Regional Connectivity:
Connecting Gwadar Port to Central Asia
Embassy of Pakistan, Kabul
September 4, 2015
Sequence of Presentation
• The Idea: Regional Connectivity
• Pakistan’s Vision for Regional
Connectivity
• New Global Imperatives
• Way Forward
• Challenges
• Conclusion
The Idea
• Pakistan and Afghanistan are located at the
confluence of three vital regions of South,
Central and West Asia.
• Pakistan provides the shortest access to the sea
for all landlocked countries of Central Asia
besides Western China.
• We can transform the region into an economic
hub giving boost to both intra and inter-regional
economic activity
• Potential to become a bridge and a roundabout
for Central and South Asia.
Pakistan’s Vision for Regional Connectivity
• “Peace for Development”
• Building a “peaceful neighborhood”
• Heart of Asia
• Regional Economic Integration with emphasis
on energy and infrastructure projects
• Economic center of gravity shifting to Asia
Pakistan’s Vision for Regional Connectivity
• Constructive engagement with Afghanistan
• Strategic Partnership with China
• Qualitative improvement in relations with Iran
• Renewed outreach to Central Asia
• Traditional ties with Gulf countries reinvigorated
• Peaceful Neighborhood with India
New Global Imperatives
• Pakistan’s adjoining regions (SAARC & ECO) least
integrated
• Vast economic potential, possible through regional
cooperation, remains unrealized
• Intra Regional trade
– ECO: 9.8%
– SAARC: 5%
– As compared to ASEAN: 24.4% and EU: 55%
Current Endeavours
• The visits of Prime Minister Nawaz Sharif to Central Asian
Republics and Afghanistan show the recalibrated vision of the
government to build regional linkages for shared economic
prosperity.
• Pakistan will be hosting next Heart of Asia Ministerial
Conference in 2015 and SAARC and ECO Summits in 2016.
• Opportune time to foster better Pakistan-Afghanistan ties
• Possibilities to change the narrative and inspire stronger
commitment from CARs
Regional Connectivity
• The recent decision by the Prime Minister to accede to the TIR
Convention represents a major breakthrough in spurring
connectivity and enhanced trade in the region
• Engage China for linking CPEC with Kyrgyzstan and Tajikistan as
well as Corridor 5&6 of CAREC (Central Asia Regional Economic
Cooperation) connecting Pakistan at Torkham
– It will establish connectivity between Pakistan, Central Asia and
beyond
– Kashgar-Bishkek 700 km highway exists
– Kashgar-Osh (Kyrgyzstan) 400 km highway exists
– Murghab (Tajikistan)- Karasu dry port (China), 94 km
CPEC - Kyrgyzstan
CPEC
9
CPEC - Tajikistan
CPEC
10
11
12
Way Forward
Success of Heart of Asia Process
Regional transit trade agreements
• Cross Border Agreements:
• We are working on modalities to accede to Agreement
on Cross-Border Transport of Persons, Vehicles and
Goods within the framework of Central Asian Regional
Economic Cooperation (CAREC), which is under the
auspices of ADB which will facilitate transit trade in the
region.
Way Forward
Regional energy and infrastructure projects
• CASA – 1000 and TAPI
• Purchase of electricity from Turkmenistan
• Import of electricity from Iran to Quetta and Gwadar
Regional connectivity through road and rail networks
•
•
•
•
Peshawar-Kabul Motorway
Peshawar-Jalalabad
Chaman-Spinboldak railway links
Chitral - Ishkashim Road Link
Way Forward
Air Connectivity
• Most of the Regional Countries do not have direct air links
• Air links will promote people-to-people contacts, economic
relations and tourism
• Pakistan’s new Aviation Policy announced recently is
progressive and forward-looking
• Options may be explored to allow foreign and Pakistani
private carriers if they express interest in flying to and from
Pakistan
Way Forward
Energy
• Pakistan’s special emphasis on TurkmenistanAfghanistan-Pakistan-India (TAPI) gas pipeline.
• Gas sale and Purchase Agreement has been signed
• Due to delays the project cost is now estimated at US $
10 billion
Way Forward
• Strong emphasis on early completion of CASA-1000
project. We need to stay engaged to ensure its
completion by May 2018
CASA-1000
» Master Agreement and Power Purchase Agreement has been
signed
» Power Purchase Agreement with Afghanistan is being negotiated
» Construction will start in the last quarter of 2015
» Expected completion in May 2018
Way Forward
• We may vigorously pursue import of 1000 MW electricity from
Turkmenistan
– Turkmenistan has offered 1000 MW electricity to Pakistan
– A joint working group on Power will formulate plan of action for import of
electricity from Turkmenistan
– Quantity of electricity may be enhanced in future
Way Forward
• Pursue early implementation of 1000 MW
electricity from Iran to Quetta
– Presently Iran provides 74 MW (For Makran area)
– 30 MW be will added by the end of the year
– Iran will provide additional 100 MW to Gawadar once
transmission lines are laid (Bolan-Gawadar)
– 1000 MW from Iran to Quetta has been approved
– Iranian concerns with regard to payment has been
addressed. US $ 30 million equivalent has been paid in
Pak Rupees as a first tranche
Challenges
• Afghanistan’s crucial role as the land-bridge
connecting
South
Asia,
Central
Asia,
Eurasia/Europe and the Middle East
• Security Situation particularly in Afghanistan
• Lack of economic progress in Central and South
Asia
• Barriers to trade and investment pertaining to
trade policy, connectivity, banking infrastructure
etc.
Challenges
• Trade barriers including complex tariff schedules,
relatively high tariffs, and in some cases, restrictions on
access to foreign exchange,
• Problem with uniform customs procedures
• Limited air connectivity
• Linkages in several areas of trade finance and credit
guarantee and insurance facilities
• Unpredictable investment climate
• Incomplete Policy reforms focusing on privatization
and restructuring of the larger economic entities
Conclusions
• Connectivity is the defining theme of today’s world,
particularly in Asia, and is a dire need of our region
• Full realization of Pakistan’s socio-economic potential is
contingent upon embracing connectivity and promoting
regional economic integration
• The upcoming SAARC and ECO Summits in Pakistan offer a
valuable opportunity to advance these important goals,
consistent with our national interest and with appropriate
safeguards. A concerted government approach would be
essential
• We will continue to promote the agenda of connectivity and
regional economic integration
Thank You!