Theme / Concept of the Conference 2018:
Central Asian Regional Economic Integration and CPEC: Prospects, Challenges and the Way Forward (CAREIC-PCWF)
Unlocking the Potential of Regional Economic Cooperation and Integration in Central Asia, the AERC international conference (2018) aims at investigating the state of economic integration in Central Asia and identifies potential areas of CPEC for further strengthening sub regional linkages between Pakistan and Central Asia.
Central Asian Republics (CARs) of the Soviet Union were considered as a unit before their independence. The commonality imposed by geography remains and some of the shared problems require, to a greater or lesser extent, joint action. On the common problem the economics of transition and development after the collapse of the USSR, joint action has been minimal and counterproductive when it did happen notably in retaining a common currency. By the end of 1993 the CARs were clearly differentiated in terms of their progress in transition and in their development strategies. In the current challenging economic environment, goals such as diversification, efficiency in service delivery, and job creation are more critical than ever before – and the role of the private sector is critical in achieving these goals. The Doing Business 2017 report reflects some significant achievements of Central Asian governments, as well as ongoing challenges to improve the business environment and attract more private sector investment.”
The problems and challenges facing the Central Asian governments after independence fall into three categories. First pertains to development issues focusing on the gap between aspirations to emulate the East Asian newly industrializing economies (NIEs) and policymakers’ instincts to repeat the mistakes of import-substituting industrialization. Second relates to considering the more immediate problems of transition, and especially the crucial question of macroeconomic policy and its relationship to the decision of whether to adopt a national currency. Third deals with economic aspects of countries’ international relations.
CPEC is a grand leap forward by Pakistan’s trusted friend, China, to transform the economy of Pakistan. The package of US$ 46 billion has been increased to now over US$ 63 billion as new projects keep on getting included in this mega project ever since the package was drawn on 20 April 2015 when President Xi Jinping visited Pakistan.
CPEC is a part of the Belt and Road Initiative (BRI), which offers building of the other five corridors namely;
(1) China-Central Asia Corridor,
(2) Eurasian Land Bridge,
(3) China-Mongolia-Russia Corridor,
(4) Bangladesh-China-India-Myanmar (BCIM) Corridor, and the
(5) Maritime Silk Road. In all of these five corridors at least three or more countries are involved. The CPEC, on the other hand, is an exclusive corridor between Pakistan and China to connect Kashgar with Gwadar and there is no third party involved.
The CPEC is just not a road but a network of connectivity, industrialization, trade promotion, energy generation, and much more. Besides road, a railway track will be drawn between Havelian and Kashger. Work on 820 km optic fiber line is already underway to link Khunjrab with Rawalpindi, adding a digital component to CPEC, to be completed by June this year. Bilateral trade has enhanced to US$ 20 billion by now. Around 10,000 megawatt has been added to the national grid. Three industrial zones have carved out namely: Hattar, Faisalabad, and Dhabeji among nine identified so far. China invested over 1.1 billion in Pakistan’s FDI last year.
The main purpose of the package is to create a land link between western China and Pakistan by providing access to the southern port of Gwadar in Baluchistan province. This port was especially designed to cater the needs of China and Central Asian Republics. Western China and Central Asia are landlocked and since Central Asian Republics gained independence from the Soviet Union in 1991, we have been offering access to them to the Arabian Sea but nothing has been materialized so far. Gwadar and CPEC has the potential to streamline the long cherished dream between Pakistan and Central Asia. It is believed that Gwadar Port and its allied road infrastructure is a Suez Canal for China and Central Asia. There is a dire need to advertise the utility of Gwadar Port for Central Asian Republics in media outlets of Central Asian Republics highlighting the benefits of trade and connectivity.
Looking at the geo-strategic situation in the region, the important question arises that how the Central Asian Republics could be connected with Gwadar? It is traditionally thought that all roads from Pakistan into Central Asia go through Kabul or Wahkhan and as geo-political conditions in Afghanistan are not normal for the past several decades, we need to look deeply in to, how this opportunity of trade and connectivity would be enjoyed?
Since 1991, Pakistan-Central Asian trade has not been substantially increased. Gwadar port could become a hub-port for the Central Asian Republics. These Republics could carry out their South Asia and the Gulf trade and transit-trade through Pakistan. Unfortunately, in the past quarter century, this trade is dismal and it has not gone beyond US$ 76 million in spite of lofty announcements and innumerable pledges committed by top leadership on both sides. CPEC offers novel solution to address Pakistan-Central Asian trading woes. With abundance of natural resources such as oil, gas, gold, and other metals, Central Asian Republics have great potentials to investment in CPEC-related projects and also to investment in the new industrial zones. CPEC-related investment is expected to go beyond US$ 150 billion for all projects. Out of 46 industrial zones, 9 zones have been identified and work on three industrial zones is going to start soon. Almost all Central Asian Republics have shown interest in joining the CPEC. Looking at vast trade and transit-trade and investment opportunities and potentials, Central Asian Republics should take the benefits of the CPEC.
The CAREC Institute initiative is a milestone in promoting economic integration and centrality of countries in Central Asia along with CPEC. Central Asian countries with Pakistan and Afghanistan need an ambitious plan for economic integration beyond their borders to achieve its economic development aspirations. All countries need to designs their post-2020 agenda with a view to strengthening its role as a hub of Asian dynamism, its members need to adopt an appropriate policy mix including deep domestic structural reforms and bold actions to further deepen regional integration—transforming the Central Asia into a truly borderless economic community.
Sustained economic development and income inequality remains a challenge in Central Asian countries including Pakistan and Afghanistan despite the reasonable economic expansion in Central Asia and Pakistan in previous decades, which lifted millions out of poverty. Financial inclusion is often considered as a critical element that makes growth inclusive as access to finance that can enable economic agents to make longer-term consumption and investment decisions, participate in productive activities and cope with unexpected short-term shocks. Understanding the link between financial inclusion, poverty and income inequality at the country level will help policymakers design and implement programs that will broaden access to financial services, leading to reduction of poverty incidence and income equality.
Pakistan while moving ahead under the umbrella of CPEC on the road to prosperity must keep Afghanistan and Central Asia on priority agenda that should urgently pursue broad-based regional economic cooperation which could enable far more effective responses to the region’s developmental challenges.
The AERC international conference on,’ Central Asian Regional Economic Integration and CPEC: Prospects, Challenges and the Way Forward, (CAREIC-PCWF)’, from December 18-20, 2018, will explore and evaluate the scope, broad principles, and characteristics of Central Asian countries economic relationships and cooperation at the regional level. It will address the broad issue of whether Central Asian efforts for regional cooperation and integration have been compatible with similar arrangements elsewhere or with an open multilateral trading system at the global level. The conference will also focus on the changing dynamics of regional integration and its future prospects and will explore the possibilities and implications of Central Asian integration for Pakistan through CPEC, Afghanistan and the rest of the world.
- Regional Integration and Infrastructure
- Economic Integration and Communication Technology
- Trade Facilitation and CPEC
- Environment and Disaster Risk Management
- Agriculture and Food Security
- Financial Development
- Gender and Human Development
- Governance and CPEC
- Energy and Industrialization
- Water, Sanitation and Hygiene
- Population, Migration and Urbanization
- Socioeconomic Development