By: Zulfiqar Ali Khan
Feroza Begum’s life forever changed when a massive landslide devastated Hunza Valley on January 4, 2010. The Attabad lake formed due to blockade of the Hunza River submerged most of the 64-year-old widow’s small land holdings located in Gulmit, depriving her extended family of the major source of livelihood.
On top of the widespread damages, the lake also inundated over 24 kilometers of the strategic Karakorum Highway (KKH)- the only road link between Pakistan and China- cutting off Begum and 25,000 other residents in Gojal tehsil from rest of Pakistan.
“The lake drowned most of our agricultural lands and then the government used the remaining lands in 2012 to realign the road [KKH],” she said, adding the government has not yet paid land owners despite the lapse of over seven years.
She said during the disaster, the Chinese government provided ration to the entire affected population for three consecutive years, giving them temporary relief.
Begum is not alone. At least 1,500 families belonging to Hunza, Nagar, and Gilgit districts have similar tales of misery. The government compulsorily acquired lands of local farmers, for two major projects: the upgradation of the 335-km long Khunjerab-Raikot section of the KKH in 2007, and the realignment of the 24-km portion of KKH in 2012. However, the landowners of both the projects were never fully compensated as required by the law.
The government is creating distrust among the local community by denying them of the meagre land compensation.
“The Land Acquisition Act of 1894 empowers the state to acquire land for projects in public interest,” said Didar Ali, who has filed a complaint against the National Highway Authority (NHA) in the office of the Federal Ombudsman, Islamabad. He said the law also provides a due procedure to acquire the land and fairly compensate those deprived of property.
“The government is creating distrust among the local community by denying them of the meagre compensation,” he added. He said even though the affected had visited all government offices and staged protests, it was to no avail.
The Federal Ombudsman Syed Tahir Shahbaz in his findings on June 28, 2018 wrote: “Inordinate delay in payment of compensation has occurred in the present case, therefore, maladministration on the part of the agency [NHA] is proved.” He recommended NHA to announce the compensation award immediately and release payments ‘within a period of two months.’
According to available documents, NHA has so far transferred only Rs74.13m to the account of District Collector, Hunza against the dues of KKH realignment project, out of the total liability of Rs428.49m.
“The high-ups at NHA and District Administration, Hunza have failed to fully implement the recommendations of the Federal Ombudsman,” said Meharban Abdul, whose land was acquired for the realignment project.
Ali said the district administration recently distributed cheques, amounting to 50% of the total compensation value, among landowners affected by the realignment project. “But there was no clue as to when would they get paid in full.”
The landowners also plan to file a petition in Gilgit-Baltistan Supreme Appellate Court against NHA and district administration regarding the width of the KKH for which the landowners are being paid. They contended that the agency had marked the right-of-way (ROW) up to 100 feet, but were paying for only 44 feet.
The landowners affected from the Khunjerab-Raikot section of the KKH also had similar complaints. The authorities have paid 60% compensation at some localities, but not a single penny in many other areas.
A Major Trust Deficit
“Gilgit-Baltistan is the gateway to China-Pakistan Economic Corridor (CPEC) and this type of red-tapism is creating distrust and suspicion among local community,” Ali said while demanding a proper inquiry against the concerned departments for mishandling the compensation issue.
“When the government is reluctant to pay even the meagre land compensation then how can we expect other promised benefits out of CPEC, said Sultan Ayub, the Aala Nambardar of Lower Gojal in Hunza.
At least 440-kilometer of the Karakoram Highway, the lifeline of CPEC, passes through Gilgit-Baltistan. This mega project has further magnified the geo-strategic and geo- economic significance of Gilgit-Baltistan.
Projected as a game-changer, CPEC was launched in 2015 as a set of economic and development project under China’s Belt and Road Initiative (BRI) (一带一路). It comprises loans, investments and grants of at least $60 billion that could grow to $100 billion by 2030.
The new PTI-led government in Islamabad, after months of deliberations, has announced the second phase of CPEC with focus on greater involvement of private sector, social sector cooperation and the involvement of third-party partners in CPEC projects.
