Pakistan, Central Asia in talks to set up big, new economic zone

Nawaz Sharif has turned his full attention for close relations with Central Asian states since the five of them broke away from Russia 23 years ago.

Fast track negotiations between Central Asian and Pakistani leaderships are slated to turn their countries into a big, new economic zone. Their desire and vision to make the economic zone functional are reflected by the ongoing summit level negotiations between Uzbekistan, Tajkistan, Belarus and Pakistan. Contacts with other Central Asian countries are on the anvil at ministerial, diplomatic and expert level, too. Pakistan’s Prime Minister Nawaz Sharif has turned his full attention for close relations with Central Asian states since the five of them broke away from Russia 23 years ago. High-level talks have been held between Nawaz Sharif and Tajik President Imomali Rahmon, Belarus Prime Minister Andrei Kobyakov and Uzbek Presidnt Islam Krimov.

Islamabad’s talks with Central Asia among other sectors, especially covered energy, including natural gas, electricity, petroleum, investment in a variety of heavy industries, trade, avoidance of double taxation, lowering and abolition of customs duties on goods and banking.

The zone-making process will also link-up with China Pakistan Economic Corridor (CPEC), which begins from the southern Pakistani port of Gwadar connecting the Arabian Sea in the south with China. To the north it will connect with the Central Asian countries making the corridor’s western flank and ultimately connecting all the way with to EU. It is also described as a revival of the centuries old business region called the Silk Road in which the Central Asian countries (CASA) had formed the key artery.

The amount of this estimated foreign investment, particularly from China, has been conveyed to the Central Asian countries by Sharif during bilateral contacts between the prospective members of the zone.

“China and Pakistan already are negotiating upping the CPEC funding from the original $46 billion by around $12 billion,” Sharif said.

Chinese President XI is fully on board regarding the evolving and rising amount of funding for CPEC projects, likely investment in the linked-up CASA, and its push forward to EU.

Lets have a look at what was decided to expand business, trade, investment, and communications with China, Pakistan, and the five CASA nations have stressed in their negations at Islamabad, Astana, Tashkent, Dushanbe and Beijing.

Tajik President Emomali Rehman, during his visit to Islamabad this week agreed to start several projects in sectors like communications, expansion of trade and bilateral investment. He assured Sharif that the Tajik-Afghan-Pakistan electricity grid called CASA-1,000 will be started in December and completed on schedule to supply 1,300 megawatts of electricity. Rehman and Shrif agreed to build Gwadar-Peshawar-Kabul-Kunduz-Dushanbe route, Khunjrab-Kalasu-Murghab route and Chitral-Eshkaaehm – Dushanbe route to connect the two countries. In order to implement this programme the two countries signed 18 agreements in Islamabad.

During the visit of Belarus Prime Minister Kobyakov focused on investment and trade. Belarus made it known that it is looking for investment in Pakistan to establish “assembly plants for several products such as tractors, trucks, dumpers, complete range of agricultural technology and machinery and several types of engines. Belarus can also provide complete range of Euro 11,111 and IV compliant products. Discussions also centered on building of oil, transport, mining and tyre industries, and setting up oil extracting equipment plants.

Uzbekistan and Pakistan signed four documents “to strengthen the bilateral cooperation in economy, trade and foreign affairs at Tashkent. Ganiey Elyor Majidovich, Uzbek Minister of Foreign Economic Relations, Investment and Trade, and Tariq Fatemi, Special Assistant on Foreign Affairs to Prime Minister Sharif signed the agreement. The two countries also signed an agreement “for establishing an inter-government arrangement to avoid double taxation.” Yet another agreement was signed to “enhance bilateral trade.”

All this shows that the new CASA-Pakistan, along with the start of construction of CPEC projects are on the go.