab, and a former principal advisor to the foreign ministry. "The renewed energy and approval we are now seeing is almost entirely likely due to the chairperson having settled in, and being added to Prime Minister Khan's cabinet."
Riaz Haq said…
ML-1 Project: How can an outdated railway line change the destiny of Pakistan? - BBC URDU

یک وقت آئے گا جب پاکستان میں ٹرینیں بنا توقف 160 کلو میٹر فی گھنٹہ پر دوڑیں گی اور لاہور سے اسلام آباد آپ صرف ڈھائی گھنٹے میں پہنچ پائیں گے۔ کراچی سے حیدرآباد تو صرف ایک گھنٹہ لگے گا۔ یہاں تک کہ مال بردار ٹرین بھی 120 کلو میٹر فی گھنٹہ پر چلے گی۔ ایسا اس وقت ہو گا اگر آٹھ برس کی مدت میں کراچی سے پشاور تک جانے والی مین لائن ون چین کی مدد سے بحال ہو پائے گی۔ اس سے نہ صرف ریلوے کو نئی زندگی ملے گی، پاکستان کی معیشت بھی اس سے مستفید ہو گی۔ ایم ایل ون کیا ہے، کس حال میں ہے اور کیسے بحال ہو گی، دیکھیے ہمارے ساتھی عمر دراز اور فرقان الٰہی کی اس رپورٹ میں
Riaz Haq said…
#Kavkaz2020: Why #Russia’s Latest #Military Drills Are a Golden Opportunity for #Pakistan! 18 nations, including #China, Pakistan & Central Asian nations are participating. #India has withdrawn from opportunity for military diplomacy. @Diplomat_APAC

Pakistan can also use the opportunity to reset relations closer to home. The scenic Wakan corridor separates Pakistan and Tajikistan and at their closest point, the two countries are a mere 10 miles apart. Despite historical and cultural ties between the two Asian nations (both were part of the Arab Umayyad and Persian Empires) and their joint participation in several infrastructure and energy projects (the Central Asia-South Asia Electricity Transmission and Trade Program), Tajikistan plays host to India’s only air force base outside of its borders. The Farkhor Air Base lies around 81 miles southeast of Dushanbe and perilously close to Pakistan’s northern border with Afghanistan. Indian fighter jets taking off from the base can reach Pakistani airspace in little more than a few minutes.

Naturally, this has put a significant strain on relations with Islamabad. Perhaps unsurprisingly, there are no major military ties or significant arms deals between Pakistan and Tajikistan, and if the former plays its cards right, it could use the drills as an opportunity to pull Tajikistan away from India’s military grip.

Military drills are often seen as a show of common strength between allies and a warning to others. However, for Pakistan it would be wise not to see these drills as a show of strength, but rather as an important opportunity to further its relationship with the former Soviet World. India’s recent decision to stay away from Kavkaz 2020 along with the sheer number of former Soviet states participating in them suggests a golden opportunity Pakistan cannot afford to ignore.
Riaz Haq said…
$8.6 billion 1,872 kilometer ML-1 #railway project to turn #Pakistan, particularly #Peshawar, into a global #business hub. It will create 150,000 jobs in Pakistan. Pakistan & landlocked Central Asian nations will also benefit from it. #trade #CPEC #China

ML-1 Railway-line project will turn Pakistan, particularly Peshawar into a global business hub & help open up Central Asia, says a report published by China Economic Net (CEN) on Thursday.

According to the report, experts call ML-1 project a “game changer of CPEC” and predict that in future Peshawar city will the center of business activities. Not only Pakistan, but the countries of Central Asia, wherein many are land-locked, will also benefit from it.

For the rehabilitation and upgradation of the 1,872-kilometer railway line, the Government of Pakistan’s Executive Committee of the National Economic Council (ECNEC) approved ML-1 project worth $ 6.8 billion on August 5, 2020.

As per the plan, the Chinese Government under CPEC would provide 90% of the financing of the project.

The project is also expected to generate 150,000 jobs in the country. Basharat Waheed, the CPEC project head in Ministry of Railways told CEN, “The entire track from Karachi to Peshawar would be upgraded.

The worn-out earthworks under the existing 150-year-old railway line will be completely uprooted and fresh sleepers and rails would be installed with new earthworks with an estimated lifespan of at least 50 years”.
Riaz Haq said…
Pakistan launches ferry service linking Iran, Iraq, UAE and beyond

The federal cabinet of Pakistan on Tuesday, September 8, gave formal approval to the launch of a ferry service out of ports Gwadar and Karachi to the neighbouring states Iran, Iraq, UAE-United Arab Emirates and beyond.

Currently, there was no national or international commercial ferry service operating in the country for the purpose of transportation of goods and passengers. In the regional countries like Bangladesh, Iran, Oman, Sri Lanka, and there were established ferry operators successfully running on a variety of routes. The potential for initiating Pakistan's ferry service has been felt for quite some time, especially in providing an alternate route for Zaireen intending to call at holy sites in Iran and Iraq.

Transportation between Gwadar and Karachi and provision of an alternate water route between Port Qasim and Karachi also has potential for the country.

The Ministry of Maritime Affairs moved a summary for Prime Minister back on December 15, 2017, through the interior, foreign affairs, revenue and defence divisions, proposing the launch of a ferry service through PNSC (Pakistan National Shipping Corporation). The proposal was endorsed by the Ministry of Foreign Affairs and the Ministry of Interior but the Defence Division raised observations and conditions on the proposed service. The Prime Minister’s Office returned the summary with directions to address the observations and re-submit the same.

The maritime affairs ministry re-submitted the proposal and suggested the involvement of private operators and a slightly changed route. The Defence Division supported it but stressed that ferry service should be launched in 3 phases, recommending ferry services to Muscat and then to UAE and Abu Dhabi in 1st and 2nd phases, respectively, and later to Iran and Iraq in the 3rd phase. The re-submitted proposal was returned by the Prime Minister’s Office, with the direction to convene a meeting of the stakeholders to address all the observations and thereafter submit recommendations.
Riaz Haq said…
#Iran, #India to revive #Chabahar. India aims to compete with #China & #Pakistan (#Gwadar/#CPEC) by including #Uzbekistan in North-South Transport Corridor for #trade with #Afghanistan , #Armenia, #Azerbaijan, #Russia, #CentralAsia, #Europe .

In a proactive move, India has made fresh overtures toward Iran, apparently sensing the revival of the 2015 nuclear deal is imminent.

Last week, JP Singh, the joint secretary for Iran-Pakistan-Afghanistan at the Indian Ministry of External Affairs, paid a visit to Tehran.

Laying the groundwork for closer ties, he held political consultations with top officials and obtained updates on the progress at Chabahar, where New Delhi is funding a project to develop the port on the Gulf of Oman. The main purpose of this visit was to regain India’s lost foothold in the Iranian port project.

Then Singh also touched base with Iranian Deputy Foreign Minister Abbas Araghchi, one of the main people involved these days in negotiations regarding the revival of the nuclear deal that is formally known as the Joint Comprehensive Plan of Action (JCPOA). New Delhi is seemingly awaiting the removal of sanctions on Iran before it engages in any large-scale projects or business activity in the country.

Indeed, there have been some positive indications in this direction from Washington. Encouragingly enough, Robert Malley, one of the main negotiators of the 2015 deal, has been appointed as envoy to Iran by the Biden administration. Likewise, the appointment of Wendy Sherman as deputy secretary of state also points toward a possible US-Iran rapprochement, as she had led the team that eventually clinch the deal.

First, if the nuclear deal is salvaged, there is more of the likelihood that Iran will stop “looking East” and maybe even decrease its tilt toward China. Instead, it would try to re-establish business with Western countries, as this is exactly what it had done in 2015 when the JCPOA was first implemented.

Second, as Iran and India already have a defense pact between them, an upgraded strategic role could have a negative impact on Sino-Pakistani projects in the region. Ever since China and Pakistan announced the China-Pakistan Economic Corridor project, India cannot help but feel encircled. Moving in next door in Chabahar would be the ideal setup for New Delhi to keep an eye on developments in the Gwadar port and on Pakistan’s coastline.

Third, trying to break Chinese influence in the region, India would want to redirect Afghanistan and Central Asia toward its own routes. Having a pivotal role in advancing New Delhi’s ambitions, the port of Chabahar is center stage.

In case Iran does go ahead with the widely discussed 25-year strategic partnership with China, it could complicate matters, as Beijing’s prospective $400 billion deal includes access to all of Iran’s ports. In a recent television interview, Iran’s Foreign Minister Mohammad Javad Zarif said that the China-Iran 25-year deal will be finalized soon and that the two countries are not far from reaching an agreement.

Apparently, Iran continues to keep all its options open where regional alliances are concerned.