Prime Minister Imran Khan attended the 2nd Belt and Road Forum held in Beijing from April 25 to 28. Pakistan’s delegation signed the second phase of China Pakistan Free Trade Agreement (FTA) along with a list of several other CPEC related memorandum of understandings (MoUs) and agreements in Beijing.
The China International Development Cooperation Agency and Pakistan’s Ministry of Planning, Development and Reforms signed the most important MoU for implementation of the social sector projects. Beijing would spend $1 billion on 27 projects in education, health, human resource development, poverty alleviation, agriculture, and water and irrigation sectors in Pakistan.
“China is looking for all the neighboring countries through different corridors,” said Dr. Hermann Kreutzmann, Professor of Human Geography at Freie Universität Berlin. “China’s interest is to have an unimpeded exchange and distribution of goods with Asia, Europe and Africa along and beyond the ancient Silk Road routes.”
KKH, built in the 1970s, was more a political and friendship project and did not had much economic significance. CPEC is a completely different story.
Kreutzmann has been involved in a number of fieldwork and academic research since 1977, in South and Central Asia with a special focus on Gilgit-Baltistan.
He said there are Mongolia-Russia, Central Asia-West Asia, China-Indochina Peninsula, Bangladesh-China-India-Myanmar, New Eurasia Land Bridge and the “China Pakistan Economic Corridor is only one of those economic corridors.”
According to Kreutzmann the KKH, built in the 1970s, was more a political and friendship project and did not had much economic significance. “CPEC is a completely different story. This development complies with the new economic strategy of China and that is to become the major producer and exporter to the world,” he said.
Gilgit-Baltistan: Key For CPEC
“Gilgit Baltistan remains indispensable for CPEC and yet not a single dollar has been allocated in the entire project for the region,” said Senator Taj Haider, who headed the Senate’s special committee on CPEC from 2015 to 2018.
GB’s role is to provide the services of road and some other services probably in terms of security and an enabling environment for this.
The senate committee held detailed consultation meetings with different stakeholders in Gilgit-Baltistan from August 8-11, 2016 before drafting its third interim report titled “Gilgit-Baltistan: The Gateway to CPEC”.
“No one in Gilgit-Baltistan will oppose CPEC,” said Nawaz Khan Naji, a legislator and lone nationalist leader in Gilgit-Baltistan Legislative Assembly (GBLA). “When roads will connect in all four directions then GB will become a center of trade and tourism,” he said.
Naji is the chairman of his own faction of Balawaristan National Front (BNF).
Being the gateway of CPEC, the only demand is that local people be engaged and satisfied, he said, adding: “We see on TV that there are many activities going on in Punjab and near Gwadar, but we do not see anything on ground in Gilgit-Baltistan.”
Aziz Ali Dad, a noted local scholar and researcher, highlighted that CPEC has become a subject and source of regional politics in Pakistan. “We need to understand CPEC in a broader context of BRI, but here everyone is looking at what each province can get out of it. In Gilgit Baltistan, we are also thinking of CPEC at district levels,” he said.
“We are actually trying to cage an elephant in a small room,” he added.
The residents of Gilgit-Baltistan have a lot of expectations from this multi-billion project, but the region has a limited a role to play.
“GB’s role is to provide the services of road and some other services probably in terms of security and an enabling environment for this,” Dr. Kreutzmann said.
He said these areas are the bridge between two areas of interest. “The ends of the corridors are the important areas and the thoroughfare is the neglected ones,” he added.
He said when it comes to establishing these kinds of thoroughfares then the road suddenly plays a major role and gets an own life in it. “When the road project is initiated, one has to be very careful that everybody along the line is benefitting and getting the same attention,” the German professor said.
Mainstreaming Gilgit-Baltistan can only help the local people in influencing policies in Islamabad.
Capt. (rtd.) Mohammad Shafi Khan, the opposition leader in the Gilgit-Baltistan Legislative Assembly (GBLA) complains of being sidelined in the entire process of CPEC’s planning and implementation.
