 Good morning. My name is Andrew Wilder. I'm the Vice President of the Asia Center here at the U.S. Institute of Peace. I'd like to welcome you all today to our event with the Pakistan Minister of Planning on the China-Pakistan Economic Quarter. Many of you are familiar faces here and know USIP, but for those of you who don't, we were founded in 1984 by Congress as an independent national institute dedicated the proposition that peace is possible and peace is essential for our national security interests, as well as global security. We pursue our vision of a world without violent conflict by working on the ground with local partners, as well as back here in the U.S., where we try to serve as a resource to policymakers and practitioners about drivers of conflict and peace-building tools to prevent and reduce violent conflict. USIP has been working in Pakistan for many years. We worked there with partners, a network of civil society organizations, social entrepreneurs, scholars, as well as the government to support local programs, conduct research and analysis, and convene events such as the one we're doing here today. We've had the privilege in terms of one of our programs to actually partner with the Ministry of Planning and helping to support a peace and development unit within the Planning Ministry to basically look at the conflict dynamics of some of the programs and projects that the Planning Ministry reviews and approves. It is my great honor today to welcome back to USIP Minister Asan Iqbal, who is the Planning Minister of Pakistan, Deputy Chairman of the Planning Commission, and a member of the National Assembly of Pakistan. He has previously served as the Federal Minister of Education and Secretary of Information for the Pakistan Muslim League, the Nawaz Group, and since 2011 has served as Deputy Secretary General of the PMLN. That's an impressive ringtone. He is a graduate of the University of Engineering and Technology in Lahore and received an MBA from the Wharton School of Business. In his role as Planning Minister, Minister Iqbal has taken the lead responsibility for steering the China-Pakistan Economic Corridor. A series of energy, road, and infrastructure projects aimed at increasing Pakistan's connectivity with the region and boosting its economy and of course a central part of the China's Belt and Road Initiative. Since CPEC's inauguration, the project represents a major priority of the current Pakistani government and has also been a subject of study here in Washington and I think some of you maybe joined us for an event we had earlier in December looking at CPEC issues. We appreciate the opportunity to hear directly from the Minister today on how the program is going, some of the challenges, and the opportunities. And I would now like to take this opportunity to welcome you to the stage. Minister Iqbal will give some presentation on CPEC after which we'll have a moderated discussion and open it up to question answer and for a rich discussion with all of you. So thank you again. Thank you, Andrew, for a very generous introduction. Good morning, everyone. Well, I just came a couple of days ago and I have been busy with various meetings, haven't had a chance to overcome or beat my jet lag. So I avoid mourning engagements because without getting a kick, you cannot really do justice. But I'm really very grateful for a very generous introduction. It hopefully will give me some energy. You know, there was a guy like me who wasn't very fond or very good at public speaking. And every time he accepted an invitation, so the very thought of facing a very learned audience like you made him very nervous and jittery. So until this event was over, his jitterness would go on people around him, his personal staff. So one day his assistant very humbly and reluctantly asked him, sir, I know that speaking is not your piece of cake. And yet you keep on accepting these invitations, putting yourself in misery and making people around you their life terrible and hell. I wonder what is it that keeps you going? So he said, John, it is the pleasure of listening to the introductions. So I am also indeed very grateful for a very generous introduction. Well, the topic I want to speak to you today about is very important for Pakistan and for the region. And it is bringing some very positive changes in a country which has been very adversely affected due to conflict after 9-11 and has paid a very big price. We have lost over 10,000 lives to conflict, to terrorism. And probably there is no other country today which has been as big a victim of terrorism as we have been in these past years. As a result of this security situation, Pakistan's economy was also facing serious challenges. As investors were shy of coming to Pakistan, there were problems with travel and country's own economy also suffered greatly because no worthwhile investments took place in Pakistan's infrastructure. For the past 15 years, energy transport infrastructure did not get the consideration they deserved. As a result, both became big bottlenecks for Pakistani economy's growth. In 2013, when we came into office, 18 to 20 hours of power shortages had become a routine. As a matter of fact, the power shortages were so serious when you don't have power for 18 to 20 hours, you can imagine that the generators and the batteries you have to run your household, even there wasn't enough power supply to recharge them. So people had to start using candles in their homes and when they were burning candles to light their homes, media was writing that Pakistan has been thrown into stone age, where we are back to lighting our lives with candles. So that was, you know, the country in 2013. And as I said, it was largely because it was not getting the investments it deserved. The country was not also not managed well. And but overall the security environment I think was casting big shadows. So in middle, you know, in this way, background today, China Pakistan economic corridor has become a big blessing for the country. And we see revival of the economy. And I will share with you that how in different ways it is impacting Pakistan's economy and the region. Before I start, I would also like to share with you that, you know, we must understand that the world is changing, which we today know, as it is in terms of the economic centers. Europe has had its share of growth. United States and North America also had its share of growth. But these economies we have seen recently have become slow in their growth and have also matured largely. And now are looking for new basis of reinvigoration. But I think the future of growth in world economy is coming and going to be coming from Asian economies, which are now finding new engines of combustion within their self and are igniting new sources of growth. And today leading the world growth by posting, you know, very respectable growth rates. China and India are today the major engines of growth. And now hopefully Pakistan is also going to be joining them. And then we have other regions, which are also leading the way. So this is the new reality which is emerging in our part of the world. And in this context, we find that there is an increasing Eurasian dynamics which is developing. And Europe is also looking at partnership