South Asian states have failed to combine, so as to put up an effective unified bloc and make the region count in global trade. The failure of effort has put in the reverse gear a region that holds the largest population group in the planet. The failure to combine in politico-diplomatic domain has a negative economic impact. Unbridled inter-state disputes remain the reason to make SAARC the most ineffective regional grouping, compared to other regional combines, such as EU and ASEAN. Far from combining, alternate trade routes are emerging with diverse geo-strategic objectives that could heighten the contention that South Asian states are already face to face with.
South Asia has a huge Central Asian landmass in its backyard, across high Himalayan ranges–the Hindu Kush, Pamirs and Karakorum. The landmass is landlocked. Apart from South Asia, it borders China and Russia. Part of China—north-western is Central Asian, mainly Xingjiang province. Chinese sea ports are far removed from this region, while as Russia has cold water sea ports. Hence, access to sea ports is limited for maritime trade. China in order to gain easier access to warm water sea ports has hit upon—China Pakistan Economic Corridor (CPEC). CPEC links Chinese northwest to Gwadar sea port in Balochistan. It is the flagship project of Belt Road Initiative (BRI) new denomination of One Belt One Road (OBOR) an ambitious Chinese project linking more or less 65 countries by road and rail, energy pipeline and communication network. China has backed this mega-project initially with huge investment of about 1.4 trillion dollars out of her foreign exchange reserve. Nearly 60 billion are already in pipeline for CPEC.
BRI however has not evoked all round acclaim. India has deep reservations based on lack of transparency. There are question on lacking consultative process. India seems to have question on investment and returns as well, which it is felt could run into debt traps. Hambantota port in Sri Lanka is quoted as an example, where the country is faltering in returns. In order to compensate, it is reportedly leasing land to Chinese industry for setting up exclusive zones. Similar zones are planned in Pakistan. Apart from issues related to balance of payments, there are questions on exclusiveness of such zones impinging on sovereignty, though such issues have not cropped up between Pakistan and China so far. Hambantota and Gwadar may not be weighed in the same scale, as Gwadar weighs high in Chinese geo-strategic stake, virtually a life-line. There are security concerns too, expressed mostly by Indian geo-strategists. The involvement of Chinese companies in the development of Hambantota port have provoked claims by some analysts that it is part of Chinese 'String of Pearls' strategy, meant to work as strategic choke. Issues vis-a-vis spheres of influence crop up.
CPEC has had a smooth run so far, apart from some minor issues, such as appropriation of funds between various states of Pakistan, besides India voicing claim to Gilgit-Baltistan, through which CPEC passes. Gwadar is changing hue from being a locality of fishermen to a sprawling port city. Locals however have some apprehensions on how they would fit into the cosmopolitan hue that the place is bound to develop. It is understood that the sea routes leading from Gwadar port onto Arabian Sea and Gulf waters would need to be secured. Chinese navy along with Pakistan naval vessels is supposed to provide security. Such a naval combine close to Indian waters is raising concerns in India.
Chahbahar in barely 100 km's from Gwadar. Approaching Gulf of Oman, the Iranian port which India is seeking to develop forms a part of strategy to counterbalance Gwadar. Iran however expressing interest in joining CPEC doesn't see Chahbahar as a rival to Gwadar. India is investing as much as 500 million dollars to make the port operational for overland trade to Afghanistan and Central Asia. India's land access to Afghanistan and Central Asia is via Pakistan. Pakistan however has issues of trade and transit with India, issues that have remained unresolved, because of tense relations between two South Asian countries. Chahbahar is thus taken to be a pivot of India's hopes to open a corridor to Central Asia and Afghanistan bypassing arch-rival Pakistan. It is however not taking off, as Gwadar did. The reason related is that western manufacturers are shying away from supplying equipment for an Iranian port, out of fear that US may re-impose sanctions on Tehran.
As per June, 12, 2017 Reuter report, state-owned Indian firm developing Chahbahar is yet to award a single tender for supplying equipment such as cranes and forklifts. Reputed international firms– Swiss engineering group Liebherr and Finland's Konecranes and Cargotec have told India Ports Global Pvt Ltd, which is developing the deep water port, that they were unable to take part in the bids as their banks were not ready to facilitate transactions involving Iran due the uncertainty over US policy. Indian Ambassador to Teheran—Saurabh Kumar is however optimistic. In an emailed message to Reuter, he relates, "Tenders are re-floated for a variety of reasons including technical specifications not being met, etc. Banking channels, in recent months, have in fact somewhat eased."
Alternate routes may no more be needed, were Indo-Pak relations put on a mend, easing trade and transit. However, it involves resolution of outstanding issues, mainly 'K' dispute, which could be a key to resolving Afghan imbroglio, as well. Not for nothing do many analysts concur that route to Kabul lies through Kashmir.
Yaar Zinda, Sohbat Baqi [Reunion is subordinate to survival]
(Author is doctor in medicine, a social activist, and a senior columnist)