“Contrary to the official claims, the locals feel excluded from the decision-making process and direct benefits of this mega project despite being the entrance of CPEC. GBLA unanimously passed a resolution in August 2015 demanding to include G-B in CPEC consultative committee and set up economic zones in the region,” Khan said.
The president of the Gilgit-Baltistan chapter of Pakistan Peoples Party Advocate Amjad Hussain has a different point of view. He noted that mainstreaming Gilgit-Baltistan can only help the local people in influencing policies in Islamabad.
“Development has never been our issue. We demand to address the basic issue and that is the political and constitutional status of Gilgit-Baltistan. This is a prerequisite to safeguard Pakistan’s interest in CPEC and other mega projects in the region,” he said.
As a senior lawyer, Advocate Hussain has also served as the president of the Gilgit-Baltistan Chief Court Bar Association.
We will not ‘beg for a share in CPEC’, the government should declare ‘GB as a provisional province,’ he demanded.
Gilgit-Baltistan in Constitutional Limbo
The consequences of the lingering political status of the region has been an issue of serious concern in Pakistan.
The Human Rights Commission of Pakistan’s fact-finding mission in its principal finding in August 2016 noted: “The people of Gilgit-Baltistan are nearly unanimous in seeking their territory’s recognition as a part of Pakistan, by virtue of their accession to the state in November 1947 and allowed the status of a full unit of the federation.”
The mission in its report titled “Gilgit-Baltistan Aspiration for Identity, Integration and Autonomy” recommended to extend all fundamental rights to Gilgit-Baltistan guaranteed in the constitution of Pakistan.
The GBLA has also passed resolution multiple times demanding complete provincial status for Gilgit- Baltistan and representation in all national institutions.
The question of the constitutional status of the region has been held in limbo for nearly seven decades.
These resolutions were only opposed by Nawaz Khan Naji, who demanded internal autonomy for Gilgit-Baltistan.
The nationalist leader has a different stance as compared to the leaders of the mainstream political parties. “Gilgit-Baltistan is part of the ‘Kashmir dispute’ and principally GB should be accepted as a ‘political unit’ and whatever dealings are made between China and Pakistan, ‘Gilgit-Baltistan should be onboard’, and their will and stake should also to be included in every process,” he said.
“We do not have any representation in national assembly, senate and in the federal government. Our provincial assembly can only discuss construction of roads, schools, hospitals and such civic facilities. Even the assembly does not have the right to make decisions about the area,” Naji said.
According to opposition leader Khan the government was neglecting Gilgit-Baltistan to avoid international pressure owing to GB’s link to the Kashmir dispute in United Nation. “We consider Gilgit-Baltistan as undisputed part of Pakistan, so we should get equal attention. If the policy makers consider the region as out of constitutional ambit then people can demand to include the province as a third party in all dealings,” he said.
The year 2018 witnessed a heated debate on the constitutional status of Gilgit-Baltistan due to media speculations regarding the findings of the Sartaj Aziz committee. This committee was mandated to put forward recommendations regarding the constitutional status of Gilgit-Baltistan.
The Kashmiri leadership on both sides of the line of control put strong resistance against any move to constitutionally integrate Gilgit-Baltistan as the fifth province before the settlement of the Kashmir dispute. AJK Legislative Assembly unanimously passed resolution demanding all constitutional and economic rights to Gilgit-Baltistan without declaring it a formal province.
“The question of the constitutional status of the region has been held in limbo for nearly seven decades,” noted Dr. Ehsan Mehmood Khan in a research titled “Constitutional Status of Gilgit- Baltistan: An Issue of Human Security”. Dr. Khan now holds an important position in Gilgit-Baltistan.
“If a provisional constitutional arrangement is adopted, a parallel already exists in the form of the Sino-Pakistan Boundary Agreement -1963,” he wrote.
The Article-6 of the said agreement points to its provisional nature and that the negotiations will reopen after the settlement of Kashmir issue.
Dr. Khan stressed on the leadership to handle the Gilgit-Baltistan issue with a sense of urgency. “It is also imperative in the wake of CPEC so that the region does not look like un-governed, less-governed or constitution-less,” he noted.
