The new great game on the roof of the world

Pepe Escobar

CPEC or the China Pakistan Economic Corridor, involves road and rail projects, dams and a pipeline from Gwadar to Xinjiang, but it is very long-term endeavor as a visit to the country revealed, says prominent Brazilian journalist Pepe Escobar in his article for Asia Times, titled: “The new great game on the roof of the world.”

On top of the graceful Baltit Fort, overlooking the Hunza Valley’s Shangri-La-style splendor, it’s impossible not to feel dizzy at the view: an overwhelming collision of millennia of geology and centuries of history.

We are at the heart of Gilgit-Baltistan, in Pakistan’s Northern Areas, or – as legend rules, the Roof of the World. This is an area about 70,000 square kilometers crammed with spectacular mountain ranges and amidst them, secluded pristine valleys and the largest glaciers outside of the Polar region. The location feels like vertigo. To the north, beyond the Batura Glacier, is the tiny northeast arm of Afghanistan, the legendary Wakhan corridor. A crest of the Hindu Kush separates Wakhan from the regional capital Gilgit. Xinjiang in China starts on Wakhan’s uppermost tip. Via the upgraded Qaraqom highway, it’s only 240 km from Gilgit to the Khounjervaab Pass, 4,934 meters high on the official China-Pakistan border.

What used to be called the Russian Pamir, now in Tajikistan, can be seen with naked eyes from one of the peaks of the Qaraqoram. To the east, past Skardu and an arduous trek that may last almost a month, lies K2, the second highest peak in the world, among a mighty group north of the Batura Glacier (also known as Baltoro), which is 63km long.

To the south lies what the locals define as Azad or Free Kashmir and slightly to the southeast what they call Indian-occupied Kashmir. Following the 1948 border war between the newly partitioned countries of India and Pakistan and the UN armistice that followed, a temporary ceasefire Line of Control (LoC) was established between the two countries. It runs down from the Qaraqom towards the Nanga Parbat – the killer mountain, dividing Kashmir into two virtually sealed halves.

Driving across the Qaraqom Highway (see part 2 of this report) we were face to face with three massive mountain ranges running in different directions. The Qaraqoram roughly starts where the Hindu Kush ends and then sweeps eastward – a watershed between Central Asian drainage and streams flowing into the Indian Ocean.

The Himalayas start in Gilgit and then run southeast through a cluster of high peaks, including the Nanga Parbat, directly on the Islamabad-Gilgit air route. The Qaraqoram and the Himalayas are like an extension of each other, while the Hindu Kush starts in southern Afghanistan and ties up with the Qaraqoram north of the Hunza Valley. Within a radius of roughly 150 km from Gilgit and Skardu, there are no less than 90 peaks towering over 8,000m.

Strategically, this is one of the top spots on the planet, a protagonist of the original Great Game between imperial Britain and Russia. So it’s more than appropriate that here is exactly where a protagonist of the New Great Game, the China-Pakistan Economic Corridor (CPEC), the flagship project of the New Silk Roads, or Belt and Road Initiative (BRI), actually starts, linking western China’s Xinjiang to the Northern Areas across the Khounjervaab Pass.

CPEC is the supreme jewel in the Belt and Road crown, the largest foreign development or investment program in modern China’s history, loaded with way more funds than years of US military aid to Islamabad. And we are indeed in Ancient Silk Road territory. Looking at the millenary trail parallel to the Qaraqoram, restored by the Agha Khan Development Foundation, it’s easy to picture the great Chinese traveler Hiuen Tsang traversing these heights in the 7th Century, and naming them Polo-le. The Tang dynasty called it Great Polu. When the Italian Marco Polo trekked in the 14th Century, he called it Bolor.

Early last month, I was privileged to drive on the upgraded Qaraqom Highway along CPEC all the way from Gilgit to the Khounjervaab, and back, with multiple incursions to valleys such as lush, pine-forested Naltar, Shimshal, Kutwal and receding glaciers, such as Hopper and Bualtar.

The Qaraqom Highway was originally conceived in the 1970s as an ambitious political-strategic project able to influence the geopolitical balance in the subcontinent, by expanding Islamabad’s reach into previously inaccessible frontiers. Now it’s at the heart of a trade and energy corridor from the China-Pak border all the way south to Gwadar, the port in Balochistan in the Arabian Sea a stone’s throw from the Persian Gulf. Gwadar looks likely to be a crucial springboard to China becoming a naval power – active from the Indian Ocean to the Persian Gulf and on to the Mediterranean, while CPEC, slowly but surely, aims to change the social and economic structure of Pakistan.

