Iran’s efforts to become part of China-Pakistan initiatives for cooperation and development was the top news of this week. A group of different political parties and civil society organizations has opposed the meeting of All Parties Conference (APC) on the China-Pakistan Economic Corridor (CPEC). A top Iranian official has hinted at the formation of four-nation alliance against the backdrop of regional and international developments. The Federal Board of Revenue (FBR) has devised a plan to prevent the misuse of duty and tax concessions granted on import of goods for the CPEC projects. A top military official has sought that the fiber optic cables be laid down along the CPEC route for the security reasons.

Iran’s Interest in CPEC:

Iran has reiterated its interest in joining the CPEC. The country’s envoy to Islamabad, Mehdi Honordoost, said “Iran is ready to join CPEC with full capabilities, possibilities and abilities.”[1] He reckoned that Iran’s rich energy resources, well developed transport infrastructure and progress in other fields would contribute to the functioning of the corridor. As for Tehran’s amity with New Delhi – a country that has categorically opposed CPEC – is concerned, Honordoost downplayed this factor and noted that “[I]t is not important if some country is not keen to join it.” It is not the first time Iran has shown keen interest to be part of this multi-billion project. In September last, Iranian President Hassan Rouhani had expressed the desire to Pakistani Prime Minister Nawaz Sharif. China also had also welcomed Iran’s interest. However, Pakistan seems to be dragging its feet on all of Iran’s positive postures. Islamabad has been wary of Iran’s relations with India and has shown greater inclination towards Saudi Arabia – a staunch rival of Iran. Hence, in the foreseeable future, there is a lesser prospect for Iran’s joining the project.

APC Opposed:

A group of different political parties and civil society organizations, Corridor Front, has said that another all-parties conference would deprive Khyber Pakhtunkhwa (KP) of its due share in CPEC. The convener of the group Dr. Said Alam Mehsud noted that Chief Minister Pervez Khattak had proposed around nine projects in the last Joint Cooperation Committee (JCC) meeting in Beijing but he couldn’t get approval even for a single project.[2] Mehsud pointed out that other provinces got their demands accepted in the meeting but KP’s chief minister failed even to arrange a presentation for raising demands. On the other hand, the spokesman of Awami National Party, Zahid Khan, has also urged the central government to remove KP’s reservations over the western route.[3] But in contrast, the KP government has shown satisfaction with the sixth JCC meeting. KP has blamed the central government for neglecting the western route and other projects allocated to the province under CPEC. It seems that unless the western route is properly developed, grievances will emanate from KP from time to time.

Iran Keen on Joining Pakistan-Russia-China Alliance:

The head of Iran’s Parliamentary committee on national security and foreign policy Alaeddin Boroujerdi has hinted the formation of four-nation alliance against the backdrop of regional and international developments.[4] He was of the opinion that due to changing situation, Pakistan, Russia, China and Iran should cooperate mutually for regional peace and stability. Few weeks ago, some media sources had reported that Pakistan, China and Russia might invite Iran to join the discussions on Afghanistan. During the three days visit, Boroujerdi held talks with Prime Minister’s Advisor on Foreign Affairs Sartaj Aziz and National Security Advisor Nasser Khan Janjua. Since the coming of Hasan Rouhani into office as President, Iran has been showing keen interest in improving relations and increasing cooperation with Pakistan. Islamabad has yet to reciprocate the thaw shown by Tehran.

Preventing Misuse of Tax Concessions for CPEC Imports:

The FBR has devised a plan to prevent the misuse of duty and tax concessions granted on import of goods for the CPEC projects.[5] A custom official told The News International that “[T]he foolproof plan will ensure that only genuine importers will get concessions and exemptions granted by the FBR.” The step was adopted to preempt the repetition of a lapse from the past. As a result of such loopholes in Afghan-Pakistan Transit Trade Agreement, goods were imported illegally from Afghanistan that costed millions of rupees to the national exchequer. The plan has also another potential merits. Massive machinery will be imported from China for CPEC projects. Pakistan already runs a massive trade deficit of more than $6 billion with China and such precautionary measures become all the more important to avoid excessive imbalance between the country’s imports and exports.

Miscellaneous:

A top military official has sought that the fiber optic cables be laid down along the CPEC route for the security reasons.[6] PM Nawaz Sharif has said that China and Pakistan are now bonded through ever strong friendship.[7] The Capital Development Authority has requested the government to include the Ghazi Barotha project in CPEC.[8] The government has granted two tracts of land of 175 acres each to a Chinese company for Matiari-Lahore power transmission project.[9] The chief of Frontier Corps Balochistan has said that the paramilitary force is ready to foil designs against CPEC.[10]

This report is compiled and written by Abdur Rehman Shah, Research Associate at the Center for Research and Security Studies (CRSS), Islamabad.

[1] Staff Reporter/ (2017, January 27). Iran keen to join CPEC. Retrieved January 27, 2017, from http://epaper.dawn.com/DetailNews.php?StoryText=27_01_2017_005_007

[2] Bureau Report. (2017, January 24). Another all-party conference on CPEC opposed. Retrieved January 29, 2017, from https://www.dawn.com/news/1310394/another-all-party-conference-on-cpec-opposed

[3] Our Correspondent. (2017, January 29). Centre asked to remove reservations on CPEC route. Retrieved January 30, 2017, from http://www.dawn.com/news/1311353/centre-asked-to-remove-reservations-on-cpec-route

[4] Yousaf, Kamran. (2017, January 28). Iran hints at joining Pakistan-Russia-China alliance. Retrieved January 30, 2017, from http://tribune.com.pk/story/1309224/pakistan-russia-china-iran-hints-joining-tri-nation-alliance/

[5] Akhtar, Shahnawaz. (2017, January 29). FBR to prevent misuse of tax concessions for CPEC imports. Retrieved January 30, 2017, from https://www.thenews.com.pk/print/182393-FBR-to-prevent-misuse-of-tax-concessions-for-CPEC-imports

[6] Shahid, Jamal. (2017, January 25). Retrieved January 30, 2017, from http://epaper.dawn.com/DetailNews.php?StoryText=25_01_2017_151_006

[7] Xinhua. (2017, January 29). PM hails Pakistan-China friendship, CPEC. Retrieved January 30, 2017, from http://www.china.org.cn/world/2017-01/29/content_40193930.htm

[8] Abbasi, K. (2017, January 28). CDA wants Ghazi Barotha water supply project to be included in CPEC. Retrieved January 30, 2017, from http://www.dawn.com/news/1311198/cda-wants-ghazi-barotha-water-supply-project-to-be-included-in-cpec

[9] ANI. (2017, January 23). Pakistan provides Chinese firm with two tracts of land for CPEC power project. Retrieved January 30, 2017, from http://www.hindustantimes.com/world-news/pakistan-provides-chinese-firm-with-two-tracts-of-land-for-cpec-power-project/story-JA4sCxcP34GTEXyvcz9WYL.html

[10] Rana, Aamir Ilyas. (2017, January 25). ‘FC ready to foil enemies’ designs against CPEC’. Retrieved January 30, 2017, from http://tribune.com.pk/story/1306935/fc-ready-foil-enemies-designs-cpec/