Chief Minister of Gilgit-Baltistan Hafiz Hafeez Ur Rehman said the PML-N government had granted all the legislation powers and financial rights to GBLA through Gilgit-Baltistan Order-2018. “There cannot be taxes without representation,” he said. When taxes were extended to Gilgit-Baltistan then Mian Nawaz Sharif exempted GB from all taxes for 5-year, he said. Rehman also holds the position of the president of PML (N) in Gilgit-Baltistan.
He believes these measures were taken to address the long-standing deprivations in Gilgit-Baltistan and to improve local governance.
Nawaz Sharif’s federal government promulgated Gilgit-Baltistan Order-2018 in May 2018 by replacing the GB Empowerment and Self-Governance Order 2009, introduced by the then PPP’s government in Islamabad. The Zardari-led government, in 1999, had renamed Northern Areas of Pakistan as Gilgit Baltistan and gave a province-like status to the region.
Non-implementation of Supreme Court’s Judgment
In contrary to the poplar demand in Gilgit Baltistan, as noted in HRCP’s fact finding mission, the January-1, 2019 decision of the supreme court of Pakistan further complicated the political issue by declaring the whole Gilgit-Baltistan as part of Jammu and Kashmir. Historically, only some parts of Gilgit-Baltistan have remained under the direct control of the Maharaja of Kashmir after 1846.
The Supreme Appellate Court of Gilgit-Baltistan had set aside the Gilgit-Baltistan Order, 2018 on July 13, 2018 while restoring the 2009 governance order. This was then challenged in the Supreme Court of Pakistan, which then suspended the order of the Appellate Court.
The Supreme Court of Pakistan in its final judgment, announced on January 1, ordered the government of Pakistan to grant the fundamental rights to the residents of Gilgit-Baltistan. The court order noted that: “There can be no prejudice to Pakistan’s position on the plebiscite issue if the men, women and children living in GB are guaranteed basic human rights and a role in their own governance within a framework of a constitutional nature.”
The court noted the proposed Gilgit-Baltistan Governance Reforms, 2019 ‘shall be forthwith promulgated by the President on the advice of the Federal Government, and in any case within a fortnight hereof’. They have been deprived of this choice for far too long and at far too great a cost, the order reads.
Despite a lapse of over 4-month this direction of the Supreme Court has not been implemented.
According to the Chief Minister of Gilgit-Baltistan the court order has caused more confusion in people’s minds and further complicated the issue. He said the provincial and federal governments have mutually drafted a new reform package in order to come out of this political and constitutional stalemate. He said the federal government wants to pass this act through the National Assembly.
“We have asked the federal government to approve it as an act from a joint session of GBLA and Gilgit-Baltistan Council,” he said. This will give local ownership and will also address local deprivations and claims that decisions are imposed on us, he added.
Will CPEC Benefit Gilgit-Baltistan?
Most of the development activities impact Gilgit-Baltistan, directly or indirectly, as there is no other land route that connects the head of this corridor with its tale. The federal and provincial governments have been highlighting different mega projects for Gilgit-Baltistan. These include two hydropower projects, Maqpoon Das Economic Zone, and construction of Ghizer-Chitral expressway along with improvement of KKH. Construction of a new dry port in Havelian has also remained a major concern for the local people.
Nawaz Sharif thought more about his own constituency and focused more on making investments into metros, circular railway and thermal power generation.
Senior lawyer Advocate Hussain believes the federal leadership is not willing to give any direct benefit to GB under CPEC because of their limited vision. “Nawaz Sharif thought more about his own constituency and focused more on making investments into metros, circular railway and thermal power generation,” he said.
The focus, he said, should have been on improving the KKH corridor, providing trade infrastructure and utilizing the unlimited clean and cheap hydropower potentials in Gilgit-Baltistan, instead of constituency-level projects.
CPEC is based on business principles and there is no charity or foreign aid but investment.
