Navigating Geopolitical Complexities: Pakistan’s Role in Central Asian Trade

By Sher Jan Khan

On a strong geopolitical height, Pakistan’s trade routes weave a tapestry of economic cooperation with Central Asian Republics (CARs) through China. Major General Farrukh Shahzad Rao, Director General of the National Logistic Cell (NLC), announced plans to offer priority land access to CARs through China to encourage the development of the Pakistan Economic Corridor (CPEC), a flagship project with far-reaching implications for both China and Pakistan and the region in a broader context.

The NLC’s initiatives include establishing trade routes from Xinjiang to Karachi and collaborating with Chinese exporting companies to develop trade beyond the borders of China to the Central Asian Republics (CARs). The NLC actively promotes regional trade, including cargo transport between Kashghar and Kabul, Uzbekistan, Tajikistan, and Turkey, and even plans for Moscow soon.

This holistic strategy of exploring highways and regional linkages is consistent with the more significant aim of the Belt and Road Initiative. These projects were displayed at the China International Fair for Trade in Services 2023 (CIFTIS-2023), which not only supports but also assists Pakistani exports, particularly in the domains of information technology, e-commerce, banking, and logistics, to improve regional connectivity, which is a vital step towards economic development and cooperation in the region.

The issue at hand fundamentally begins with the geopolitical intricacy of Central Asia (CA), which stretches generally from the Caspian Sea in the west to China in the east, Afghanistan in the south and Russia in the north. Central Asia, often referred to as the “heartland” of Asia, with billions of barrels of oil and an estimated 4.82 to 13.11 trillion cubic meters of natural gas, has become a hotspot for global powers seeking energy security and regional influence.

Since the dissolution of the Soviet Union, China’s trade activity in the region has expanded 200 times, with trade volume expected to reach $80.6 billion by 2023. The China-Pakistan Economic Corridor (CPEC), which aspires to connect Pakistan’s Gwadar port with China and the Central Asian States, is a significant component of China’s Belt and Road initiative. Simultaneously, the United States has elevated its concept of the new Silk Road. Russia, cautious about the United States, has backed the Iran-Pakistan-India Pipeline (IPI) and offered to finance related projects, prioritizing its delivery.

The dynamics surrounding this problem arise from key global players’ strategic ambitions in acquiring energy resources and growing their influence in the Central Asian region. Major powers like the United States, China, and Russia compete to access Central Asia’s massive energy reserves. For the United States, the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline offers a way to increase economic trust in regional sovereignty while reducing conflict and increasing cooperation. Conversely, Russia wants the Iran-Pakistan-India Pipeline (IPI) and has actively supported its development.

It is causing substantial concern in Pakistan’s regional trade and economic relations, particularly with the reopening of essential borders with Afghanistan. As China expands its Belt and Road Initiative through the China-Pakistan Economic Corridor (CPEC), it seeks to strengthen trade links with Afghanistan, for which Pakistan must consider its policy options. The opening of these border routes provides both advantages and disadvantages for Pakistan. On the positive side, it will improve bilateral and logistics trade, benefiting Pakistan’s economy and strengthening connections with China, as well as contributing to regional stability by assisting Afghanistan’s economic growth in the world market.

However, Pakistan must also deal with potential problems. Considering the region’s continuous security dilemma, border security and intelligence are paramount. Pakistan must strengthen its security measures to combat illegal activities and promote fair trade. Additionally, infrastructure at these crossings is critical for effective trade. Investing in intelligence agencies, transportation networks, and adequate infrastructure will be necessary. Furthermore, diplomatic efforts should be made to resolve any disagreements or grievances due to more significant trade to keep good relations with Afghanistan. Pakistani policymakers must consider these elements when navigating the hurdles of this undertaking and establishing a comprehensive strategy to maximize the benefits of open borders with Afghanistan.

In conclusion, the reopening of Pakistan’s main borders with Afghanistan, pushed by China’s ambition to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan, poses both opportunities and challenges for Pakistan. Economic growth, regional stability, and stronger connections with China and the CARs are all possibilities. However, to ultimately reap these benefits, Pakistan must carefully manage security concerns, invest in infrastructure, and engage in diplomatic relations with Afghanistan. Developing confidence in firms involved in trade, shipping, and warehousing in both countries is critical to making legal transaction-related services simple to implement.

The success of these endeavours is vital for Pakistan’s economy and corresponds with the goals of China’s Comprehensive Belt and Road Initiative. It strengthens Pakistan’s standing as a regional trading hub and contributes significantly to China’s diplomatic objectives. The international world is keeping a careful eye on these developments since they have repercussions beyond bilateral ties, influencing regional stability and global trade growth. In this setting, Pakistan’s strategic decisions will shape its economic future and the regional and worldwide landscape in the following years. As a result, Pakistan must take a balanced and forward-thinking approach to maximize opportunities while reducing potential hazards.

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