Previous Pakistani Prime Minister Nawaz Sharif was an avid CPEC supporter after he won the 2013 elections. At the time current Prime Minister Imran Khan’s Tehreek-e-Insaf (PTI) party, winner of elections held in last July, had already polled second nationwide and rose to power in the strategic Khyber-Pakhtunkhwa province – straddling the area between Islamabad and the tribal belt.

Sharif, in June 2013, when he was about to enter negotiations with the Chinese, was lauding what would become CPEC as an infrastructure scheme that “will change the fate of Pakistan”. So far that has translated mostly into new hydroelectric dams, coal-fired power stations, and civil-nuclear power. The China National Nuclear Corporation is building two 1,100 MW reactors near Karachi for nearly $10 billion, 65% financed by Chinese loans. This is the first time that the Chinese nuclear industry has built something of this scale outside of their country.

More than a dozen CPEC projects involve power generation. These projects may not be as high-speed rail and pipelines, which could arrive much later; after all CPEC in its planned entirety runs to 2030.

Of course, monumental business decisions will have to be addressed; the staggering cost – and state of the art engineering – involved in building a railway parallel to the Qaraqom; and the fact that oil pumped via a pipeline from Gwadar to Xinjiang might cost five times more than via the usual sea lanes all the way to Shanghai.

Imran Khan is way more cautious than Sharif, who had a “China cell” inside his office and commanded the Pakistani Army to set up a 10,000-strong security force to protect China’s CPEC investments.

But Khan knows well about the firepower behind CPEC: the Silk Road Fund, the Asian Infrastructure Investment Bank (AIIB), CITIC, Bank of China, EXIM, China Development Bank. The Chinese Academy of Social Sciences (CASS) projects that BRI could mobilize as much as $6 trillion in the next few years. China’s ambassador to Pakistan, Yao Jing, never tires to stress that Pakistan’s serious debt problem relates to the initial phase of CPEC, due to the massive import of heavy machinery, industrial raw materials and services.

As I learned in Islamabad in various discussions with Pakistani analysts, Khan actually wants to expand CPEC and prevent it from leading Islamabad towards an unsustainable debt trap. That would mean tweaking CPEC’s focus away from too much infrastructure development to technology transfer and market access for Pakistani products. Financing for agriculture projects, for instance, could come via CPEC’s Long Term Plan, which unlike the so-called Early Harvest Plan does not come with a price tag attached and can be negotiated freely between Islamabad and Beijing.

According to a 2016 IMF report, $28 billion in projects included in Early Harvest will be completed by 2020: $10 billion to develop road, rail and port infrastructure, and $18 billion in energy projects via Foreign Direct Investment (FDI), with Chinese firms using commercial loans borrowing from Chinese banks.

CPEC though is an extremely long-term endeavor. Other CPEC investments in energy and transportation infrastructure financed by China will be finished only by 2030. A new CPEC emphasis on industrialization via technology transfer would allow Pakistan to produce some of what China imports. That would imply renegotiating the Pakistan-China Free-Trade Agreement (FTA), getting to the level of preferential treatment that China offers to ASEAN.

Gilgit-Baltistan is the safest place in the whole of Pakistan. Here, there’s no “terror threat” by the Pakistani Taliban or dodgy al-Qaeda or Daesh spin-offs. Major spoken languages are Shina and Burushaski, not Urdu. The population is overwhelmingly composed of Ismaili Shi’ites – like Karim Shah, an encyclopedia of Central and South Asian history and culture reigning over a cave of wonders in Gilgit where anything from authentic heads of Gandhara Bodhisattvas to 18th Century silk Qom carpets from a Persian royal family can be found.

We spent hours talking about Khorasan, the original Kipling-esque Great Game, Col. Durand (who drew the Durand Line separating Pashtuns on both sides of an artificial border), the Kashmir question, the astonishingly complex geo-eco-historical system of the Northern Areas, and of course, China.

Shah imparted the impression – confirmed by other traders – that the local population may see some tangible CPEC-related benefits, but does not know exactly what Beijing wants. Chinese visitors – engineers, bureaucrats – are remote; tourism has not picked up yet, as in the case of the Japanese, who have been Northern Areas enthusiasts for decades. Thus, an improvement in Xi Jinping’s “people-to-people exchange”, a key component of BRI, seems to be in order.

Legend rules that Hunzakuts, the inhabitants of the glorious Hunza Valley, are descendants of three soldiers of Alexander the Great who married beautiful Persian women of high aristocracy. While Alexander campaigned along the Oxus, the three couples traveled across the Wakhan corridor, discovered the marvelous valley, and settled down.

When I crossed an austere village by the Qaraqom, visibly out of place, my Ismaili driver Akbar noted that these were “Wahhabis”.