with Asia to take advantage of the new dynamics. I was recently at a conference in Moscow where ministers of transport from Asia and European countries had assembled. And there was great interest expressed by Russia and other European countries how they could align themselves with one belt, one road initiative, as well as China, Pakistan, economic corridor to create a stronger Eurasian access for future economic cooperation in the region. And within this Eurasian landscape, if you look at Pakistan, you will appreciate that Pakistan is at the intersection of three engines of growth, South Asia, which as a sub region has shown on average a growth rate of about 6% plus over past two decades. China, which has also shown a growth rate of 7% to 8% plus over past couple of decades. And Central Asia, which again has shown 5% to 6% growth rate average over past few decades. And also close by is Middle East. So if you look at the geography, Pakistan happens to be located at the intersection of these three engines of growth. And we feel that Pakistan can become a bridge for South Asia, China and Central Asia connectivity, where 3 billion people live, which is almost half of the world. So that is the geolocation or the geoeconomic location advantage of Pakistan, which we think offers great opportunity for us in future. As you all are aware that Pakistan and China have enjoyed very strong historic links. It is spread over generations based on all weather friendship and trust. There has been a very consistent relationship. It has weathered all kind of storms, but without even for once having any crisis in this relationship. It is all weather relationship, which is normally expressed in very strong terms that higher than Himalayas, deeper than deeper sea and sweeter than honey. So it is very kind of a metaphoric relationship that we have. And there is a long history from a Yub Khan, Bouto, Benazir, to this government. Everyone has tried to keep this relationship very steady. And we also hope that we can have a similar relationship with the United States. I always tell my friends here in the United States that Pakistan and United States decided to marry very early. And in this marriage, for at least three times, they have tried to file for a divorce. But on all the three occasions, divorce did not turn out to be an option. So the geostrategic compulsions forced them to come together and live together again. So if that is the destiny, we might as well, you know, find ways to live happily and have more stable relationship. And that is our desire that we wish to see a lot more stable relationship here. Now, as part of China's future economic vision, you are all aware that they have a one belt, one road vision, which is China's new silk road, which seeks to reinvent the centuries old silk route. But they also have a maritime silk road, which they feel can be a source of extension of trade through sea routes. And this is spread from China over to Europe to Africa and to Asia. And within this one belt, one road initiative, China Pakistan economic corridor is the flagship project and is the only corridor, which is in very advanced stage of actualization. If you look at Pakistan's development plan, we have a vision 2025, which seeks to put Pakistan in the top 25 economies by 2025. And it is based on seven pillars. We have a strategy to develop seven pillars for our future roadmap. And among these seven pillars, the seventh pillar is modern infrastructure and strengthening of regional connectivity. So we feel that leveraging Pakistan's geo economic advantage is critical to realizing our vision 2025. So therefore, CPEC is fusion of China's one belt, one road vision and Pakistan's vision 2025. So this is neither China's agenda nor it is Pakistan's agenda. It is a win-win agenda. So we both seek regional cooperation. We both seek economic opportunities by bringing regional co by promoting regional cooperation and by creating an infrastructure in the region, which will bring these countries together. So the context of CPEC revolves around these three realities. Rising Asia, the growth of Asian economy, which will serve over 3 billion people in our three regions, South Asia, China and Central Asia. China's one belt, one road vision and Pakistan's vision 2025, which also seeks regional connectivity. So in 2013, government of China extended invitation to Prime Minister Nawaz Sharif when he assumed office to visit China. So he made that visit in July. And on 5th of July, 2013, we signed memorandum of understanding that both China and Pakistan will work together to realize the vision of one belt, one road, China, Pakistan economic corridor. And it was just an MOU, just a piece of paper with someone I know who's signing this document in the picture you can see when he signed. So there was nothing except that piece of paper. But I think what is remarkable from Pakistan's point of view also and from China's point of view also that from this signing ceremony, within one year, we were able to reach an understanding over a portfolio of $46 billion that we will work together, on which we will work together. And this was not possible without very hard work by officials from both sides, experts. The number of studies had to be done and field trips had to take place. But I don't think that there is any parallel anywhere in the modern history that within one year, two countries have been able to put on ground an MOU into a portfolio of $46 billion. So we started in 2013. And in December 2016, the second picture you see is the picture when Prime Minister formally dispatched, you know, he was at the ceremony to see the dispatch of cargo which had gone from China to Pakistan and was dispatched through Gwadar Port to different destinations. So almost within three years, we have been able to put this vision not only into a portfolio of projects which are moving very fast, but also the ground links for transportation have been put in place. And today now, cargo is coming from China and going from Gwadar to its destinations. CPAC also helped us draw world's attention to Pakistan, which, you know, everyone thought is safe haven for terrorist networks, unfortunately. In April 2015, when President of China signed these launched rather projects worth $46 billion during his visit to Pakistan, it was then that the world began to see Pakistan as a safe haven for billions of dollars of Chinese investment. And all of a sudden, you know, Pakistan got a new identity. China-Pakistan Economic Corridor is a long-term project which has a timeframe from 2014 to 2030. We have some projects which will be completed as early harvest projects by 2018. Then we have some short-term projects which will be completed by 2020, then medium-term projects by 2025, and the long-term projects by 2030, which includes construction of a railway link between China and Pakistan by 2030. CPAC has four components. First is development of Gwadar Port along with socioeconomic uplift projects, so that Gwadar Port becomes a modern, smart city port in the region. And the benchmark we have is Singapore, Dubai, Hong Kong, and we are in the process of developing a master plan for next 20 years so that Gwadar can become a major maritime trade port of the region. This also includes, as