Is America against the CPEC?

The China Pakistan Economic Corridor (CPEC) being part of One-Belt-One- Road (OBOR) initiative, will help to materialise China’s ambitions and make it an economic superpower, it has been a unipolar world for quite a while so it is important to know whether the U.S. is against these projects, especially since Pakistan has always been a U.S. ally.

The general perception is that Pakistan’s relations with the U.S. will deteriorate due to the CPEC, U.S. investors have pulled out $71.9 million in the last 11 months whereas U.S. investment amounted to $197.1 million in the previous year, this is just one of the indicators of its displeasure, in the Obama years Pakistan-U.S. relations lacked enthusiasm. Some U.S. foreign policy experts, like the Wilson Center have been predicting an imminent ‘downgrade’ in U.S, relations with Pakistan, and an ‘upgrade’ in relations with India.

As the CPEC’s Gwadar port is one of China’s String of Pearls, this term denotes the naval bases that it dominates, so it makes sense if the U.S. has been unobtrusively helping India stir up proxy terror attacks in Balochistan, the Pakistani province where Gwadar is located and the CPEC has to pass through. The United States put Jamaat-ul-Ahrar on the terror list in July 2016, it was a faction of the Pakistani Taliban which claimed responsibility for a failed car bombing in Manhattan, this move made them scatter out of their hideouts in tribal areas towards Balochistan, which is intrinsic to CPEC.

The U.S. also used a drone strike to target Mullah Mansour of the Afghan Taliban while visiting Balochistan, this is believed to have been a strategy to sabotage the CPEC, by contributing to the degradation of security in the province. Daniel Markey states that the United States is not “opposed to the increased Chinese presence in Pakistan, especially on the commercial and economic front.” In fact, “US policymakers would very much like China to help stabilize and grow Pakistan’s economy because they see that economic stability as a way to reduce security threats. By extension, the United States does not perceive China’s role in Pakistani infrastructure development as inherently threatening either.”

The U.S has never openly opposed the CPEC, but traditionally it has always tried to contain China in the South China Sea, its allies in this endeavor have been India, Japan, Indonesia and Singapore. In September 2016, when asked whether the US and India were working together against the CPEC, the US State Department Deputy Spokesperson Mark Toner replied, “I would dismiss it outright. We have a strong bilateral relationship with Pakistan, but one that is premised on counter-terrorism cooperation and – as part of that conversation, or that dialogue and that cooperation that we have on counter-terrorism issues, we made it very clear that Pakistan can’t pick and choose which terrorist groups it goes after and it has to go after those groups that seek to do harm to its neighbours and may seek refuge on Pakistani soil.”

Being part of American China containment policy, India has been keenly watching the progress of CPEC, it is the third major player in this Geo-strategic region, it views the Chinese economic venture as a mega-scale naval mobilization program that threatens its security and puts global sea lanes at risk. The fact that the CPEC gives China access to the Indian Ocean is India’s biggest fear, it feels Pakistan and China have become a joint threat and their aim is to encircle and contain India.

Recently, in its unreasonable quest to subvert the CPEC, India even abandoned its previous stance of ‘non-alignment’ and adopted a vehemently pro-American direction. It obviously felt that the United States would also be interested in sabotaging the economic project, to gain the trust of the Americans, it signed the Logistics Support Agreement which will let the latter use all its airbases and military facilities. This obvious shifting of camps was not well received by its long term ally Russia, it almost immediately consolidated relations with Pakistan and extended support for the China Pakistan Economic Corridor to enhance the economic stability of the entire region. Russian elite forces arrived in Pakistan for military drills in Gilgit-Baltistan and FATA regions and a counter-terrorism deal is also in the offing. The entire region has become consolidated as a whole due to CPEC today, only India is standing alone with its major ally in a faraway continent.

China views its relationship with allies on a geo-strategic, and geo-economics basis, the purpose of the CPEC is to spur foreign investment and accelerate trade, its mega-investment in Pakistan has grabbed the world’s attention and many foreign investors are interested. “Pakistan has turned the tide,” said Mattias Martinsson, the Stockholm-based chief investment officer at Tundra Fonder AB, which holds about $160 million in Pakistani stocks. “The CPEC agreement was probably the trigger for many investors to actively start looking. We all know China does not take short term decisions.” New power plants financed by China will help strengthen industries, even Renault and Nissan have announced they will start production. Pakistan has the world’s sixth largest population and international consumer companies are preparing to invest as well. China has also been actively pursuing its investments in infrastructure, power, aviation and tourism sectors of Pakistan.

China increased its investment even more at this point to cover the loss as other investors pulled out, it offset the decrease in investments from the rest of the world. The CPEC has global trade implications, Pakistan must secure its strategic and economic interests and learn how to balance the two major powers, U.S. and China, without upsetting the apple cart. In this scenario, Pakistan emerges as a major player that can balance superpower rivalries and promote trade co-operation. In reality, the United States and China are co-dependent on each other as far as business is concerned.

Christine Lagarde from the IMF recently said, “ This is an important time—“a moment of opportunity”—for Pakistan, a country undergoing an economic transformation that can place it well among the ranks of emerging market economies.” Since a couple of years, there has been very negative coverage of the CPEC in local media, as well as Indian and Western media, calling it a non-starter and trying to pick flaws in the project. Disproving all the propaganda, Gwadar port has now been formally inaugurated by the Pakistani PM Nawaz Sharif, the first convoy of goods made its way across the 3000 km land route to Gwadar port from the Chinese border and 300 containers were sent by ship to Africa. The CPEC is now officially open for business, and by the end of this year and early next year, the first phase of infrastructure projects will be complete.

As another perspective, in the last 13 years, the U.S. gave Pakistan about $10.5 billion in economic assistance, $7.6 billion in security-related aid, and $13 billion in counter-terrorism support, even recently the U.S. Senate passed $1.1 billion under the Security Enhancement Act on account of mutual strategic partnership, but somehow it never took interest in building dams, power plants, roads, bridges or ports. The United States could plan on a similar pattern to that of China and help put Pakistan on the road to financial security and political stability, it could direct some civilian assistance into CPEC-aligned projects such as improving Pakistan’s national power grid.

Americans have been very busy with elections recently, the U.S. foreign policy received far less attention during the electioneering cycle than ever before. Trump’s unexpected win has brought about a spate of protests by Hillary fans even though two terms of Trump were predicted a year ago, he happens to represent the American blue collar, working class that felt ignored and beaten down for decades and had not been voting since several elections now, Clinton had nothing substantial to offer them. U.S. foreign policy mostly stays the same but Trump is all for ending the wars and concentrating on America for a change, he might concentrate more on the economy than global wars that have deprived America, it is hoped being a businessman he might favour joining CPEC related projects in the future.