Finding Gandhara art in Gilgit made perfect sense. Gandhara historically formed a sort of fertile and irrigated triangle between the Iranian plateau, the Hindu Kush and the first peaks of the Himalayas. Between the 6th Century BC and the Islamic invasions, it was the crossroads of three cultures: India, China and Iran. And it was here that an extremely original Greco-Buddhist art and culture flourished, way after Greek power had waned.

As a new 21st Century crossroads, CPEC faces stern challenges – from geology (constant landslides and floods in Gilgit-Baltistan) to wobbly security in Balochistan, threatened by a combination of separatist and religiously or politically manipulated movements. I was not able to visit Gwadar and the south of CPEC even though contacts in Islamabad supplied military sources with an application for a NOC (No Object Certificate) weeks in advance. The military response: too “sensitive”, as in dangerous, for a lone Western journalist.

China will need to find a way – perhaps via negotiations inside the Shanghai Cooperation Organization – to mollify India on CPEC’s route straddling Kashmir.   

Few may remember that, during the 1950s, way before the India-China border war in 1962, there was trouble on the China-Pakistan border, when Beijing seized 3,400 square miles of Kashmir, including parts of old Hunza, whose Mirs always recognized Chinese suzerainty. When the British had first seized Hunza in 1891, the Mir actually fled to China.

This puts into perspective some fabulous documents preserved at Baltit Fort, like China-Baltistan trade agreements and a picture of Zhou EnLai visiting the fort in the early 1960s.

It’s also fascinating to remember that at the time Zhou Enlai already thought about Karachi – no Gwadar at that time – connecting to an “ancient trade route, lost to modern times, not only for trade but for strategic purposes as well”. Xi Jinping has definitely read his Zhou EnLai thoroughly.

Nowadays, the President of Azad (Free) Jammu and Kashmir, Sardar Masood Khan, always stresses that “unlike Indian propaganda”, the Pakistani side is “thriving politically and economically”, and CPEC could also be beneficial for Indian Kashmir. As it stands, this remains a red line for New Delhi.

At the National Defense University in Islamabad, I was shown a paper by Li Xiaolu, from the Institute of Strategic Studies at the National Defense University of the PLA detailing how Beijing hopes that “by opening China’s west to Central and South Asia, building better transportation infrastructure, and by encouraging trade with South and Central Asian countries, the development of manufacturing, processing and industrial capacities in Western China can be promoted”.

Now compare it with road and rail infrastructure improved across Pakistan being able to turn the whole nation into an actual trade corridor, while the Pakistani Navy improves its defense in deep-sea waters with Gwadar positioned as a third naval base and offering support for Chinese ships across sea lanes close to West Asia and North Africa.

No wonder Chinese analysts share a virtual consensus about traditional Chinese wisdom favoring unity for prosperity – a key plank of CPEC and BRI – and prevailing over containment and confrontation.

For CPEC to work, Beijing needs three things: a political solution for Afghanistan, which is already being worked out inside the SCO, with China, Russia, India, Pakistan and Iran (as an observer) directly involved; stable relations between India and Pakistan; and certified security across Pakistan.

Beijing is actively encouraging closer connectivity between Afghanistan and Pakistan, with the Quetta-Qandahar railway and the Kabul-Peshawar highway. CPEC is actually expanding from the Qaraqom to the Khyber Pass, trespassing the artificial Durand line along the way.

In contrast, multiple factions in Washington continue to twist all possible fault lines to thwart these projects, with a propaganda campaign designed to portray BRI as a swamp of corruption, incompetence, a “debt trap” and “malign” Chinese behavior. Yet among all BRI corridors, material progress across CPEC is more than self-evident. I saw every village in the Northern Areas with electricity and most of them linked by fiber optics, a stark contrast to when I traveled a severely dilapidated Qaraqom, twice, two decades ago.

Pakistan now has a once in a lifetime chance to harness its geographical location – with borders intertwining centuries of history and culture with Iran, Afghanistan, Central Asia and West Asia – to set itself up as a key bridge between West Asia and both the Mediterranean and Western China.

Rumors abounded in Islamabad that Imran Khan is aiming for an international standard university in the capital, positioned as a center of study and research tracking the new mosaic of an emerging multipolar world. Young people power will be more than available, like Jamila Shah, currently at the National Defense University, doing a masters in Peace and Conflict Studies, and working with an NGO, the International Rescue Committee. Jamila, from Hunza, in Gilgit-Baltistan, is the face of Pakistan’s future. Still hostage to a corrupt oligarchy, cartelized industries, falling exports (60% of which are textiles), and with almost half of their youths aged from five to 16 out of school, Pakistan faces a Sisyphean task.

Economist Ishrat Husain has correctly noted that Pakistan’s model of “elitist growth” must be replaced by “shared growth”. Enter a modified CPEC opening the path ahead, hopefully like those cargo trucks defying the slippery, snowy Khounjervaab full blast.