I mentioned, many socioeconomic uplift projects. We don't want these projects to be only, you know, commerce-related projects. We also seek uplift of the local population, so there are many projects which relate to the health sector, to education sector, to basic facilities like water and other basic amenities for the people so that it brings a total uplift of the local economy also and the regional economy in terms of providing people opportunities and good quality of life. It also includes construction of a new airport which will start this year and it will be a modern airport. Then second is energy projects which has a portfolio of about 16,700 megawatts energy and this is, this covers all kinds of energy, but primarily what it does is that it harnesses Pakistan's own internal sources of energy so that we can have cheap energy or low cost of generation. Unfortunately, in the past we relied heavily on oil-based power generation and the governments in the past did not focus on having a healthy mix of power generation. So we had almost gone from 70 percent idle energy to 70 percent oil-based power generation and when the price of oil went as high as 80 and 100 dollars per barrel, it almost became impossible for us to run those power plants even though there were 10-15 hours of power shortages. So it was beyond our capacity to run those power units because energy was so expensive. So therefore one of the key considerations in working out this portfolio is that we must bring down one, the cost of power generation and two, we must also spread the risk. We must diversify the sources of energy so that if one, for example, if we are fully dependent on idle, we live in a region which has serious implications of climate change. So if you have a couple of years with drought or no rains, we might be in trouble. So we must have a spread across different sources so that we can sustain any unfavorable condition for any one type of energy. So coal, idle, wind, solar, LNG and also the transmission lines are part of this portfolio. So in next two years, we are working to add more than 10,000 megawatts of energy into Pakistan's power sector. And what it means, you will appreciate by knowing that in 66 years, we had only developed capacity to produce about 16,000 megawatts. So 66 years, we had 16,000 megawatts. And in three years alone, we are going to be adding 10,000 megawatts. So that shows the extent of investment that is taking place right now in energy sector. And as you all know, that energy for an economy is like oxygen is for human life. If you do not have energy in an economy, you cannot grow. Our industry was suffering, was crippled because it could not operate on full capacity. Our agriculture production was suffering. Our service sector was suffering. And most of all, our SME sector was suffering the most because they are heavily dependent on a utility public sector for provision of electricity. Third is infrastructure, which includes road, rail, aviation and data connectivity. So this infrastructure is helping us improve the condition of roads and as well as railway system in Pakistan. Again, both road and rail infrastructure had deteriorated considerably because in last 15 years, no one invested in them. And this had become a major bottleneck. The speed of railway had dropped from 100 plus kilometers to 60 to 80 kilometers on most of the sections because of the lack of maintenance of tracks and modernization of signaling system. Railway had almost closed its cargo service and that put more pressure on our roads and that crippled our roads. And now in last three years, we have invested in railway considerably put more than $1 billion to purchase new locomotives and rolling stock. As a result, railway has revived its cargo operations, which is making our system of logistics more efficient and economical. But what CPAC is seeking that it will modernize the entire Karachi to Peshawar main track over which 70 to 80% of our cargo goes, which will increase its speed from present speed of 80 kilometers to 160 kilometers. So the distance will be almost reduced by 50% and it will bring tremendous efficiencies also. We have a new airport at Gawadar in aviation sector, but also a fiber optic cable is being laid from Punjab to Islamabad, which will give us another source of data connectivity and that will greatly improve Pakistan's digital infrastructure. Right now Pakistan is also poised for becoming the next IT destination as we are the third biggest e-lancing country thanks to our very young enterprising population. And we hope that this data connectivity will give a boost to developing further potential to be an IT power in the region. And finally, the fourth pillar of CPAC is industrial cooperation and it includes setting up our favorite Gawadar Free Zone and nine more industrial zones all over Pakistan. In the recent meeting of Joint Coordination Committee of CPAC, which was held on 29th December in Beijing, we agreed to work on nine industrial parks all over Pakistan in all the provinces, one in all provinces. Also, you know, Kashmir, Gilgit-Baltistan, FATA and federal government so that no region or no province is left behind. And these parks actually seek to bring industry from China where the cost of production in China has increased. Now, as you know, the international business cycle initially says that countries have enjoyed great advantage with their cheap labor and labor-intensive, you know, sectors. But as they move up the ladder and they become more prosperous and the wages increase, it becomes very unattractive for them to continue in those industries and they have to move to a higher level of industries, more innovation-driven industries and more knowledge-driven industries. At that point, you know, these industries are relocated to destinations with cheaper cost of production. So China has been relocating much of its industry to Vietnam, to Laos, to Burma, to many other countries in the region. And we see, we hope that with this logistics, which roots which are being developed, many of those industries will then become, you know, attractive options for these industrial parks. And we are now working together through a commission which is helping identify industries which will match the comparative advantage of different region and set up joint production units in these industrial zones. Just to give you an example, you know, Khyber Pakhtunkha Balochistan Province is full of marble. But unfortunately, the present industry is, you know, extracting marble through using explosive and, you know, almost 200-year-old methods in which they are losing 60 to 70 percent of the value. But, you know, with Chinese assistance, when we set up marble cities, we will be able to use new technology and have greater value. So Chinese investment and technology, Pakistan's low cost of production and location. So these four factors, I think, blend very well to create a winning platform for both countries. So this is going to be, I think, the next most exciting phase on which we are working. Finally, CPAC also has a long-term plan 2030, which is beyond energy infrastructure. It even includes cooperation in areas like agriculture, areas like water resources, management, urban management, social and people-to-people