Finally, for a few years, spats between India and China have become a regular feature at their mutual border in the Himalayan region. As India gets closer to Iran, tensions between Beijing and New Delhi will start one more front.

Due to the constant maritime competition between regional powers, the Indian Ocean region has become a “key geostrategic space” as it connects the oil-rich Middle East with economic markets in Asia. Enhancing ties with Tehran can be quite useful for New Delhi, as Iran is one of the largest states in this region with an extended presence in the northern part of the Indian Ocean.

However, to some extent the success of India’s regional strategy will depend on the resumption of the JCPOA for now, as Iran’s reintegration into the world economy is dependent on the lifting of US sanctions.
Riaz Haq said…
#Uzbekistan Prefers #Pakistani Over #Iranian Ports.The road is said to cut transportation time from 30 to 15 days from Uzbekistan and other landlocked Central Asian countries to #Pakistan and reduce expenses by 30-35%. #CPEC #Karachi #Gwadar

Uzbekistan Prioritizes Pakistani Over Iranian Ports
Accessing seaports at lower costs and shorter distances is a decades-old issues Tashkent is trying to solve, Pakistani ports might be the answer.

Uzbekistan is currently highly reliant on the Iranian seaport of Bandar Abbas, accessed through Turkmenistan. Uzbek President Shavkat Mirziyoyev’s earlier efforts were focused on continuing to use Iran’s port, but exploring options to access it more directly, such as via a new railroad from Afghanistan’s Herat. Uzbekistan’s other earlier efforts, such as the Uzbekistan-Turkmenistan-Iran-Oman railroad corridors, also clearly involved Iran.

Tashkent appears to be reevaluating its plans in favor of de-emphasizing access to Iranian ports, and the economic rhetoric is dominant. According to Eldar Aripov, director of the Institute of Strategic and Regional Studies, the Mazar-i-Shareef-Peshawar project offers an entirely new transportation option while the Herat option merely expands existing routes. The cost of transporting a container from Tashkent to Karachi would be approximately $1,400-$1,600, while on the Tashkent-Bandar-Abbas route it is $2,600-$3,000. Furthermore, the construction of the Herat connection will be complicated, but the Pakistan route would tap into a number of existing projects.

Two years ago, Aripov spoke of two other reasons why the Pakistani ports should receive priority over other railroad options. The first reason is that the Mazar-i-Sharif-Kabul-Peshawar road is the shortest route linking Uzbekistan to a seaport. Second, the road together with the Uzbekistan-Kyrgyzstan-China corridor unites the four largest corridors in China, the CIS, Europe, and South Asia.

The trilateral talks, attended by Deputy Prime Minister and Minister of Investment and Foreign Trade of Uzbekistan Sardor Umurzakov, Advisor to Pakistani Prime Minister on Commerce and Investment Abdul Razzaq Dawood, and Afghan Foreign Minister Mohammad Hanif Atmar, ended by adopting the Mazar-i Shareef-Kabul-Peshawar Road Map.

According to the roadmap plan, the construction of the 600-km railroad should take five years and will allow access to the Pakistani ports of Gwadar and Karachi. Central Asia’s other projects with Afghanistan — the Surkhon-Puli Humri high voltage electricity line to allow Uzbekistan to supply electricity to Afghanistan and the CASA-1000 regional electricity project supplying surplus electricity from Tajikistan and Kyrgyzstan — will pass by the same communication lanes and will distribute construction expenses among the three projects.

Tashkent has further arguments in favor of prioritizing access to Pakistani ports. The project presents new opportunities to all participants. For Pakistan and other countries, such as India, the road would open opportunities for connecting with markets of the Commonwealth of Independent States (CIS) by rail. Currently, these trade relations are supported by sea routes only.
Riaz Haq said…
Of #Pakistan's total $66 billion of annual #trade in 2020, #China accounted for $11.2 billion & North #America $6.76 billion. It plans to grow trade with 5 landlocked Stans in #CentralAsia to $1.5 billion a year from less than a billion in past decade.

The South Asian nation is looking to finalize a new trade accord with Kabul by June, Abdul Razak Dawood, the commerce adviser to Prime Minister Imran Khan, said in an interview in Islamabad. It plans to grow trade with five landlocked Central Asian nations -- Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan and Kazakhstan -- to about $1.5 billion a year from less than a billion in the past decade, he said.

“We’re too restricted to a few countries -- North America, European Union and China,” said Dawood. “But there is a much bigger world.”

The U.S. withdrawal from Afghanistan promises a return of stability and provides an opportunity to Pakistan to strengthen commerce with its neighbor, which sits at the cross-roads of South and Central Asia. Also, Islamabad stands to benefit from greater trade with Central Asian markets that are rich in energy resources needed to feed its ambition to grow its industrial base.

Read: Biden Pulls the Plug on Afghan War at Risk of Turmoil Ahead

Pakistan is due to sign transit and preferential trade agreement with Uzbekistan in July, Dawood said.

The South Asian economy’s move to scout for newer markets stems from the need to diversify its trade basket that’s heavily reliant on the U.S., EU and China. Of its total $66 billion of annual trade in the year ended June 2020, China accounted for $11.2 billion and North America $6.76 billion, according to data from State Bank of Pakistan.

Analysts see the new push in the context of Pakistan’s geo-strategic framework, which draws from the economic cooperation espoused by Chinese President Xi Jinping’s Belt and Road Initiative.

While China has channeled investments toward electricity generation in Pakistan as part of its Belt and Road Initiative, it’s financing has also been focused on gas- and oil-based projects for exploration and distribution in Central Asia.

“Economy is one part of the strategic outlook,” Vaqar Ahmed, joint executive director at Sustainable Development Policy Institute said. “Ultimately you would need economy, trade and investment cooperation to keep excitement in your strategic interests.”
Riaz Haq said…
#Trade-growth bid sees #Pakistan look nearer to home in #CentralAsia.“We’re too restricted to a few countries,” Abdul Razak Dawood, the commerce adviser to PM Imran Khan, said in an interview. “But there is a much bigger world.” #exports via @business

Trucks carrying processed leather from Uzbekistan have arrived in Pakistan, a sign that the southern Asian economy’s efforts to expand land trade in its neighborhood are paying off.

The arrival of the cargo in the northwestern Pakistani city of Peshawar via Afghanistan marks the first step in Islamabad’s goal to grow commerce with central Asian nations to about $1.5 billion per year from less than $1 billion in the past decade.

Pakistan’s focus on central Asia is a departure from its reliance hitherto on three key markets — North America, European Union and China. Expanding trade with resources-rich Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan and Kazakhstan also fits Islamabad’s ambition of growing its industrial base.

“We’re too restricted to a few countries,” Abdul Razak Dawood, the commerce adviser to Prime Minister Imran Khan, said in an interview. “But there is a much bigger world.”

Pakistan is due to sign a transit and preferential trade agreement with Uzbekistan in July, he said, adding that an accord with Afghanistan would also be wrapped up by June.

Analysts see the new push in the context of Pakistan’s geo-strategic framework, which draws from the economic cooperation championed by Chinese President Xi Jinping as part of his Belt and Road Initiative.

While China has channeled investments toward electricity generation in Pakistan as part of its BRI deals, it’s financing has also been focused on gas- and oil-based projects for exploration and distribution in central Asia.

“Economy is one part of the strategic outlook,” said Vaqar Ahmed, a joint executive director at the Sustainable Development Policy Institute. “Ultimately you would need economy, trade and investment cooperation to keep excitement in your strategic interests.”
Riaz Haq said…
Writer Fateh-ul-Mulk Ali Nasir argues in this TFT piece that #Afghanistan has illegally annexed #Badakhshan and #Nuristan regions of #Chitral in contravention of the #Durand agreement with the #British #Indian government in 1893. Both belong to #Pakistan

Clause (3) of the Durand Agreement states, “The British Government thus agrees to His Highness the Amir retaining Asmar and the valley above it, as far as Chanak. His Highness agrees, on the other hand, that he will at no time exercise interference in Swat, Bajaur, or Chitral, including the Arnawai or Bashgal Valley.”


Chitral’s relationship with Afghanistan has been a complex one. It is impossible to examine Chitrali history and culture without seeing influence from Badakhshan, Wakhan and Nuristan. Chitral is at least as connected to northeastern Afghanistan as it is to Gilgit-Baltistan, in many ways perhaps more so to the former. In this analysis we will not be discussing ancient history, but the relations between the post 1747 Durrani State of Afghanistan and Chitral State, particularly after the British Protectorate had been established and the British Raj started to handle Chitral’s external affairs. The Durand Line, in particular, is a heated issue but one aspect which is totally neglected by both Afghanistan and surprisingly, Pakistan, is the fact that two erstwhile regions of Chitral which had expressly been mentioned in the Durand Agreement as falling within the political sphere of the British Raj, have been annexed by Afghanistan in contravention to the treaty!

