China-Pakistan Economic Corridor and Its Impact on Regionalisation in South Asia

Abstract

The China-Pakistan Economic Corridor (CPEC), a multi-billion dollar infrastructure investment project, is not only heralded as a game changer for Pakistan’s economy but also for regional cooperation (Daily Capital, CPEC project a game changer for the region: Nawaz, 2015; Fazil, Pakistan: what stands in CPEC’s way? 2016; Khan, Is China-Pakistan Economic Corridor really a game changer? Pakistan Today, 2015b; Sahgal, China – Pakistan economic corridor: changing dynamics of Southern Asia – analysis. Eurasiareview, 2015). As a crucial part of the major development initiative led by China, known as ‘One Belt, One Road’ (OBOR), to connect Asia with Europe, the Middle East and Africa, the CPEC is widely linked to hopes, interests, as well as regional and global geopolitics. Therefore, this chapter seeks to shed light on interests and challenges, and potential impact of the project on regional development. In this context, the chapter argues that the potential impact on regionalisation depends entirely on its ability to increase regional connectivity as much as possible. Therefore, CPEC must be integrated into the transport-, energy- and trade infrastructure regional networks beyond the Pakistan-China nexus. It is essential that Pakistan includes neighbouring states, and opens up the CPEC to Iran, Afghanistan, and India. Only then can the project have significant impact on regional connectivity and will it be able to function as a game changer for regional cooperation. In order to facilitate such meaningful input, a normalisation of Pakistan-India ties and a constructive Pakistan-Iran dialogue are essential preconditions. Furthermore, a fundamental reassessment of Pakistan’s predominantly-security based approach towards Afghanistan and India is needed, it must develop a foreign policy free from ideological parameters which allows rational behaviour in its bilateral relations. More concretely, Pakistan needs a greater emphasis on trade and broader economic cooperation rather than putting the focus on security.