and culture cooperation. So this is quite holistic plan through which we hope that by 2030 we will be able to create a very balanced plan of cooperation beyond just economy but also in social areas. In CPAC, we have identified 11 major nodal connection points. So what this again shows is that these nodal points are going to be the basic fulcrums of connectivity as well as industrialization, and they are spread all over Pakistan. So the benefits of this cooperation will be shared by all regions. The CPAC initial portfolio, which started with the $46 billion, primarily has $35 billion devoted to energy. And let me say that none of this is loaned for government of Pakistan. It is all private investment, IPP investment. Private sector from China is investing in these energy projects and under the energy policy which was there for anyone and everyone. But no one was coming forward because Pakistan needed desperately investment in energy sector. We were having 18 to 20 hours of power shortages and no one was coming. And this energy policy actually offered something like 17% on dollar basis, a very handsome return. And yet people were just putting very high political risk on Pakistan and were shying from taking advantage of this energy policy. But what China did was, I think, very good economic diplomacy. They decided that, yes, we believe in Pakistan and we are taking advantage. We are going there. And this is very attractive policy. So they asked their companies to go and invest in Pakistan. And now they will be making a handsome return, which energy policy was promising to everyone. But on the other side, Pakistan gets much needed foreign investment, which was not coming and is like an oxygen for us. So it is a perfectly win-win situation. So it is about $35 billion portfolio that will come in IPP mode of financing in different energy projects and transmission projects. Secondly, there is about $6 billion concessional loan financing for road sector in which we are constructing, we are upgrading the Karakoram Highway. We are also developing a section of Karachi Lahore Motorway and Multan-Sakhar section of Karachi Lahore Motorway is being constructed through CPAC, while Lahore, Multan and the remaining motorway we are constructing from our own resources. So we are hoping that by 2018-19, we will have state-of-the-art motorway completed from Karachi, which runs up to Peshawar. This is a project which Prime Minister had initiated in 1991, but could not be completed because of political instabilities. But this is going to be again a major road sector infrastructure project, which we hope will become the backbone of our economy. Similarly, Rail Network, initially we agreed for $3.7 billion financing. And we were hoping that we will also get some financing from other multilateral resources. But now China has expressed an interest to increase this $3.7 billion, up to $8 billion, and they want to pick up the entire Karachi-Peshawar section. So this has further increased. And similarly, about $1 billion of project, which are in shape of grant or interest-free loan or concessional loan, which include construction of an airport, an expressway in Gawadar, about 14 kilometers, hospital, educational institution, power plant, reverse osmosis, water, desalination plant, so all different kinds of projects. So all in all, this is about $46 billion portfolio. So normally, people think that Pakistan will be under a lot of debt burden. No. As I mentioned, that $35 billion of this $46 billion is coming as foreign direct investment. Government of Pakistan is not borrowing this money. And whatever has been offered to us as a loan is a very concessional loan with an interest of about 2 percent spread over 20 to 25 years. So we think that with this investment, the economy will be able to grow to a point that it should not be a problem for Pakistan to repay this additional loan. This is the road transport map, which you can see the roads which will be completed or constructed almost cover the entire stretch of Pakistan through north and south. There is a western corridor, there is a central corridor, and there is an eastern corridor, which on top connects with China through Karakoram Highway. Similarly, this is the railway network of CPAC, which will be again completed by 2030. And this also pretty much covers the entire stretch of railway network in Pakistan. And it also links Karachi to not just Peshawar, but beyond Peshawar to Lundi Kotal, Turgham, which is the Afghanistan border point. So we also think that this will provide us an opportunity to link Afghanistan with Pakistan through this modern railway system. So economic benefits of CPAC for Pakistan are that we get a new driving force for economic growth up to 2 to 3 percent growth in GDP. It removes bottlenecks of economic growth, energy, and transport infrastructure. It creates new jobs and employments. Right now, you know, with the first leg of projects that have started, we already see a great boom in our construction industry. I met the steel industry people. They're all busy planning, expansion of their steel factories. I met with cement factory people. They're all upgrading their cement plants. So construction material and construction plant and equipment is now very much in demand. You know, their costs have gone up considerably because so much demand has been created. So when thousands and thousands of people are now working on these projects, which is creating an opportunity there, it gives us energy security, modern transport infrastructure, maritime development. Pakistan has a coastline of almost 1,000 kilometers. And we were not able to take advantage of this coastline, except that we developed Karachi port in the past. Beyond that, nothing really happened much. But we think that with Gawadar emerging as the second major port and also the focus coming on to the Makran coast development with Gawadar, Pakistan will be able to really play an important role in the maritime trade of the region with other ports also eventually developing here. Trade and commerce will develop in the region and within the country. We hope that this will also help us meet our water requirements. Recently, we have also agreed under CPAC that China and Pakistan will work together to develop hydro projects on Indus River, because one of the key challenges we face is in the area of water storages. We want to develop new dams, which will give us water reservoirs, because again, due to climate change, we face great risk of drought if we do not have these new water storage reservoirs. So, we are now working on the Amir Bhashadam, which has a storage of about 6 million acre feet. And we also hope that with the help of China, we should be able to complete it if there is no other financing available. That, again, I think is something where Pakistan has been calling everyone to hold its hand for many years that we need this project and no one has been coming. And now China has shown its inclination that, yes, we appreciate the importance of this project for your future Ford security. And they have agreed in principle to look at ways and means how they can help us find financing for this project through either Asian infrastructure bank or other sources. This will help us develop industrial