Surprisingly, British India took Chitral’s territorial integrity seriously and did not cede the Upper Kunar Valley or the Bashgal Valley of Kafiristan (now Nuristan) to Afghanistan


Two very important points are made here. The first being that Afghanistan accepted that the Upper Kunar Valley (Arnawai) and Eastern Nuristan (Bashgal) are parts of Chitral and thus outside of Afghanistan, and that secondly, they would not interfere in these regions. The Afghans broke both of these promises within two years of signing the treaty by conquering and converting to Islam the ancient indigenous polytheistic people of Bashgal and by occupying two Chitrali forts in the Upper Kunar Valley, Narai and Birkot. The British turned a blind eye to these events as they occurred during the tumultuous year of 1895, when Chitral itself was about to break away from the British sphere of influence. Chitral subsequently became a princely state and thus lost any capacity to conduct foreign relations. Chitral was forced to cede further territory in Kunar when the village of Dokalam was handed over to Afghanistan. The people of the Bashgal Valley, though, continued to look to the Mehtar as their traditional leader and during the Third Anglo-Afghan War, Chitral tried to reassert its control over Bashgal and Upper Kunar when the Bashgal tribesmen welcomed the Chitral forces in Gawardesh and Kamdesh and pledged allegiance to the Mehtar. The Chitralis also recaptured Birkot in Kunar. The British, though, refused to recognize these actions and chose to reestablish the status quo antebellum. In other words, the British chose to disregard the treaty that they themselves drafted, but there is no reason why the successor state, Pakistan, must continue to do the same!

Riaz Haq said…
#US, #Afghanistan, #Pakistan, #Uzbekistan to form quad group to enhance regional connectivity for #rade, #transit links. The new quad group is important amid #China's desire to extend its Belt Road Initiative (BRI) to Afghanistan. #BRI #CPEC #SilkRoad

The US, Afghanistan, Pakistan and Uzbekistan have agreed in principle to establish a new quadrilateral diplomatic platform focused on enhancing regional connectivity, the Biden administration has said.

“The parties consider long-term peace and stability in Afghanistan critical to regional connectivity and agree that peace and regional connectivity are mutually reinforcing,” the State Department said on Friday.

Recognising the historic opportunity to open flourishing interregional trade routes, the parties intend to cooperate to expand trade, build transit links, and strengthen business-to-business ties, it said.

“The parties agreed to meet in the coming months to determine the modalities of this cooperation with mutual consensus,” said the State Department.

Afghanistan’s strategic location has for a long time been touted as a competitive advantage for the country. Afghanistan is bordered by Pakistan to the east and south, Iran to the west, Turkmenistan, Uzbekistan, and Tajikistan to the north, and China to the northeast.

Located at the heart of the historic Silk Road, Afghanistan was long the crossroads of commerce between Asian countries connecting them to Europe, and enhancing religious, cultural, and commercial contacts.

The formation of the new quad group is important amid China's desire to extend its Belt Road Initiative (BRI) to Afghanistan.

The BRI, a multi-billion-dollar initiative launched by Chinese President Xi Jinping when he came to power in 2013, aims to link Southeast Asia, Central Asia, the Gulf region, Africa and Europe with a network of land and sea routes.

By virtue of its location, Afghanistan can provide China with a strategic base to spread its influence across the world.

Since the announcement of the withdrawal of U.S. forces by August 31, violence has been rising and efforts to broker a peace settlement between the Afghan government and insurgent Taliban have slowed.
Riaz Haq said…
Pakistan’s geo-economics is working well. Despite their friendly relations with #China (& #Russia), both #Uzbekistan & #Pakistan (biggest 2 nations in Greater Middle East) are eager to deepen ties with the #US. China has huge stakes in Pak & #Afghanistan

The parties agreed to meet in the coming months to determine the modalities of this cooperation with mutual consensus.

The US is intensely conscious that its prestige in the region is at its nadir today and it stands isolated, as the reported cheeky Russian offer volunteering to be America’s gatekeeper shows.

Uzbekistan, Afghanistan and Pakistan are also Muslim countries and they provide a market of around 300 million people. No doubt, the US did its homework. This QUAD has viability unlike its insipid namesake in the “Indo-Pacific.”

In the recent years, the US has been paying extra attention to cultivate friendly ties with Uzbekistan, which is not only the biggest country in Central Asia but a relative success story regionally in political stability and overall developmental trajectory.

Tashkent has been receptive to Washington’s overtures, as strong ties with America help it to balance Russia and will strengthen its strategic autonomy.

The new Quad signals the US’ receptiveness to Pakistan’s persisting demand for a bilateral relationship that goes beyond Afghan issues. There are fault lines in the China-Pakistan relationship, which are no more possible to conceal, and in Washington’s judgment, Pakistani elites, civilian and military, have remained as western-oriented as ever despite their alienation in the recent decade.

To be sure, with the curtain coming down on the Afghan war, the time has come for establishing rail/road links connecting Central Asia with Karachi/Gwadar ports. The expected improvement in the security situation allows mega projects to be implemented. Conceivably, the Taliban would have no reservations over the QUAD. The Pakistani ports are ideally placed to connect the resource-rich Central Asian region and Afghanistan with the world market.

Clearly, by having both the CPEC and the QUAD on its platter, Pakistan is tasing success in its foreign-policy shift toward geoeconomics. Pakistan’s geography makes it a turf for competition between China and the West in infrastructure development. Simply put, the new QUAD will impact regional politics.

Indeed, the US hopes to wean Pakistan away from its heavy dependence on China. The new QUAD will make India look an outlier drifting aimlessly without a sense of direction. India turned its back on China’s BRI but Pakistan secured the $60 billion CPEC and is now looking forward to the US-led QUAD.

India’s relations with China are in deep chill and its traditional friendly ties with Russia have become listless, whereas, Pakistan not only enriched its ties with China but is successfully exploring the multipolarity in the world order.

On July 16, Pakistan and Russia signed a mega deal for a 1100 km gas pipeline project costing between $2.5 – $3 billion connecting Karachi and Lahore which will transport imported LNG (for which it has separately signed a deal with Qatar whereby 200 mmcfd of gas will initially reach Karachi’s LNG terminal in the beginning of next year that would be enhanced to 400 mmcfd in the coming years.) Whereas, India’s gas pipeline project with Iran has been languishing as pipe dream. read more

Pakistan is anxious to have President Putin inaugurate the groundbreaking of the gas pipeline project, which is expected to be held later this year or in early 2022. Delhi should seriously introspect whether its passionate embrace of the US bandwagon through the past decade under successive governments, brought any significant dividends.

Pakistan is once again becoming a frontline state in big-power rivalry. But this time around, Pakistan stands to gain out of its geography and hopes to create equity for its development.
Riaz Haq said…
Pakistani leaders have repeatedly signaled a shift from ‘geopolitics’ to ‘geo-economics’ in recent months

Pakistan’s pivot from ‘geopolitics’ to ‘geo-economics’ came into sharp focus recently as Prime Minister Imran Khan concluded his visit to Uzbekistan. The term has been repeatedly brought up since the beginning of this year – first when the premier visited Sri Lanka in February and then in March, when both the army chief and Pakistan’s foreign minister announced in clear words the country’s developing geo-economic vision for its future.

The Uzbekistan trip, which spanned July 15 and 16, culminated in a slew of agreements across a range of sectors, from trade to culture. Among other things, the two nations agreed to finalise a preferential trade agreement (PTA) within three months to boost bilateral trade volume, which for now is far below potential. But perhaps most the significant one was a deal to enhance rail links between the two nations via Afghanistan.

The benefits of this particular agreement appear obvious. For the landlocked Central Asian nation, greater connectivity will allow it access to Pakistan’s three ports in Gwadar and Karachi.

For Pakistan, however, the end goal goes beyond more trade opportunities with resource-rich Central Asia. Linking Gwadar and Karachi to the 11-nation Central Asia Regional Economic Cooperation (CAREC) corridor would open the country and the China Pakistan Economic Corridor to both Russia and Europe – the benefits of which, most observers agree, would be unimaginable.

But Pakistan’s pivot seems to be taking shape in a crowded geopolitical space that poses a new set of challenges.

A battle of ‘new world orders’

In his first news conference in March, US President Joe Biden kept observers on their toes by dubbing his country’s great power competition with China a ‘global ideological fight between democracy and autocracy’. His language signified the emergence of a new divided world, the likes of which had not been seen since the end of the Cold War.

