There is not a single day when the China Pakistan Economic Corridor (CPEC) is not a subject of widespread coverage in the print media. There are news and opinions on the pros and cons of the CPEC, expressing jubilation and caution on the subject. The majority of analysts believes that the CPEC is the best thing that has ever happened to Pakistan while some argue that the mega project has compromised Pakistan’s sovereignty, burdened the nation with unprecedented loans, led to nation’s diplomatic isolation. The latter category of analysts also argues that the CPEC will lead to flood the country with cheap Chinese goods at the expense of local industry.
The truth lies somewhere in the middle. The CPEC is indeed critical to Pakistan’s political and economic viability in these times of belligerence the country is facing on its borders and the changing global political and economic dynamics. The nation needs something strong to cling on to and there is no better option than China which is now world’s major economic and political power. Pakistan, in the state of CPEC euphoria, however, appears to have forgotten its traditional partners such as Europe, the US, Japan and others. These countries have for decades supported Pakistan’s economic growth, specially during its infancy, through soft loans, grants, foreign direct investments, transfer of technology, intellectual support and similar.
Over the last many years, the enthusiasm of these countries appears to have dwindled. Some of the multinational companies from these countries have left Pakistan while many other have scaled down their operations. Multinational companies argue that Pakistan no longer offers them a level playing field. According to them, Pakistan’s policies are skewed in favour of Chinese contractors and products.
It is reported that Gallup Pakistan has said that the China Pakistan Economic Corridor (CPEC) should also be evaluated in light of the country’s relations with the rest of the world and if not ably aligned with utmost precision, the CPEC might hamper Pakistan’s relations with western countries which have time and again come to the country’s rescue in times of need.
It is further argued that “the CPEC should be beneficial for everyone, which is why its pros and cons should be monitored and handled carefully. Some circles have reservations about the project and one of them is that Pakistan would be isolated from the west. This aspect requires special focus from our policymakers as we cannot afford subpar relations with those countries that have remained significant for aid and trade.”
It is reported that in 2008 Pakistan’s trade with China was 11% of its total trade, which soared to 29% as of 2015. The gap created on account of shying away of western partners appears to have been bridged by China.
Market diversification is good but putting all eggs in one basket could be fatal. It is reported that Lahore Chamber of Commerce and Industry (LCCI) President Abdul Basit has said that the CPEC as a game changer is becoming a strong reality since it is gaining attention of the entire world.
“The project would usher in a revolution in the areas of physical infrastructure, energy and human resources. It will also help Pakistan in technological advancement and improve the region’s connectivity system,” he said.
The LCCI president urged local manufacturers to invest in CPEC-related projects. “Projects like this have the capacity to stimulate the local economy by increasing the demand for local-manufactured goods,” he said. “Such an increase in demand will not only allow full utilisation of the existing manufacturing potential, but will also encourage manufacturers to increase their capacity,” according to him.
The CPEC is no doubt China – Pakistan centric but is reported to have encouraged other countries to join in and many countries from Europe, Russia and Central Asia have expressed interest to join this historic project.
The Silk Road Economic Belt and the 21st Century Maritime Silk Road, also known as The Belt and Road initiative, is a developmental strategy proposed by Chinese President Xi Jinping that focuses on connectivity and co-operation between China and the rest of Eurasia. It consists of two main components – the land based ‘Silk Road Economic Belt (SREB)’ and ocean-going ‘Maritime Silk Road (MSR)’. The strategy underlines China’s push to take a bigger role in global affairs and its need for priority capacity co-operation.
The coverage area of the initiative is Asia and Europe encompassing 60 countries. Oceania and East Africa also included. The anticipated cumulative investment is a staggering US$ 4-8 trillion.
Through the CPEC, which is the backbone of China’s ambitions, Pakistan is well positioned and part of this ambitious plan of economic and political globalisation. Pakistan through the CPEC, in particular, must reach out to the West to gain diplomatic, political and economic mileage out of the given opportunities. The US, the UK and Europe are the largest foreign direct investors in Pakistan. They have historic, social and business ties with Pakistan and the whole of Asia where their impressive footprints in culture, social sector and business segments are visible. Above all, there exist great people-to-people contacts.
The CPEC’s initial phase includes over $35 billion investments in Pakistan’s power sector and over $10 billion investments in infrastructure projects. Moreover, 29 Special Economic Zones – to spur industrial and commercial activities – will be established all over Pakistan in the proximity of the corridor. China, under a long-term lease, is developing Pakistan’s Gwadar Port and a container terminal and an economic zone in its proximity.
All projects and Special Economic Zones under the CPEC are open for investments, supplies, contracting and services to all countries offering opportunities in power sector, oil and gas, mines and minerals, industry, small and medium industry, healthcare sector, education, service and hospitality industry, engineering-consultancy-construction services and others.
Pakistan is blessed with abundant natural resources and a vast domestic market and a willing workforce but we need to put our act together to move on with greater speed. There can be no better opportunity to do so than the CPEC which offers us incentives to put our house in order. The nation has missed many opportunities but missing this out is not an option.Farhat Ali, "CPEC for all," Business Recorder. 2017-03-18.
Keywords: Economics , Economic development , Diplomatic relations , Manufacturing industries , International trade , Small Business , Natural resources , Loans , Investments , China , Pakistan , CPEC , LCCI , SREB , MSR