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Home »Supplements » CPEC, Eurasian Economic Union (EEU) and ‘One Belt, One Road’ (OBOR): Pak-Russia relations in perspective
What is China Pakistan Economic Corridor (CPEC)?

It is now more $60 billion project funded by the Chinese government. The CPEC involves a network of roads and railway lines and other developments. The project intends on connecting Xinjiang in China's West to the warm water port of Gawadar in Pakistan. The road and railway networks pass through some of the world's highest, as well as most restive, regions.

The CPEC is part of 'One Road One Belt' initiative of the Chinese government. At its core, the OROB envisions to connect China and other East Asian countries to economies of Europe and Africa through a network of road, railway and maritime routes. Beijing views it as a way to access overseas markets for Chinese manufactured products.

It presents a golden opportunity for Southern Russia and Central Asia to develop. These regions have remained thousands of miles away from Civilization to this date, simply because they are landlocked.

There is lots of potential for development and settlement. If China and Pakistan build a high- speed road and rail corridor linking the sea to China via Central Asia, 'dis-tributaries' of this corridor can extend into Central Asia via the Pamir Knot.

Apart from the fact that Pakistan has approved a Russian request for using the Gawadar Port, for its exports, media reports were swirling that Russia planned to merge the Moscow-led Eurasian Economic Union (EAEU) with the CPEC. The two countries are closely cooperating in different areas but there is a need to enhance the volume of bilateral trade.

As for Russia-Pakistan relations and Russia's role in the CPEC, China is deemed as a stakeholder in the affairs and has certain influences. But China will not intervene in Russia-Pakistan relations. In addition, Pakistan follows the balance of power theory and conducts open diplomacy in a bid to maximize its national interests, which is beyond reproach.

Given the prevailing globalization and regional integration, it is not possible, realistic or necessary, for any country to monopolize one country's economic affairs.

Russia's presence in the CPEC would help prevent the international community, including India, from paying excessive attention to China and remove the unnecessary worries over the so-called China threat. The cooperation between BRICS countries like China, Russia and India is the key to the success of OBOR development.

Russia's involvement in the CPEC is to serve its own interests in economy and geopolitics, which may complicate regional affairs. But if all parties stick to the market rules, China's interests wouldn't be harmed given that China has gained first-mover advantage, as well as capital and geographic advantages. As was said above, Russia's participation is not a bad thing and there is no need to exaggerate neither its competition nor negativity. On the contrary, if Russia joins the project, it will be a stakeholder which shares economic risk, especially security risk, and has the same or similar goals. It's a good thing.

What's more, Russia as China's strategic partner and a member of BRICS and the Shanghai Cooperation Organization (SCO) has been advancing the Sino-Russian "the Belt and the Union" (the Silk Road Economic Belt and the EAEU) and a broader Eurasian partnership. Russia's participation in the CPEC, including the use of the Gawadar Port, could give a boost to Sino-Russian cooperation and be a demonstration project of OBOR that will enhance future multinational cooperation.

One Belt One Road (OBOR)

In addition to OBOR, Russia strongly supports China-Pakistan Economic Corridor project as it is crucial for Pakistan's economy and regional connectivity. Moscow has not just declared strong support for the China-funded project but also announced its intention to link its own Eurasian Economic Union project with CPEC. This is the reason why Russia and other central Asian countries have been taking interest in this project as this project will give direct access to Russia for Middle East

Russia is part of China's One Belt One Road (OBOR) initiative. The OBOR is a combination of two routes; the New Silk Road Economic Belt will run westward overland through Central Asia and onward to Europe. The second route, the 21st Century Maritime Silk Road (MSR), will run south and westward through sea to Europe, with stops in South East Asia, South Asia and Africa. Under the auspices of OBOR, at least six arteries are being developed. China-Pakistan Economic Corridor (CPEC) is just one of the tributaries of the OBOR vision and it is the most important one. It is important to remember that Pakistan sits at the crossroads of east to west and north to south trade corridors, including the CPEC. The CPEC increases the importance of Gwadar port for Russia. Pakistan can offer Russia the western corridor so that it can draw benefits from use of Gwadar port. Russia could receive access to the Indian Ocean through the Arabian Sea and the ports of Gwadar. Connecting Russia and CARs to Gwadar Port should add to Pakistan's economic growth and development.

Pakistan can be a competitive source of agricultural and textile goods to Russia. Russia has banned agriculture imports specially food from Europe. Pakistan could position itself nicely in a new, and large, trade frontier. Pakistan can export agriculture products to Russia by utilizing this void of $16 billion food imports of Russia. Relevant ministries and the Trade Development Authority of Pakistan (TDAP) are preparing working papers for increased agri-exports to Russia but this policy needs quick finalization and implementation.

Russian achievements in sports are noteworthy. Games like boxing, basketball and soccer where Russia has dominated the world arena, are also played in Pakistan, though we have not performed as per our potential. Russian coaches can be invited and friendly fixtures can be arranged between the countries. This will provide the opportunity for Pakistani teams to nurture and groom, and earn a higher position in the world.

The Way Forward:

Pakistan should aim at making Russia a long-term trading partner and supplier of military hardware. Pakistan should provide incentives to Russia to attract its investment in energy producing and import projects, steel mill, infrastructure development and agriculture sector including water management.

Pak-Russia trade was $865 million in 2013. Presently, current data is $570 million. Pakistan needs to post a Commercial Counselor in the Embassy of Pakistan, Moscow. Both countries should encourage private entrepreneurs to boost bilateral trade, commensurate with existing potential.

The agreements between Pakistan and Russia have been signed in the past too, but this time Pakistan needs to attain something concrete. The recent agreements need quick implementation.

Conclusion

The current geo-political and regional environment appears to be quite favorable to the advancement of Pak-Russia relations. The way for the implementation of new projects between Russia and Pakistan is open. From the point of view of the needs of Pakistan's economy, cooperation with Russia would be most productive in infrastructure, energy production and in the sectors of communication, metallurgy and irrigation etc.

Copyright Business Recorder, 2017


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