The 1990s saw the emergence of a unipolar world, perhaps for the first time in human history, as the Soviet Union disintegrated and the US, starting with Iraq and Kuwait, discovered it could decide global matters alone. Empowered by its technological and military supremacy, the US cemented its lone influence over major trade routes, like the straits of Malacca and Hormuz, and thus found itself in control of other nations economic and energy bloodlines. Through organisations it led, like the World Bank and IMF, the US also strengthened its global financial influence around the same time.

Against this backdrop, the China-led OBOR appears to contest the old US-led ‘new world order’ by providing alternative strategic routes to the ones the latter controls. Simultaneously, China’s rapid military modernisation, especially in terms of naval power projection, threatens America’s singular dominance of the seas.

Beijing’s large-scale investment in various regions, likewise, has appeared as a challenge to US financial might and the latter has already fired the first salvo in an emerging economic war by slapping sanctions on certain Chinese firms.


Speaking on internal challenges, former principal economic advisor and prominent economist Sakib Sherani said the implementation of geo-economics strategies would become near impossible for Pakistan if reforms in various areas are not implemented. “Take for example taxation, the system is so flawed that the entire burden is on formal and registered businesses instead of informal or unregistered businesses. Which is why informal sector in the country is growing,” he stressed. “It is not only affecting the government’s revenue but discouraging direct foreign investment as well,” he added.
Riaz Haq said…
#Chinese business leaders confident in #Pakistan after meeting with PM #ImranKhan. Khan has promised to chair a monthly meeting to address their concerns. #CPEC #China #infrastructure #Business #trade #Industry - Global Times

Several Chinese business leaders on Tuesday expressed increased confidence in their operations in Pakistan after attending a meeting with Prime Minister Imran Khan of Pakistan on Monday that was aimed at addressing Chinese firms' concerns regarding policy support and security after recent terrorist attacks.

During the meeting with a delegation of Chinese business leaders, Khan vowed to chair a monthly self-review meeting to address their concerns, according to local media, sending a strong signal that the Pakistani government attaches great importance to Chinese companies.

Zhang Shilu, general manager of Zhengbang Agriculture Pakistan (Pvt) Limited, who attended the meeting, told the Global Times on Tuesday that the meeting was held in response to concerns that have gripped Chinese investors.

"Chinese enterprises encountered some difficulties in doing business in Pakistan and we expressed our expectations to the Pakistani Prime Minister, who showed that Pakistan attaches great importance to the development of Chinese enterprises in Pakistan. It greatly increases the confidence of Chinese enterprises," Zhang said.

He added that at the investment meeting, representatives of Chinese enterprises voiced their hopes that Pakistan could introduce an industrial park management committee - a common practice in China - to simplify approval processes.

Zhengbang Agriculture currently produces pesticides, including insecticides, fungicides, and herbicides and fertilizers in Pakistan, which are used on all types of crops in the country, including cotton, rice, wheat, citrus and mangoes.

According to Pakistani Prime Minister's Office Twitter account, Chinese enterprises that attended the meeting included OPPO, Shanghai Challenge Textile Co, and Easy Prefabricated Homes Pvt, a subsidiary of Henan D.R. Construction Group Co.

George Long, CEO of OPPO Pakistan, told the Global Times on Tuesday that the company was hoping for some form of preferential tax treatment and land policies from the Pakistani government to support its R&D and high-tech production. This would boost local employment and local tech supply chains would also be steadied, Long said.

The Chinese phone vendor's foray into the Pakistan market began in 2014 and it has built 17 aftersales services centers and more than 5,000 retail outlets across the country. "We're confident about expanding investment in Pakistan and bringing quality smart gadgets to the people of Pakistan," Long said.

A manager surnamed Jin with Henan D.R. Construction Group who participated in Monday's meeting told the Global Times that the agenda of the meeting included difficulties for Chinese-funded firms in the local industrial park that include land purchases and natural gas and power supplies.

In October 2019, the company purchased 6.1 acres of land in an industrial park as a factory production base, and started to build the factory after the land purchase procedures were approved in December 2019.

The company had been applying for power supplies and the use of natural gas, but no progress has yet been made, even though construction for the factory was completed in March. Pakistani authorities pledged to look into the matters, Jin said.

Participants in the meeting also discussed security issues that have been under the spotlight in the wake of recent terrorist attacks targeting Chinese personnel.

"After previous terrorist attacks on Chinese project personnel, Pakistan has equipped our factories with a special protection unit," said Jin, adding that the company remains upbeat about investment and business expansion in Pakistan, citing favorable investment policies.
Riaz Haq said…
"#US policy in #Afghanistan is now reduced to “women and girls,” which ignores that leaders in Central & South Asia are also responsible for women & girls. #America should not allow its differences with the #Taliban to block regional #trade arrangements"


What should the U.S. do?

Don’t be the spoiler: Blocking projects that may benefit the economies of Afghanistan and Pakistan will push Central and South Asia into the arms of Russia and China.

Connectivity between Central Asia and South Asia is needed if the regions are to escape the gravitation pull of Russia and China. Turkmenistan and Uzbekistan, which border Afghanistan, have established relations with the Taliban government as many key economic projects require stability in Afghanistan.

In February 2021, representatives of Uzbekistan, Afghanistan, and Pakistan agreed to a roadmap for the Mazar-i-Sharif-Kabul-Peshawar railway project, a 600-km track to be built over five years. The rail project will run alongside regional power projects — the 1,000-megawatt Surkhan-Puli-Khumri high-voltage power line and the 1,300-megawatt CASA-1000 energy project — that supply power to Afghanistan and Pakistan. The final key project is the stalled 1,100-mile Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural-gas pipeline that can ship 33 billion cubic meters (bcm) of gas annually, and will relieve Ashgabat of Beijing’s leverage as China currently receives 90 percent of Turkmenistan’s gas.

Pakistan has successfully arbitraged its location by supporting the U.S. in two wars in Afghanistan and reaping significant financial benefits in the process. It is a partner with China in the $62 billion China Pakistan Economic Corridor (CPEC), the largest project in the Belt and Road Initiative. Now Pakistan may be Central Asia’s partner linking the region to maritime trade routes via the ports of Karachi and Gwadar, and Pakistan’s large internal market of over 200 million people, 60 percent of them under the age of 30.

In Afghanistan, the U.S. and Pakistan weren’t even fighting the same war. U.S. officials have accused Pakistan of a “double game,” but Islamabad was eyeing the “next game” — the conflict with India. The U.S. anticipated a formal end of hostilities after it defeated the Taliban and restructured Afghan society, but Pakistan knew even if the U.S. departed in victory, it would still have India to contend with and war in Afghanistan was just a way to position itself for the next phase of the struggle. Pakistan could use the Taliban to build “strategic depth,” recruit fighters it could deploy against India in Kashmir, and be paid for helping Uncle Sam. The Pakistani generals were channeling Paul von Hindenburg who, when he recommended the annexation of the Baltic Provinces into the German Empire said, “I need them for the maneuvering of my left wing in the next war.”

America sees wars as finite events that end at Appomattox Courthouse or on the battleship Missouri; Pakistan sees war as a process.

U.S. policy in Afghanistan is pretty much now just “women and girls,” which ignores that leaders in Central and South Asia are also responsible for women and girls. The U.S. should not allow its differences with the Taliban to block regional trade arrangements — which will have to include the Kabul government — and thereby hand a political win (and financial windfall) to Russia and China by limiting the region’s trade options.

A bill has been introduced in the U.S. Senate, the “Afghanistan Counterterrorism, Oversight, and Accountability Act of 2021,” that, among other things, directs the Biden administration to “develop a revised strategy for South and Central Asia,” and also requires an assessment of Pakistan’s support for the Taliban from 2001 to 2021.
Riaz Haq said…
NHA gears up to link CPEC M-14 with Pakistan-Afghanistan border

ISLAMABAD: The federal government has decided to connect Ghulam Khan in North Waziristan with Motorway 14 (M-14), a project of the western alignment route of China-Pakistan Economic Corridor (CPEC) via a 184km-long Motorway.

According to Gwadar Pro on Tuesday, the National Highway Authority (NHA) on Monday issued a request for proposal (RFP) of consultancy services for the Feasibility Study and Detailed Design for the Construction of the Motorway from Ghulam Khan to Esa Khel Interchange (184km approx).

The project will be financed by the Federal Government through PSDP 2022-23 through separate head/allocation.

In this regard, a pre-proposal conference on the project will be held on July 19, 2022, at NHA headquarters in Islamabad while procurement will be carried out by adopting the “Single Stage Two Envelops” procedure.

The proposals complete in all respects in accordance with the instructions provided in the RFP document in sealed envelopes, which should reach on or before August 10, 2022.