The Director of the Center for Research on CPEC Saranjam Baig sees different reasons for Gilgit-Baltistan’s exclusion from CPEC projects. “CPEC is based on business principles and there is no charity or foreign aid but investment,” he said, adding that the investor sees where he can maximize his profit.
“In Pakistan, under CPEC over 50% of the total investment is in the energy sector. Gilgit-Baltistan is a very small market and even not connected through grids. The investors cannot get a return of investing in a market like Gilgit-Baltistan,” Dr. Baig said.
He said an investor would never risk spending in an area which is officially declared disputed.
China-Pakistan Trade Pattern and Prospects for CPEC
The official statistics reveal the scale of trade through the Khunjerab pass has been insignificant since the opening of the KKH for commercial traffic in 1986.
Only 1.5% of Pakistan’s exports to China is channelized through Gilgit-Baltistan.
According to World Bank’s document “Gilgit-Baltistan Economic Report” the scale of existing trade through the Pakistan-China border at Khunjerab pass along the KKH corridor is very limited. The document reads that only 4% (Rs 3.1 billion) of Chinese imports to Pakistan came through the GB corridor during the fiscal year 2007-08. Similarly, only 1.5% of Pakistan’s exports to China is channelized through Gilgit-Baltistan.
The Global Times, a Chinese English language newspaper, reported on February 12, 2017 that 98% of trade between the two countries was by sea.
There were different factors that make it harder for the Khunjerab corridor to realize anticipated gains from the overall trade.
Trade facilitation infrastructure is also not up to the mark and non-tariff barriers have further limited the trade volume.
“The issue of limited trade is associated with the high cost and unreliability of transportation through KKH and small scale of economic activity in Gilgit-Baltistan,” said Zafar Iqbal, Chairman of the Silk Route Dry Port Trust, who has also served as the Managing Director of the Northern Areas Transport Corporation (NATCO).
Iqbal said the trade facilitation infrastructure is also not up to the mark and non-tariff barriers have further limited the trade volume through this border. He said this was despite that both governments were facilitating local traders through border pass for China’s Xinjiang Autonomous Region.
“KKH is passing through a very difficult geographical terrain. Landslides and other natural and human interventions can easily disrupt this route,” said opposition leader Khan.
The Khunjerab pass also remains closed for almost four months every year.
Rehman is of the view that Khunjerab corridor is not economical to import Chinese goods for domestic consumption in Pakistan because of the increasing exchange rates, expensive fright rates and many other factors. The Chief Minister added that all the goods for domestic use were transported via sea.
The primary purpose of CPEC route is accessing Middle East and other markets via Gwadar.
“This need to be understood that the primary purpose of CPEC route is accessing Middle East and other markets via Gwadar,” he said. This route is about 10 days shorter than the sea to reach Middle East markets, he added.
Dad links the trade volume through Khunjerab Pass with development of Xinjiang region as a new industrial hub. “China is developing industrial zones in Xinjiang and those goods will be transported through this route,” he said.
In a collaborative study, the researchers from Beijing’s Jiaotong University and Karakoram International University’s (KIU) Center for Research on CPEC, have established that the Khunjerab corridor is short and less costly. “China can save about $71 billion dollars through Khunjerab route on its imports and exports in terms of shipping costs from selected destination countries from Europe and the Middle East,” the research calculated.
This study suggests a large portion of trade from western parts of China will be shifted to Khunjerab Route following the completion of CPEC projects.
Khunjerab, The Abandoned Trade Route
Traders and legislators in Gilgit-Baltistan blame the federal governments for neglecting the trade and economic potential of this geo-strategic route.
Advocate Amjad Hussain criticizes the federal governments for leaving this route abandoned, “despite it being the shortest.”
He said historically there were flow of commodities from both sides as part of the 1986 border protocol agreement. “The barter trade was converted to open trade and it is now just unilateral as we are just importing Chinese products,” Hussain said.
Sost town and Khunjerab Pass even lack toilet facility.
Sost town is facilitating the whole trade and strategic relationships between both countries, but the government of Pakistan has “zero investment” there, he added. “Sost town and Khunjerab Pass even lack toilet facility,” he said, expecting facilities required to facilitate international trade and economic activities is just a dream.