growth through having supply chains within the country and in the region. It will help promote tourism. We also have provision of developing tourist sites in Pakistan. Pakistan is, again, blessed with tremendous tourism potential. And now Chinese tourists are the number one tourist in the world. Dubai is benefiting from them, all other places are benefiting from them. So we hope that we will be able to develop tourist resorts, special tourist resorts for Chinese tourists in different places. So that will be a major source for us. And then human resource development and know-how. It's not that we are getting Chinese financing. It is not that we are only getting these plants. When our engineers and our managers work with Chinese counterparts, they develop new knowledge. They get new experience in project management. So I think there is a very critical learning for Pakistan in this whole experience that we are able to learn from the experience of Chinese development by working with them on different projects. And now hundreds of Pakistani engineers and managers are either getting training in China or in Pakistan through Chinese experts, which is really, I think, helping us in a big way to improve our know-how and to learn new technologies and new project management skills to do our job better. For China, it opens up West China for them. China-Pakistan Economic Corridor offers the shortest route for Kashgar Economic Zone to do trade and business with outside world. It has about 2,500 kilometer distance to Gwadar Port. Compared to if they have to use Shanghai Port and come into Arabian Sea, they would have to travel about 15,000 kilometers. So it is a very short distance for West China to reach Africa, to reach Middle East, to reach Europe. It mitigates the risk of transportation for China. It gives them an alternate route. And also it helps them address the issue of overproduction capacity and relocation of industry, which they are now very actively looking for alternative locations. I happened to meet in Tianjin, the secretary of the province, and he was telling me that how they had a very big cluster of IT related industry, they were producing all sorts of hardware. But he said that now it is very uncomparative for us and we are relocating most of our industry to either Vietnam and other countries. And we are now moving into research and higher level of IT operations. So this is just one example that how they are now looking at different options. So again, with CPAC, they have an attractive opportunity to relocate their industry to take advantage of the links. It gives them opportunity to trade off commerce, supply chain, energy security. They can also get energy through Middle East in future, if they like, and other economic opportunities. For us, connectivity is what CPAC offers to Pakistan, both regional and national. In terms of regional connectivity, it offers us a platform to connect with Central Asian Republics. Turkmenistan, Uzbekistan, Kyrgyzstan, Tajikistan all have expressed great interest that they want to use Gawadar as their future port of trade. And we are not only working on CPAC, but also CARIC, which is Central Asia Region Economic Cooperation Framework with Asian Development Bank, that will establish two routes from Peshawar to Kabul and Central Asia, another from Kuwaita to Herat and Turkmenistan. So together, these two corridors will help us integrate Central Asia with Pakistan. Iran has expressed great interest that they want to take advantage of CPAC and Gawadar and want to do business with us through CPAC, and we are now also discussing with them to explore the opportunities. Similarly, recently, Deputy Crown Prince of Saudi Arabia visited Pakistan, and he also expressed a great interest that we would like to become an extension of CPAC into Africa and how we can integrate our infrastructure with CPAC to see that how we can find connectivity. The Transport Minister of Russia, I met in Moscow, and they also expressed great interest that we are now looking at Eurasia as the new direction of our trade. And we would also be interested to see that how we can use CPAC infrastructure to do trade with Far East Asia and maybe use Gawadar for trading with many Asian and African countries. European countries recently, Secretary of State of the UK visited Pakistan, and they expressed strong desire to join CPAC. And other European countries are showing interest. So I mean, you know, this is providing us a great platform to engage with all countries in the region and be part of the global supply and trade chains. Within country, as I said, nodal cities are all across Pakistan. It will provide connectivity within the country. It will create rural urban synergy. It will develop new urban centers along the industrial zones that we are hoping to create and logistics and enhanced transport infrastructure in the country. The socioeconomic impact of CPAC is more inclusive development. New areas are opening. And just to give you one example, we have finished recently a 650-kilometer road from Gawadar towards Kuwaita, which has opened thousands of kilometers stretch of Balochistan, where no one ever dreamt of going. And you know, people there for years and years would not travel outside their village to even visit Kuwaita or any other city. And the distance between Gawadar and Kuwaita was almost two days' journey. Now this road, which has been just recently completed, has reduced this journey from two days to eight hours. Now people can go in the morning from Gawadar to Kuwaita and come back, you know, in the late evening. So this is now changing the whole lifestyle of the people, of the remote areas of Balochistan. And this is connecting people also. So this is just one example that how in the remote areas, when we create these logistics or connectivity points, people are now moving, businesses are beginning to go, people are able to bring their produce to the markets, and there is a whole transformation in their lives. We are having cultural exchanges with China. Now the number one most popular language in Pakistan is Chinese language. Everyone is obsessed with learning Chinese language. You know, there are now hundreds and thousands of students from Pakistan in China who are learning Chinese language. And we also say to Chinese that we hope that we can make Urdu the second most popular language in China. So I think this is, you know, also helping us develop more cultural links. We have recently, you know, also agreed to promote cooperation in the field of art and culture to undertake joint production of movies, of dramas, and, you know, do other cultural cooperative ventures that will help us, you know, develop more understanding. Technological innovation, fusion of civilizations, peace, and domestic stability. So I think, you know, I'll just stop here. And in the end, let me say that how, and this is something which you must, I think, recognize that how the story of Pakistan is changing. This is Pakistan of 2013. Newsweek had put us as the most dangerous nation in the world isn't Iraq, it's Pakistan. Sad though, but this was the identity Pakistan carried in 2013. Energy crisis pushing country to the dark ages. This is what is, you know, the finding of Pew. And, you know, you can see