Esa Khel Interchange is located over M-14 in Mianwali district of Punjab, which is in proximity to the Lakki Marwat district of Khyber Pakhtunkhwa (KP). Between Mianwali and Ghulam Khan falls Bannu district of KP. After Torkham and Chaman, Ghulam Khan is the third most important crossing between Pakistan and Afghanistan.

Afghanistan has already started benefiting from Gwadar Port and the country received the first consignment of bulk cargo from the United Arab Emirates in July 2020. Ghulam Khan crossing, at the Pak-Afghan border point, is the shortest route connecting CPEC’s western route with Afghanistan, Central Asian States and beyond.

Riaz Haq said…
Pakistan, China aim to jump-start Belt and Road plans in key talks

“Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic,” an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.


Pakistan and China aim to revive Belt and Road projects in the South Asian country at an annual huddle, scheduled to take place virtually on Thursday. In the run-up to the talks, cash-strapped Islamabad appears to have accepted a Chinese demand to increase the cost of a railway, as it seeks to secure more financing.

This will be the 11th meeting of the Joint Cooperation Committee, the key forum for making decisions on the China-Pakistan Economic Corridor (CPEC), a $50 billion Pakistan component of the Belt and Road. Zhao Shiren, the Chinese consul general in Lahore, told local media earlier this month that work on the CPEC is expected to speed up after the JCC meeting.

The center of attention now is Main Line 1, or ML-1, a project that will upgrade 1,733 kilometers of railway track between Karachi and Peshawar. This is the largest CPEC project in terms of cost, and it has been awaiting a final decision for the past five years.

"Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic," an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.

In multiple background interviews, sources said other projects expected to get the nod include the Karachi Circular Railway at a cost of $1.33 billion and the Karakoram Highway realignment, valued at $1.8 billion.

Apart from these plans, another major issue up for discussion will be power projects. Beijing has built 12 power plants under the CPEC and Pakistan owes more than 250 billion rupees ($1.14 billion) in unpaid bills to the facilities. The JCC huddle is expected to deliberate on forming a revolving account for Chinese power producers so that they can get paid without getting entangled in Pakistan's web of debt.

Moreover, the JCC meeting might decide the fate of a 300-megawatt power plant in Gwadar -- a port intended to be a key Belt and Road hub. The Pakistani government would prefer to scrap the project as it scrambles to save money, whereas China seeks approval to start building it.

Aslam Bhootani, a member of the national assembly representing Gwadar, is not happy about the outlook. "No investment will come in Gwadar" unless the area's power problems are resolved, he said. "Scrapping the 300 MW power plant will not help in this situation."

Experts are on the fence about the prospects for rejuvenating the CPEC.

Michael Kugelman, director of the South Asia Institute at the Wilson Center, said the CPEC is in a holding pattern, with no new projects and existing projects moving very slowly out of caution over Pakistan's economic crisis, with its foreign reserves falling dangerously low.

"Given Pakistan's severe economic stress, as well as China's own recent slowdown," he said, "there will be little space for any type of new economic activity."

But the Pakistani government does have an incentive to stay in China's good books. Next week, soon after the JCC, Prime Minister Shehbaz Sharif is scheduled to visit China. This will be his first visit to Beijing as leader.
Riaz Haq said…
Pakistan, China aim to jump-start Belt and Road plans in key talks

According to media reports, Sharif will likely seek $10 billion in financial assistance from China, through balance of payment support and rolling over Chinese loans, which make up 30% of Pakistan's total external debt. Experts believe the Sharif government wants the JCC to be successful so that it can secure the required financial support from China during the prime minister's visit.

Despite his skepticism and the CPEC's sputtering progress, Kugelman also suggested Sharif might be the man to restore some momentum. "It was Prime Minister Sharif's brother [Nawaz Sharif] who launched the CPEC, and there's reason to believe Beijing is more comfortable working with the ruling PML-N party than with Imran Khan's PTI, which asked questions about transparency [of CPEC projects] that China didn't like," Kugelman told Nikkei.

While Sharif is planning to revive the CPEC, his political nemesis Khan is in full-throttle mode to topple his government. Even after suffering a setback last week with his disqualification from office over alleged mishandling of foreign gifts, Khan has announced a long march from Lahore to Islamabad starting Friday, demanding Sharif's resignation and fresh elections. Initially, it appeared Khan might be barred from politics for years but for now he has only been stripped of his seat in parliament.

Government officials fear the political uncertainty could jeopardize any gains made at the JCC meeting.

The instability is a problem, said James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. But he said Beijing has already factored it in when making decisions about CPEC projects.

"Beijing knows that the ML-1 project is also in the interest of Pakistan and even if Khan again formed the government, he cannot reverse it," Dorsey said.

He added that the Belt and Road, in general, has been slowing down, and that efforts made to revive the CPEC are partly Beijing's attempt to fire up its broader global infrastructure drive.
Riaz Haq said…
China, Pakistan Agree to Launch $10 Billion Railroad Project
Two countries plan to upgrade line from Karachi to Peshawar
Pakistan officials have said they expect funding from China
By Faseeh Mangi

Chinese President Xi Jinping and Pakistani Prime Minister Shehbaz Sharif agreed in a meeting in Beijing to launch a high-speed rail project that could cost $9.85 billion, a move that comes as the world’s No. 2 economy moves to slow some of its lending due to growth concerns.

The two nations agreed to get started on the Main Line-1, according to a statement from Sharif’s office, which described it as “a project of strategic importance.”

That project involves upgrading a 1,163-mile, colonial-era track from Karachi to Peshawar to carry high-speed trains. Earlier this week, Pakistan formally approved the project, which has been in discussion for years, without saying where the funding would come from or providing technical details.

Officials in Pakistan have previously said they expected to get loans from China for the upgrade.

The US has in the past criticized China for using what it calls “debt diplomacy” to make developing nations more dependent on Beijing. Still, earlier this year China delayed a bailout for Pakistan as its debt soared, and it has been scaling back lending in Africa as its economy slows.

About 30% of Pakistan’s foreign debt is owed to China, including state-owned commercial banks, the International Monetary Fund said in a report in September.

In June, Moody’s Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns.

See: Xi Kicks Off Third Term With Flurry of Diplomatic Activity

In their talks, Xi and Sharif agreed to finalize details on an inner-city rail line in Karachi. The Chinese leader also said his nation would provide 500 million yuan ($68.7 million) to Pakistan to help it rebuild after flooding over the summer that displaced more than half a million people.

Also Wednesday, the two countries’ central banks signed a memorandum of cooperation on a yuan clearing in Pakistan, the People’s Bank of China said in a statement. It didn’t give more details.

Sharif is wrapping up a two-day visit to Beijing. China is hosting a flurry of foreign leaders this week, as Xi kicks off a norm-busting third term during which he’s vowed to increase his nation’s global influence.

Vietnam’s Communist Party chief Nguyen Phu Trong became the first foreign leader to meet Xi since the Chinese president removed rivals and installed loyalists at a leadership reshuffle last month.

Xi and his top officials are then expected to hold talks in the capital with German Chancellor Olaf Scholz and Tanzanian President Samia Suluhu Hassan. Later this month, he will likely travel to Indonesia and Thailand for major summits attended by global leaders including President Joe Biden and Russia’s Vladimir Putin.

Riaz Haq said…
CPEC an exemplar of high-quality Belt and Road cooperation

Pang Chunxue, deputy head of mission, Chinese Embassy, has said that China is planning to further deepen synergy between its development strategies and those of Pakistan.

The Islamabad Institute of Conflict Resolution (IICR) organized a policy conclave here in Islamabad, titled "CPEC's Defining Moment: Prospect and Challenges".

China and Pakistan will make full use of the Joint Cooperation Committee of the China-Pakistan Economic Corridor (CPEC), advance the CPEC with greater efficiency, and make the CPEC an exemplar of high-quality Belt and Road cooperation, Pang said while addressing the session.

While highlighting the benefits of the CPEC she said that as the landmark project of the BRI, CPEC has achieved fruitful results, bringing in $25.4 billion in investment, helping to add 6040 MW of electricity, 886 km of core national transmission network and 510 km of highways.

Under promotion of the CPEC, Pakistan's energy shortage has been greatly addressed, transport infrastructure has been improved, and local people have gained a large number of employment opportunities.

Lastly, she said that China will always put Pakistan as its priority for cooperation and work in joint hands to address various risks and challenges at the regional and international levels, deepen the China-Pakistan all-weather strategic cooperative partnership, and build a closer China-Pakistan community with a shared future in the new era.
Riaz Haq said…

Country with a high share of biomass: Pakistan
Pakistan has a high share of biomass in its energy consumption, which is expected to gradually reduce
as the share of natural gas increases. While Pakistan has a well-diversified energy supply overall,
with availability of oil, natural gas, coal, nuclear, and hydropower, it is expected to promote the use of
renewables considering future cost efficiencies and high technical potential.