The China Pakistan Free Trade Agreement (CPFTA) was signed on November 24, 2006. The overall Chinese exports to Pakistan were valued at $15 billion compared to Pakistan’s exports of $1.5 billion, causing a deficit of $13.5 billion in FY18.
According to Pakistan Business Council one of the main reasons for low levels of exports to China are China’s Non-Tariff Barriers (NTBs). Pakistani exporters face NTBs in quality, safety and technical standards under Sanitary and Phytosanitary Standards (SPS) and Technical Barriers to Trade (TBT) requirements of the World Trade Organization (WTO) Agreement.
After years of negotiations both countries finally signed the second phase of FTA on April 28, 2019 in Beijing.
Trade deficit through Khunjerab increased when the barter trade was converted to open trade in 1998.
Chief Minister Rehman said the trade deficit through Khunjerab increased when the barter trade was converted to open trade in 1998. He said China is not to blame as we have not worked on scaling the quantity and quality of local produces and our marketing strategies were also not up-to the mark.
The nationalist leader Naji blamed some local traders for misusing the incentives being given to the local traders. No doubt, Pakistan’s government provided opportunities to local people, but they used these incentives to clear trade goods of traders from outside GB. “Instead of thousands of people getting benefits, only 10 to 12 local people are now just carrying the cargo of traders from other regions,” he said.
Javed Hussain, a legislator and trader, believes the strict regulation of custom and FBR has made small-scale business difficult for local traders.
“People in other border areas have become billionaires because of the direct or indirect incentives and relaxation,” said Hussain, who has also served as the president of Gilgit Baltistan Chamber of Commerce and Industry. Above 50,000 containers of Afghan Transit Trade get reentry to Pakistan that is not even a big deal, he said, but our total export is just a thousand containers, he said.
He demanded Gwadar like tax exemptions for the traders of Gilgit-Baltistan. There is huge demand of cherry from Gilgit-Baltistan in Kashgar but due to quarantine and custom regulations it is not encouraged to export.
Cherries of Rs200-400 per kilo can be sold at Rs2,000 across the border in Kashgar.
“Dry fruits of Gilgit-Baltistan were famous globally but now that too is being exported from China. We never branded our products and we could not differentiate between the qualities,” Dr. Baig said.
“Cherries of Rs200-400 per kilo can be sold at Rs2,000 across the border in Kashgar but to export cherries it has to be first transported to Lahore for a quarantine spray, he added.
The distance from Gilgit to Tashkurgan is just 170 km whereas Lahore is located at over 1,000 km south of Gilgit.
Dr. Baig said Chinese customs also hold the freight for a day or two which further damages the quality of the perishable items. “We have a free trade agreement, so they are legally bound, but the Chinese officials practice non-tariff barriers and the federal government can only handle this,” he said.
Opposition leader Khan said although the local traders do not require visa and can visit Xinjiang on the border pass, but they were increasingly facing discrimination. “The humiliating behavior of the Chinese immigration officials discourage people to trade through this border,” he said.
They have all the rights to regulate the border, but this should not hurt the self-esteem of our people, he said, adding that people also face problems in getting hotel rooms in Xinjiang.
Agreeing with the opposition leader, Iqbal also called for a respectful bilateral relationship. “We respect and welcome whoever comes from China, the laborers or the high-up,” he said.
Locals complain they are even not allowed to use toilets while travelling from Khunjerab Pass to Tashkurghan. Trade cannot happen anywhere in the world with this attitude, he said.
Many traders have raised the issue of how during 2018 they were not allowed to travel beyond Kashgar to Urumqi and other parts of Xinjiang province, citing a new agreement signed with the Chief Secretary of Gilgit-Baltistan.
The provincial president of PPP said China is home to a large population and Gilgit-Baltistan has the potential in the form of organic fruits, herbs and gemstones. He said there is a lot of potential for potato as well, which is also being supplied to the markets of Pakistan.
“To export these the requirement is certification and quarantine facilities which the government has not yet established in Sost,” he said.