the demonstrations, which would say that load shedding has destroyed our business. And this is 2016 and 17. Forbes is saying Pakistan's market leaves India's and China's in the dust. Today, Pakistan's stock market is the best performing stock market in Asia. And just two days ago, Wall Street Journal was saying Pakistan's middle class source as stability returns and consumer spending rockets as poverty shrinks, terrorism drops and democracy holds. Last year, in the history of the country, we had the highest number of domestic tourism, you know, to in places where no one ever dreamt that tourists could ever go. So there were hundreds and hundreds of tourists traveling all of the country. And, you know, it was a great learning for us that what is the potential of tourism in Pakistan. So Pakistan is now coming back. May 20, 2013, Forbes is saying the Islamic Republic of Pakistan, the world's most dangerous nation holds an election. This is 2013. And August 4, 2015, the same Forbes is writing Pakistan, the next Columbia success story. September 12, 2013, IMF says Pakistan at high risk of economic crisis. April 22, 2016, IMF says Pakistan ready to go it alone when program ends. And we have graduated the 36 month IMF program. For the first time, probably in the history, any democratic government has completed an IMF program, met all their conditionalities and as a result have macroeconomic stability, which has come back to Pakistan. Pakistan rating in 2012. Moody's downgrades Pakistan's sovereign credit rating to lowest ever. 2015, 2016. Moody's raises Pakistan's outlook as economy improves under Sharif. And China Pakistan launch economic corridor plan worth 46 billion and all that, you know, they think that Pakistan's political landscape is more stable than that a few years ago, SNP. And the new outlook is based on a strengthening external liquidity position, continued efforts towards fiscal consolidation, and the government's steady progress in achieving structural reforms under the IMF program. So, ladies and gentlemen, CPAC is a game changer for Pakistan and the region. We are ready. Are you ready? Thank you very much. Thank you very much. We're running a little bit late, so we're going to probably take this session to 11.40. I know some of you might have to leave at 11.30, but we'll try to take it to give time for a few extra questions. And I have to say, I was just in Pakistan in December, and I went to Karachi for the first time in a couple years, and it was very striking just the difference in Karachi today from when I was there a couple years ago. But I guess as a peace institute, I think my first question will be related to peace and conflict dynamics. I mean, I think you quite rightly pointed out the impact of Pakistan is at the intersection of these three regions of Central Asia and China and South Asia, and the potential economic benefits of that. However, of course, we have civil war in Afghanistan, which I think reduces the prospects of making the connections to Central Asia. We have the long-standing Indo-Pac conflict, which means the potential for greater regional integration, economic integration in South Asia has been limited. And even CPEC in that role has become controversial. I know, very recently, the Indian Foreign Secretary at the Raisina Dialogue is talking about, you know, that CPEC, the route goes up through disputed territory. I know Pakistan also makes allegations about India taking measures to try to put impediments in the way of CPEC. So I guess my question is, what can be done to try to ensure that CPEC actually does realize this potential of connectivity? Because I've struck in a lot of your diagrams and pictures, the routes are all north-south. You rarely mentioned India, but a billion people in India and economic growth there, that's where the real potential, I think, both for China and Pakistan would be. So I was wondering if you could comment on that. Yeah, I totally agree with you. And our vision of CPEC is not exclusive. It is inclusive. And we think that CPEC well fully realizes potential if South Asia as a region benefits from CPEC. And let me also say that when President Xi visited Pakistan, in his address to the parliament, he made a particular reference for at least three minutes that how CPEC is useful for South Asia. So he also articulated a very inclusive vision. But somehow, you know, we have been, the prime minister of Pakistan is a strong advocate of peace in the region. We have very actively pursued peace with Afghanistan and India and continue to do so because we think that our development depends upon peace in the region. But I think, you know, there is a little issue that in Pakistan since 93, I don't remember any election where any leadership has shown any sensitivity towards doing India bashing in order to get some extra votes in elections. I mean, in our elections, India is not a factor. Nobody speaks about India. Nobody does any India bashing. But somehow we feel that the electoral dynamics in India are still quite sensitive to Pakistan bashing. So whenever you have, you know, electoral process in India, the government takes a certain hawkish position towards Pakistan. So we are hoping that by March, these state elections will be over. And maybe then there will be a better environment to pursue peace talks with India. But we are totally committed. And I think the Indian reaction you mentioned is a knee-jerk reaction. Now, think tanks and experts in India are beginning to write articles that our government is taking wrong position. It should instead start looking at opportunities which CPAC is bringing for regional cooperation. So instead of opposing CPAC, it should now join CPAC and look at different opportunities. Because if you look at CPAC, probably this offers to India shortest land route to do trade with most of China also. And what you also have to see that in China, they have now developed extensive road and rail links with West China. So, you know, if you are even doing trade through CPAC, you can reach out to any destination in China from this area. So we are very hopeful and we continue to work to normalize our relations with India. With Afghanistan, we have new beginning. Recently, the Army Chief, the new Army Chief had two telephonic conversations with President of Afghanistan. And Afghanistan has expressed also its desire that they want to improve connectivity. We are working on a project to have a motorway from Peshawar to Kabul. Similarly, as I said, that we have this rail link up to Lundi Kotal, which is the border point with Afghanistan from Peshawar. And we are also looking at a project to link this Lundi Kotal to Kabul. So I think if these road and rail links come in, they will greatly help to normalize the relationships. The best way to bring peace is to bring connectivity, to bring trade, to promote business. I think economy is the best driver of peace. And if we have more regional cooperation, we can probably have better basis of peace in the region. And I hope that, you know, with India, we should be able to also start and resume our process of dialogue. I mean, I just failed to understand that, you know, by not having talks, who are we helping? I mean, we are just actually helping the extremists. They win if Pakistan