Only two CAREC member countries currently operate nuclear power plants—Pakistan (1 GW of installed
capacity) and the PRC (48 GW). Both countries view nuclear power as a key part of their national energy
systems that provides a stable baseload of electricity. Two other members, Kazakhstan and Uzbekistan,
have initiated large-scale nuclear power plant projects, with commissioning planned prior to 2030. Both
countries are major producers of uranium, a key fuel for nuclear power plants, with Kazakhstan being the
largest producer of uranium globally. While nuclear power can offer significant advantages in terms of
scale and reliable power generation, a comprehensive system of security safeguards should be in place
to prevent malfunction and guarantee safe management of nuclear waste while respecting international
non-proliferation agreements.


Several countries are also working on liberalizing their energy markets by shifting from vertically integrated
state-owned companies to unbundled energy markets. Such market structures reduce uncertainties for
private investors. For example, Tajikistan has unbundled Barqi Tojik, a vertically integrated electric utility,
into three independent companies, with each in charge of a different function: electricity generation,
transmission, and distribution. Georgia introduced power generation rules that were approved in 2020
in line with the principles of market liberalization, establishing a competitive electricity market. Pakistan
approved a comprehensive framework and implementation plan in 2020 aimed at building a competitive
wholesale power market by 2022.


The CAREC region’s cross-border ties and possibilities for trade provide another opportunity for investors.
For instance, the Central Asian Power System (CAPS) interconnects Central Asian countries (Kazakhstan,
Kyrgyz Republic, and Uzbekistan, with Tajikistan expected to be reconnected in 2022) at different voltage
levels. Some other large interconnection projects include the Trans Anatolian Natural Gas Pipeline,
supplying natural gas from Azerbaijan via Georgia to Türkiye and Europe; the Turkmenistan–Afghanistan–
Pakistan Power Interconnection; and the Turkmenistan–Afghanistan–Pakistan–India gas pipeline. While
predictions as to whether and when the last two projects can be commissioned are difficult because of
the political situation in Afghanistan, these projects highlight the solid potential of regional trade in the
CAREC region


Almost 200 nations agreed to phase down coal usage at the 26th United Nations Climate Change
Conference of the Parties (COP26) in Glasgow in 2021 to tackle climate change. Forty-six nations stepped
up their pledges to phase out coal-fired power plants and only build new plants under the condition they
are equipped with carbon capture, utilization, and storage (CCUS) technology (Rives 2021). The Glasgow
Climate Pact calls on countries to revisit their emission reduction targets by the end of 2022 to try to
keep the 1.5°C Paris Agreement target achievable. More than 100 countries signed the Global Methane
Pledge announced by the US, EU, and other partners at the COP26, agreeing to reduce their overall
emissions by 30% by 2030, compared to 2020 levels (Maizland 2021). Seven CAREC countries (Georgia,
Kyrgyz Republic, Mongolia, Pakistan, the PRC, Tajikistan, and Uzbekistan) have submitted stronger NDCs

Riaz Haq said…

Total installed power generation capacity in Pakistan is 34.5 gigawatts (GW), and consists
mostly of thermal generation, reaching around 66% of the total. The significance of thermal
generation is expected to decrease in the future, since the government has set a course to shift
toward increasing renewable energy (including hydropower) generation. Pakistan’s massive
renewable energy potential—about 3.0 terawatts (TW)—is one of the key drivers of this shift
(Figure 66).
• Pakistan’s domestic energy production consists of oil, natural gas, and coal. However,
insufficient investment in exploration and development activities has made the country
rely heavily on imports—nearly 40% of its total primary energy supply is imported. Having
insufficient cross-border infrastructure and no operating cross-border pipelines for the transit
of natural gas and oil, Pakistan imports energy sources mostly via coastal terminals.
• Final energy demand in Pakistan was about 96 million tons of oil equivalent (toe) in 2018, and
is projected to reach 108–126 million toe in 2030, depending on the scenario. Natural gas is
expected to increase its share in the total energy supply, while reliance on biomass will decrease,
leading toward a cleaner future for residential consumers.
• The country has vast renewable energy resources, with total technical potential reaching
2,900 GW for solar, 340 GW for wind, and 60 GW for hydropower (Faizi 2020; UNIDO 2016).
Increasing the share of hydropower could help in terms of grid balancing, solving the issue of
solar and wind intermittency.
• In addition to the development of renewable energy and alternative sources, such as nuclear
power, priority investments in Pakistan include the introduction of smart metering and smart
grids, as well as energy efficiency measures.
• Further development of the transmission and distribution (T&D) network is crucial for
the country, as 25% of the population is not grid-connected and thus has no access to the
electricity network.
• Total investment needs for the energy sector vary significantly across all three scenarios—
from $62 billion to $155 billion—illustrating the significant requirements for transitioning
to more sustainable sources of energy generation and implementing extensive energy
efficiency measures.
• Pakistan’s energy sector presents significant investment opportunities because of its efforts
to transition to a more competitive energy market structure, its continued support for private
projects, and the government’s commitment to significantly develop renewable energy sources
in the future.
• Several challenges need to be addressed to introduce a more favorable investment climate,
including circular debt issues, and the overall condition and coverage of the T&D grid.
Riaz Haq said…

Energy Sector Profile
Country Profile
Pakistan is the world’s fifth most populous country, with a population of more than 225 million people
and a $264 billion nominal gross domestic product (GDP), as of 2020. Pakistan’s population and economy
have grown at a steady pace, with the GDP growing annually by 4%–6%, and the population by 2%, since
2015. While the coronavirus disease (COVID-19) pandemic has slowed down economic growth to
0.5% in 2020, Pakistan is expected to recover, with a projected economic annual growth rate of nearly 6%
until 2025.
Pakistan’s energy sector is highly dependent on fossil fuel imports. Due to insufficient exploration and
development activities, the country is a major importer of fossil fuels, such as oil and coal. Moreover, issues
with ever-increasing demand and an inability to meet needs with existing power generation capacities
have forced consumers to use biomass as means of cooking and heating, especially in the agriculture
sector, which makes up most of the GDP. On the other hand, being one of the largest countries in the
region, Pakistan has vast renewable resources, such as hydropower, solar photovoltaic (PV), and wind, as
well as experience in power generation from nuclear power. However, the share of electricity production
from renewables has been decreasing since 2015, with fossil-fuel based generation on an upward trend in
development (Figure 67). This has led to increases in carbon intensity, putting Pakistan in 95th position
out of 172 countries in 2018. Energy efficiency measures in Pakistan require further development and
implementation. The country was ranked the 87th most energy-intensive economy in the world in 2018.


Energy Sector and Technologies Assessment
Conventional Fuel Production
Pakistan’s domestic energy production consists of oil, natural gas, and coal. The country also has significant
undeveloped oil and gas potential. However, insufficient investment in exploration and development
activities due to pricing policies has limited Pakistan’s ability to achieve security of supply through domestic
energy production.
Domestic oil production in the country amounted to around 4 million tons in 2019, while total import
volume was more than 10 million tons. The main production sites are located in Punjab and Sindh
provinces. The country is also planning to expand its refinery capacities to meet growing demand,
with a target capacity of 48 million tons per year by 2030. In 2019, total natural gas production stood at
33 billion cubic meters (bcm), slightly lower than domestic demand. The Sui Gas field is the largest natural

gas field in Pakistan, accounting for 10% of total domestic production (Pakistan Petroleum Limited).
However, major oil and natural gas fields in the country are in the later stages of their lifecycle, with
gradually declining production volumes.
Coal in Pakistan is mainly produced in Balochistan, Punjab, and Sindh provinces. While production was
only 3.3 million tons in 2015, the country expanded its production to nearly 6.8 million tons in 2019.
However, the country still imported approximately 15 million tons of coal to satisfy demand. Overall, coal
resources in Pakistan are estimated at more than 3 billion tons.

