All of a sudden, the world powers seem to discover the salience of South Asia and Central Asia as corona-battered world economic system tries to gather the broken pieces, fast and furious.
The United States and five Central Asian countries pledged to “build economic and trade ties that would connect Central Asia to markets in South Asia and Europe.” Their joint statement in Washington in mid-July called for peaceful resolution of the Afghan situation for greater economic integration of the South and Central Asian regions.
Not to be left behind, Iran and China drafted a joint plan to integrate the two regions by creating “a sweeping economic and security partnership that would clear the way for billions of dollars of Chinese investments in Iran.” The Chinese investment in Iran would total $400 billion over 25 years and “undercut the Trump administration’s efforts to isolate the Iranian government” and “would vastly expand” China’s presence in the region. Both countries would jointly build a network of telecommunications, ports, railways and roads to enhance China’s access to markets in the Middle East and Europe.
Surprisingly, the United States and China see huge economic prospects in the South and Central Asian regions at the same time and both seek a controlling share in the upcoming trade routes.
In a trilateral forum in late May, the United States, Afghanistan, and Uzbekistan had reviewed projects to link South and Central Asia for regional prosperity. The joint statement unveiled plans to build railway links between Central Asia and Pakistan and a gas pipeline to India via Pakistan.
Pakistan may have to choose from the two parallel trade routes even though China would definitely expect it to join its economic pact with Iran while the Americans would like Islamabad stay connected to South and Central Asia.
Washington has created a group called C5+1 including the United States, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. Another working group will develop the transit potential of Afghanistan, including funding from international financial institutions of large projects.
The group wants to “build economic resilience and further strengthen security and stability” in Central Asia and the wider region. The US Development Finance Corporation, the US Export-Import Bank, and the Department of Commerce’s International Trade Administration are all lined up to provide financial assistance for projects in the region.
The C5+1 Security Working Group will also promote “secure and effective borders” for free flow of goods, prevent the trafficking of persons and illicit goods, nuclear and radiological safety and promote regional cooperation on border security.
It will counter violent extremism, combat online recruitment by terrorist networks, and hold joint and regional counter-terrorism training. But America’s interest in the region is late at least by a decade because China has already made huge investments and bought out some South Asian countries.
Pakistan boasts of its strategic geopolitical location but sold itself to China dirt-cheap. Despite availability of two trade routes, Beijing won’t allow Islamabad the luxury of that choice. The US suffers from trust deficit, its strategy whimsical and as regional outsider could depart anytime leaving behind the planned trade route and regional trade.
Pakistan is needed for connecting India to Central Asia. It must avail this opportunity to get out of the Chinese debt trap to avoid getting auctioned in a decade. Chinese money is not free like the Americans’. Pakistan could be forced to choose China-Iran-Turkey-Russia channel.
The China-Iran deal seems a huge regional game changer. It will give China better and safer western access via Iran and the Persian Gulf, and render the CPEC redundant and riskier due to treacherous Karakorum highway through Gilgit-Baltistan.
China has upped its aggression with India as it no more needs India’s goodwill on the CPEC anymore. CPEC’s value has diminished forcing Pakistan a rethink on its CPEC commitment.
Joining the US sponsored regional trade group could provide Pakistan the much-needed strategic balance.