and India are not talking. So we need to pursue a path of dialogue and normalization, because South Asia is missing the most amongst all regions of the world, because it is the least regionally integrated region. Are you hopeful that regional trade talks with India will get going? Yeah, we certainly look forward to starting our talks with India. And I think after March, when there are nine or seven state elections are over, probably we should be resuming some kind of dialogue. This is a bit unfortunate that they take, you know, strong positions along their electoral cycle. And I think we should be mature enough to think beyond that both India and Pakistan have to live together. We cannot change our geography. And we must now think in terms of peace. Bringing it back to Pakistan, I mean, I think, and I've been involved in several sort of Track 1.5, Track 2, Dialogues with Chinese and talking to various Chinese and officials and academics, often you get the sense that the very strong belief in the economic growth is the key to stability. And that's certainly, I think, a model that they feel worked well in China. And so assumptions that could be the model also for a place like Pakistan. However, we also know that resources can be a cause of conflict and not just stability. And so already in Pakistan, you are seeing, you know, complaints from some of the smaller provinces about the benefits. So I was wondering what steps can be done to ensure the growth is inclusive in Pakistan? I think we have tried, but unfortunately, the voice of dissent mainly came from one province, which was KP. And that actually was because for first two years, the KP government was not working with the federal government. I mean, they were in agitation mode and they were on sidelines. But we have gone extra mile to bring them back. And recently, on 29th December in the last JCC meeting, we had all the chief ministers participate in this dialogue. And we also took the demands of the provinces to this Joint Coordination Committee. And almost all of their major demands were included in the CPAC. For example, we have agreed to support a rail-based mass transit project in every provincial capital. So that means that, you know, Karachi, which did not have a circular railway or a mass transit rail-based project will now have, you know, traditionally, it was supposed to be done by Jaika. But for many years, they were not doing it. But now, China has agreed to finance that project. So they are very happy. Similarly, in Sindh, one of their major demands was to develop KT Bandar seaport for the third coal deposits. So that has also been included in CPAC projects. KP province had some demands for their energy hydro projects, as well as some road infrastructure project. So we have this, you know, Chitral to Gilgit, to Shandur, to Chakdara Road, which sort of opens the west KP area that has been included in CPAC portfolio. They are very happy. Similarly, Balochistan has major problem with water. So we have a major water project which goes from Patfieder Canal to Quetta City, because Balochistan has a serious water issue. So similarly, certain other projects. So now, all provinces are very happy that everyone has their dream projects in CPAC. So it has become that way quite inclusive. Okay, we'll open up for questions. We are webcasting it. So please ask for a microphone, wait till you get it, and give your name and identification. But please keep it to short questions or comments so that we can get as many as possible. The gentleman here. Yes, Bill Jones from Executive Intelligence Review. Mr. Minister, I'd like to ask you about the rail projects. Obviously, these are extremely important, more long term because of the topology in Pakistan. Have you also talked at all about the possibility of high speed rail, which the Chinese are doing, you know, extensively in terms of your project? And secondly, on energy, what is the role of nuclear energy now? I understand there's one plan being worked on now. In the long term, how do you see a nuclear playing a role in Pakistan development? Certainly, railway infrastructure, in the first phase, trying to modernize the existing infrastructure. Then we will expand the railways infrastructure to the west side to connect Gawadar with the western parts of the country. But certainly, fast speed train is part of the agenda, and we think that it will come in the long term, maybe by 2030, because right now we have to fix our existing railway infrastructure, which is almost in shambles. Nuclear energy is also an important element of our nuclear energy mix. We already have some nuclear power plants, which are part of our portfolio. But as you know that, you know, it has also its limitations because it is very capital intensive. You need upfront resources. So in the short to medium term, we are mainly focusing on idle coal and renewable energy projects. But there are a number of civil nuclear power projects on which we have worked with China. And there is one 2200 megawatt plant, which we are developing in Karachi, close to Karachi. But it is out at CPAC. It is not part of CPAC. There's one in the back. Yeah, the back corner there. Hi, Hamza Tariq from Pakistan. I'm interning at the Hudson Institute, studying at LSE. So in October, the State Bank of Pakistan released a report that Pakistan received an inflows from China, 1.1 billion off loans and FDI. However, 700 million of this was a commercial loan to be repaired on commercial terms to the Chinese Development Bank. At the same time, Pakistan has taken a lot of sovereign guarantees for domestic companies in terms of loan repayment. I guess my question is echoing IMF concerns. What will be the effect on Pakistan's external sector in the long term because of CPAC? Thank you. You know, first of all, let me say that whether it is IMF, whether it's standard and poor, whether it is Moody's, no one has any problems with Pakistan's ability to pay back what we have borrowed. And you must have seen recently Finance Minister's article also in which he explained that how we are well within our range. You see, if you look at the debt to GDP ratio from 2013 to 2016, that is not deteriorated. Instead, we are hoping that in coming years it will improve. As your GDP grows, your ability to borrow also grows. And the other thing is, it is the quality of borrowing. You know, for example, if you are General Motors, we are ford, you want to expand. There are very few companies in the world who expand from their own equity. Everyone borrows. The point is that whether that is a productive borrowing or that is an unproductive borrowing. If you are borrowing to improve infrastructure, which will help you to improve your growth rate, which will help you to improve the capacity of your economy to grow more, then there's no problem with it. So whatever liabilities we have, they are well within the capacity of Pakistan to pay back. Unfortunately, there is a politician in Pakistan who sees fault in every good that is happening to Pakistan, and they try to create narratives which sometimes, you know, give people undue worries. So there are no worries. I mean, I will be concerned if debt to GDP ratio of Pakistan was going out of control. We were like 63. something in 2013, and we are