Riaz Haq said…

Electricity Generation
Pakistan’s electricity sector has a total installed capacity of 34.5 GW, with thermal generation dominating
the power mix, having a share of 66% (National Transmission and Despatch Company 2020). Gas-fired
plants are the main source of power, having an installed capacity of almost 9.3 GW, while oil-fired power
plants have 6.5 GW installed capacity and coal-fired plants have 4.6 GW. Since the regulatory framework
allowed independent power producers to develop generation projects, multiple new thermal power
plants were constructed. As the country’s oil and natural gas reserves are diminishing, further growth in
alternative energy sources is needed.
Historically, hydropower was one of the main sources of electricity generation in Pakistan. The total
hydropower resource potential is estimated at 60 GW (Faizi 2020). However, with the expansion of
thermal power, its share in electricity has declined significantly and currently holds a 29% share of total
installed capacity. The country has 30 hydropower plants in operation, with a total installed capacity
of 9.9 GW, including 17 categorized as major hydropower and 13 as small hydropower units operating
mainly as a run-of-river units. The three main projects are Tarbela Dam (4.8 GW installed capacity),
Ghazi–Barotha (1.4 GW), and Mangla Dam (1.1 GW). Tarbela and Mangla dams, commissioned in the
1970s, are considered the main contributors to hydropower generation. To enhance the quality and
reliability of supply, Mangla Dam is planned for refurbishment, and Tarbela Dam for extension.
Pakistan’s first nuclear power plant, Karachi Nuclear Power Plant (KANUPP), began operations in 1970,
with a capacity of 100 megawatts (MW). Since then, nuclear power generation has experienced active
growth, and current capacity is 2.5 GW. Cross-country cooperation is a cornerstone of Pakistan’s strategy
to reach its goal of 8,800 MW of nuclear installed capacity by 2030. Currently, one new reactor of
1,100 MW is being built.
The country’s renewable energy potential has been realized to only a limited extent. The theoretical
potential of total wind energy is estimated at 340 GW, with the southern wind corridors being the most
auspicious—the Gharo–Keti Bandar wind corridor has over 50 GW of potential alone. However, only
around 1.1 GW of wind energy capacity is currently in operation. Likewise, solar power has tremendous
potential—as high as 2,900 GW, only about 0.4 GW of which is installed as of 2021. Although projects such
as the Quaid-e-Azam Solar Park (0.4 GW capacity) were successfully implemented, the lack of political
commitment, land availability, and the lower performance of outdated PV plants installed earlier are among
the reasons for limited development of renewable energy. Additional potential solutions include offshore
wind, floating solar PV in existing hydropower reservoirs, and wind farms near hydropower plants with
integration into existing grid infrastructure.
Country Outlooks 2030—Pakistan 1

Power generation during fiscal year 2020 reached 121,691 GWh: 32% by hydroelectric plants, 57% by
thermal plants, 8% by nuclear plants, and 3% by renewable energy power plants.
Riaz Haq said…

Transmission and Distribution
Pakistan’s power T&D system is suffering from significant energy losses and disruptions. In 2020, 19.8%
of energy was lost during its transmission, distribution, and delivery to end consumers. Among the
10 distribution companies, losses vary greatly from 9% to 39% (NEPRA 2020). On average, the country
experienced 81 interruptions (system average interruption frequency index) lasting nearly 5,300 minutes
(system average interruption duration index) in 2020. The poor performance can be attributed to a
variety of factors, including poor technical conditions, insufficient collection rate of accounts receivable,
and issues with circular debt present in the country.
Pakistan had 7,470 kilometers (km) of 500 kilovolts (kV) and 11,281 km of 220 kV T&D lines in 2020.
Distribution companies are responsible for T&D activities below 132 kV. Importantly, only 74% of Pakistan’s
population is connected to the power grid. With high electricity losses and frequent outages, Pakistan is
planning to introduce advanced grid management infrastructure and metering. Advanced conductors and
other smart grid upgrades could help reduce T&D losses.
There are two operators in Pakistan’s natural gas T&D system: Sui Northern Gas Pipelines Limited
(SNGPL), covering the central and northern regions of the country; and Sui Southern Gas Company
Limited (SSGCL), covering the southern regions. Total grid losses accounted for nearly 17% by SSGCL and
11% by SNGPL in 2020. According to estimates, average leakage rate is 4.9 leaks per km for SSGCL, and
2.2 leaks per km for SNGPL (for comparison, this value equals 0.2 in Germany and 0.4 in Massachusetts, on
average). The gas pipeline systems require a major overhaul and modernization to increase the efficiency
of transportation and to reduce leakages.

Cross-Border Infrastructure
In terms of cross-border power interconnections, Pakistan has one operational line as of 2021:
Mand–Jakigur, connecting Pakistan and Iran, with a capacity of 104 MW. In addition, Pakistan,
Afghanistan, the Kyrgyz Republic, and Tajikistan, have launched the Central Asia–South Asia (CASA-1000)
project, a mega power interconnection project of 1,300 MW. Pakistan’s part of CASA-1000 is currently
under construction, and is expected to transport electricity from Tajikistan and the Kyrgyz Republic. The
uncertain political situation in Afghanistan, through which CASA-1000 will transit to reach Pakistan, has
rendered difficult any predictions as to when and if the project can be successfully commissioned.
Natural gas is imported via sea terminals, mainly through two terminals located in the Qasim and Karachi
ports, with a cumulative capacity of 12 bcm annually. As of 2021, there are no operating cross-border
natural gas pipelines in Pakistan. However, in response to growing demand, the government has been
planning the construction of natural gas pipelines to increase import capacity, with the Iran–Pakistan
pipeline expected to be commissioned by 2025. The Turkmenistan–Afghanistan–Pakistan–India (TAPI)
pipeline has been discussed since more than a decade, but its realization remains uncertain given the
situation in Afghanistan and other political tensions between the participating countries. Further efforts to
bridge the supply and demand gap are planned with the construction of two additional terminals, bringing
total import capacity to nearly 18 bcm per annum.
Riaz Haq said…

Oil is also currently imported via sea terminals. Oil terminals (the Karachi port, the Qasim port, and the
Balochistan refinery single-point mooring terminal) are located near Karachi and have a total import
capacity of 51 million tons per year (Table 6).
Energy Consumption
Pakistan’s industry is dominated mostly by small and medium-sized enterprises in sectors such as
leather, textiles, and food processing. Most entities use fossil fuels as feedstock and run on outdated and
inefficient equipment. Cement and brick industries in Pakistan have historically been the two main energy
consumer groups. The combined potential of energy efficiency measures for these industries represents
about 40% of the total industry energy savings potential. Key levers include switching to multistage dry
kilns for cement or the introduction of modern designs, such as zig-zagging for brick kilns. The National
Energy Efficiency and Conservation Authority (NEECA) has been a main driver of progress, having
recently implemented a mandatory energy efficiency policy for electric motors, showing the government’s
commitment to increasing energy savings. The NEECA also plays a prominent role in promoting energy

audits in various industrial sectors. As a result of these efforts, Pakistan’s energy intensity declined
from 5.1 megajoules (MJ) per dollar of GDP in 2007 to 4.4 MJ per dollar of GDP in 2015. Despite these
developments, the institutional framework for energy efficiency requires significant further development
to achieve higher levels of efficiency across the board.
Energy efficiency measures in Pakistan often require region-specific optimization, especially in building
structures (for example, buildings in southern parts require more cooling than heating). One of the key
challenges is the inadequate energy performance standards of the Building Energy Code of Pakistan. The
Code focuses mainly on efficiency in commercial buildings, which was last updated in 2011, and failed to
introduce modern efficiency standards. For instance, the measures that might have the largest impact
in terms of energy savings include building envelope insulation and efficient lighting. Some efforts to
improve consumption efficiency can, however, already be observed—for example, the distribution of free
compact fluorescent lamps to replace inefficient incandescent bulbs and promote more energy-efficient
solutions for artificial lighting.
While the transport sector plays a leading role in the country’s economic activity, it is also the biggest
contributor to air pollution, with the transport sector making up more than 40% of total emissions.
Importantly, Pakistan has been experiencing a rapid growth in the number of vehicles in use, as the
share of households owning a car increased from 6% to 9% in 2021. Recognizing challenges related to
imports of oil products, the government actively promotes the use of electric vehicles (EVs). For instance,
the recently approved National Electric Vehicle Policy introduced tax incentives for imports and
production, and also set ambitious EV targets for 2030 (30% of newly sold cars and trucks, and 50%
of buses and two- and three-wheelers, to be EVs). In terms of railway transport, Pakistan relies solely
on diesel locomotives as of 2021—the country used to have 16 electric locomotives in the early 2000s,
but the government closed the lines and stopped using them after frequent copper theft incidents at
different points along the tracks. Still, Pakistan has continued efforts to improve efficiency by replacing old
locomotives, leading to substantial energy savings of 3.5 million liters of diesel in 2019.
Riaz Haq said…