about, say, the same in 2016. And in coming years, we are actually hoping to bring it down to less than 60 percent. So as long as our debt to GDP ratio is in control, our economy is growing. We have come to five and a half percent. We hope that in a couple of years, we should be going beyond 6 percent. So I think we should be able to handle all this. And as I said, none of the energy investment is government borrowing. It is private sector borrowing. Whatever commercial borrowing has taken place, that is private sector. Chinese companies who have borrowed from China Development Bank or whosoever, we will buy energy from them, and they will pay back their loans. That's not our, you know, liability. The gentleman is very back. Hi. My name is Mohammad Ali. I'm teaching here at GW in George Washington, but I write also for the express tribune in Pakistan. And my question is also kind of security-related, but from a larger geostrategic perspective. And I was wondering, given the situation in the South China Sea, you know, in Chinese interest and the current political climate, is, are we also cognizant of, you know, those developments and, you know, the irony of Russia now, you know, being allowed to come to, you know, the Arabian Sea several decades later? And, I mean, is this, or are we purely envisioning this as an economic opportunity? For us, this is purely an economic opportunity. I think Pakistan and history has enjoyed a place where it was a meeting place of different civilizations. We are the place of Moinjodaro. We are the place of Harappa. We are the place of Gandhara civilization. And I think thousands of years later, we are again getting an opportunity where we can be the meeting place of different people, different countries, to be part of the old silk route, which once passed through our country. So China, Pakistan, economic corridor, I think for us, is important from only one point. For 67, 70 years, we have only learned to play geopolitical games in the region. I think it's about time that we change the geopolitical paradigm to geoeconomic paradigm. So Pakistan has an advantage. It could either be part of geopolitical theaters, as we were in the past, that did not bring us any positive value. I think now we should try to be part of the geoeconomics and be a place where people can come, they can do trade. And if we can develop Pakistan as a hub of trade, commerce, manufacturing, to service this one large market, for example, look at Pakistan, 200 million population, sixth most populous country, about 60 to 80 million middle class, add to it the Central Asia Afghanistan, about 350 million, another 10 to 15 million middle class. So we are talking about, you know, 80 to 90 million middle class in West Asia or this region, leave out India for a moment. All of them want to have iPhone 7. All of them want to have luxuries of life. All of them want to have good, you know, lifestyle. It's a huge, huge, huge market. That is why with CPAC, as it has improved, what have we seen? A Dutch company is now acquiring a food company in Pakistan for $440 million. Renalt is coming to set up an auto plant in Pakistan. So now we are beginning to see that all that economic activity is actually going beyond China, but also attracting investors from Europe and elsewhere. And that is, we would also like to see that, you know, United States and companies in United States should also look at opportunities, which will come to that part of region with this new infrastructure that will help us stabilize that region. I mean, we needed these investments so badly to stabilize our economy that they were an issue of life and death for us. So now this investment is bringing stability. It is bringing prospects for growth. And it is also creating a large canvas of a middle class market in that region. So there are opportunities. And therefore, I said, we are ready. Are you ready? One from Taha. Taha, independent consultant. Just going back to the energy question. So you have $35 billion of energy investment going into Pakistan on the generation side and also on the transmission side. But of course, all of that energy has to flow through Pakistan's distribution companies. And from media reports, it sounds like seven of the nine Pakistani distribution companies are in a loss. So that is going to create some kind of financial liabilities for the government of Pakistan. So one, how are you going to deal with that? Number two, are there going to be talks of perhaps entering back into an IMF program, which previously had pushed for the privatization of those distribution companies, which may have lent some fiscal stability to the system? I mean, that is an important challenge because Pakistan did not just face the power generation challenge. We also faced transmission and distribution challenges. There was no investment in these sectors for the last 15 years. So if today, by magic, we have another 5,000, 7,000 megawatt energy to meet our demand, there is no way that we can transmit it across the country and distribute it. So therefore, simultaneously, we are working on two transmission projects, North-South. One is Matiari to Lahore. Another is Matiari to Faisalabad. This will provide us a backbone for South to North evacuation of power. Along with this, we are now also working on modernizing the disk capacity of the discourse. We were committed and we are committed to privatization of discourse. But unfortunately, those two years when we had agitation in Pakistan, they really affected us very adversely because there was a lull in the economy. We could not do the transactions, the government's attention got diverted, and we lost very important time for undertaking these transactions. But now we are at a point that for the next two years, we have 10,000 megawatt energy coming. If we go into privatization mode, that will mean that for six months or so, we cannot do anything from our side. And the new partner who will buy these discourse will take another six to eight months to understand the whole company and to start their investment plans. So if we miss out one year on this investment plan for upgrading the discourse, we would not be able to distribute the new electricity that is going to come into the system. So now we are stuck that by 2018, we must make the necessary investments. We have recently approved project for two discourse for smart metering. So we are now undertaking these new interventions which are technology-based. In last two years, due to reform of discourse, the theft and the leakage has been drastically reduced in discourse. So we are undertaking institutional reform. We are trying to bring better corporate governance within discourse and also bringing in new technology in form of smart metering and efficient systems to cut down those losses. So I think we should be able to do well. But after the elections, after 2018, we will be ready to undertake this privatization. And I think with this improvement, they will fetch us better price also. How much additional power will be online before the election? About 10,000 megawatts. I'm afraid we've run out of time. Sorry that we did those other questions. But I'd like to thank all of you for coming and please join me in thanking Minister Iqbal for joining us today.