Regulatory Framework
Upon obtaining independence in 1947, Pakistan introduced several authorities to regulate the energy
market (Government of Pakistan 1958). The Water and Power Development Authority (WAPDA), which
served as a key player in the power sector, was unbundled in the 1990s to ensure the establishment
of a liberalized energy market and fair competition. As a consequence, both private operators and
state-owned enterprises became eligible to participate in the generation sector via a single-buyer
scheme. The Generation, Transmission and Distribution of Electric Power Act has introduced a newly
established independent authority: the National Electricity and Power Regulatory Authority (NEPRA),
which regulates power sector companies and sets tariffs and operational standards. One of the key laws
on energy efficiency, the National Energy Efficiency and Conservation Act, established a National Energy
Efficiency and Conservation Authority, with a mandate to set the strategic direction and national standards
for energy efficiency measures (The Gazette of Pakistan 2016).
Two authorities, the Private Power and Infrastructure Board (PPIB) and the Alternative Energy
Development Board (AEDB), were established as the main institutions, providing support to private
energy project developers as well as investors (Government of Pakistan, AEDB 2006; The Gazette o

Pakistan 2012). Each board has been established for specific projects: the PPIB was created and tasked to
approve conventional generation projects, while the AEDB was responsible for the approval of renewable
energy projects.
Fossil fuel production in Pakistan is regulated by a set of rules for oil, natural gas, and coal, which govern
the process of obtaining permission for the exploration and production of fossil fuels. The Oil and Gas
Regulatory Authority (OGRA) is a primary regulator of the market and licensing authority. The Authority
issues licenses for coal, oil, and natural gas through a competitive bidding process. Coal and petroleum
development and production licenses are given for 25 years, with the possibility of renewal for 5 years.
With increasing market transparency and private sector participation in energy projects leading to
growing investments, the country has introduced a general concept for a competitive electricity market.
These new rules, already published by NEPRA and coming into force in 2022, are regulating the transfer
from a single-buyer model to a competitive model in the wholesale segment (Khan 2020).
The natural gas market, in contrast, is still operating under the single-buyer scheme, and a competitive
market for natural gas supply is yet to be introduced, as state-owned utilities act as single monopolies.
Riaz Haq said…

Policy Framework
Several governmental decrees have set the policy framework for the energy sector. The main government
priorities in power generation were outlined in the Power Generation Policy and Transmission Line Policy
in 2015 (Government of Pakistan, PPIB 2015). The priorities for renewable energy were set in 2019 in
the Alternative and Renewable Energy Policy (Government of Pakistan 2019). The government has also
published a National Energy Conservation Policy to promote the use of domestically available resources.
The following priorities were outlined in the abovementioned policy documents:
(i) Development of renewable energy. With the established target for renewable energy
generation in the electricity mix (up to 30% of nonhydropower renewables and 30% of
hydropower by 2030), Pakistan aims to attract more investment into its renewables sector
(Qasim 2020). The government has already started facilitating investments in sustainable
energy sources, mainly by encouraging lower tariffs via introducing competitive bidding and
offering tax benefits as well as incentives for local production of renewable energy equipment,
such as solar panels and wind turbines.
(ii) Improvement in energy efficiency. Pakistan aims to increase the energy sector’s profitability
and sustainability by reducing energy losses as well as increasing energy efficiency. Specifically,
to realize the country’s considerable energy-saving potential of, on average, 25% in key sectors
(industry, residential, transport, and agriculture), the NEECA will be implementing a number of
policies: developing necessary regulations, introducing the national scheme for certified energy
auditors, establishing national Energy Efficiency awards, etc.
(iii) Introduction of a competitive energy market. As stated in the country’s Power Generation
Policy, Pakistan aims to provide sufficient power generation capacity and high-quality energy
services at the least cost. The country plans to achieve that by enhancing fair competition and
market liberalization. In 2020, NEPRA approved a detailed framework and implementation plan

for a competitive trading bilateral contract market, the main goal of which is to establish the
competitive wholesale electricity market with multiple sellers and buyers by 2022.
(iv) Promotion of domestic exploration and production of oil and natural gas resources. Through
optimized pricing and licensing mechanisms, Pakistan wants to further develop its domestic
production of fossil fuels to become more self-reliant and reduce its dependence on imports
(the share of imports constituted around 40% of the total primary supply in 2018).

Forecast Methodology
One of the objectives of this country study is to present a detailed overview and analysis of future energy
market trends in Pakistan. For this purpose, three scenarios were developed, considering the country’s
regulatory framework, technological development, and consumer preferences, among other factors
(Box 17). Supply and demand, technology, carbon emissions, and investment outlooks were derived
based on these scenarios.
Riaz Haq said…

Supply and Demand Outlook
Rapid economic development and population growth in Pakistan are the main drivers for growth in
primary demand, which is projected to increase from 111 million toe in 2018 to 125–154 million toe in
2030, depending on the scenario. Demand has fallen during the COVID-19 pandemic, with nearly
a 4% decrease from 2019 to 2020, although rapid recovery and growth in demand is expected. In the
Business-as-usual (BAU) scenario, primary energy demand grows significantly at an annual rate of
3.1%, as this scenario assumes low to moderate efficiency gains and limited reductions of T&D losses.
As for the Government Commitments scenario, annual growth is lower, at 1.4%, due to higher efficiency
gains and lower grid losses. The Green Growth scenario shows the lowest compound annual growth rate
among the three scenarios, with only 1.2% growth until 2030, assuming the greatest reduction of energy
intensity (Figure 68).
In terms of energy sources, natural gas remains the most important energy resource in all three scenarios,
driven by the country’s large fleet of gas vehicles, and by direct consumption in the residential and
industrial sectors.
Box 17: Scenarios for Pakistan’s Energy Sector
Business-as-usual scenario: Projected energy supply and demand, with current energy system and policies;
Government Commitments scenario: Projected energy supply and demand, considering individual priorities of
the Government of Pakistan; and
Green Growth scenario: Projected energy supply and demand, considering enhanced energy transition and
environmental policies.

Electricity generation in Pakistan is mainly dominated by fossil fuel sources, specifically natural gas and oil.
Alternative energy sources in Pakistan consist mainly of hydropower and nuclear, while the share of wind
and solar PV is much lower. The Government Commitments scenario assumes a large share of renewables
in the mix, followed by a decrease in fossil fuel-generated power. The BAU scenario assumes a slower
expansion of renewable resource generation, leading to prolonged reliance on fossil fuels in 2030. In both
Government Commitments and Green Growth scenarios, many natural gas- and oil-fired power plants
are decommissioned, and their capacities are replaced by renewable energy.
Nonetheless, a shift toward renewables is evident in all scenarios via the expansion of hydropower
capacities and the further expansion of wind- and solar-powered plants. The Green Growth scenario
assumes the most ambitious development of nonhydropower renewables, leading to a 20% share of
wind and a 10% share of solar PV in 2030. Under the Government Commitments scenario, the share of
wind reaches 16% and solar PV is 9%, compared to much slower developments under the BAU scenario,
where wind energy reaches 7% and solar PV only 2%. Furthermore, reflecting a broad push toward the
development of hydropower, the expansion of hydropower capacity is assumed in all scenarios, with the
highest being in the Green Growth scenario (43% of the total generation mix) (Figure 69).
Riaz Haq said…
Pakistan, Uzbekistan sign MoUs to increase bilateral trade to $1bn

Pakistan and Uzbekistan on Monday finalised agreements to expand investment and increase bilateral trade to $1 billion.

To this end, Commerce Minister Naveed Qamar and Uzbek Deputy Prime Minister Khodjave Jamshid Abdukhakimovich signed nine Memoranda of Understanding (MoUs).

Talking to the media on the occasion, Qamar said the two countries had decided to implement the Preferential Trade Agreement from February 1, 2023.

In a press release issued afterwards, the commerce ministry said the two countries also discussed the implementation of the Agreement between Uzbekistan and Pakistan on Transit Trade (AUPTT) and Uzbekistan would notify rules in this regard in February.

They also decided to undertake a joint visit to the Afghan capital in the last week of January to discuss problems faced by Pakistani and Uzbek transporters.

“Both sides agreed to formulate a joint strategy for transit trade through Afghanistan. Regional understanding on Transit and Trade Framework to be prepared including joint fund/mechanism for the upkeep of road infrastructure in Afghanistan.”

Uzbekistan requested an off-dock terminal at Karachi and Gwadar ports and was assured full facilitation, the statement added.

Besides this, the countries also decided to hold trade exhibitions and prepare a strategy to cooperate in e-commerce.

The Uzbek delegation is scheduled to meet a number of officials during its visit, including Prime Minister Shehbaz Sharif.

Uzbek President Shavkat Mirziyoyev had visited Pakistan earlier this year. During his visit, a number of agreements and MoUs were signed by the two sides. An MoU was signed between Uzbekistan’s Ministry of Tourism and Sport and Pakistan’s Ministry of Religious Affairs and Interfaith Harmony to promote religious tourism. Another MoU was inked between the two states in the field of environment and climate change.

Pakistan and Uzbekistan have been closely collaborating at regional and international fora especially at the United Nations, Organisation of Islamic Cooperation, Economic Coop­eration Organisation, and Shanghai Cooperation Organisation.

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