10 years of CPEC: successes, challenges and opportunities

Pakistan and China have kick-started celebrations of 10 years of China-Pakistan Economic Corridor (CPEC). The Joint Cooperation Committee held an important meeting to deliberate on the future programmes. Both the countries agreed to give a new impetus to implementation of the second phase of CPEC.

It’s the right time to analyse the decade of CPEC and find what CPEC has achieved, and what the challenges are. It will help Pakistan draw lessons and improve implementation.

Let’s start with the success stories. There is no second opinion that CPEC-related benefits are multifaceted. The first phase of CPEC helped Pakistan overcome numerous challenges and create opportunities for common people. First, CPEC helped create 192,000 direct jobs. The jobs are distributed among all the segments of society. Indirect jobs are even more, as more than 100 SMEs benefited directly from the CPEC.

Second, Pakistan-China completed Gwadar Port. It opened new avenues of connectivity and business. It has the potential to turn Pakistan into a connectivity hub if supported by the right set of policies. Central Asian States already have shown keen interest in using Gwadar Port.

Moreover, the free economic zone at Gwadar is attracting investors. Gwadar airport is another big project which will help convert the port into a connectivity hub.

Third, transportation infrastructure improved tremendously after it deteriorated due to NATO supply. Before, CPEC Pakistan was looking for an investment of $1.2 billion to rehabilitate infrastructure. The CPEC not only helped overcome this challenge, but also helped build 510km of new highways.

Fourth, CPEC assisted Pakistan manage loadshedding and losses in the energy sector. Chinese companies, in cooperation with Pakistani institutions, launched a series of energy projects. It is satisfactory to note Sahiwal Coal Power, Port Qasim, HUBCO etc. have been completed. Renewable energy projects, including Hydro China Dawood Wind Farm, Quaid-e-Azam Solar Park, UEP Wind Farm, Three Gorges Second, Karot Hydropower, Suki Kinari Hydropower etc., were launched under CPEC. Karot Hydropower has already started generating electricity. It will provide cheap electricity and reduce GHG emissions by 3.5 Mt on annual basis. It will bring down import bill, which will be helpful in managing foreign reserves and circular debt. Moreover, CPEC projects helped erect 886km transmission line.

Besides, Chinese companies invested in social development and environmental projects through corporate social responsibility and other programmes. For example, Chinese Overseas Port Holding Company (COPHC), China Power, State Grid Cooperation of China, etc. are investing in corporate social responsibility in Pakistan.

These are a few examples, we can find many more.

However, these success stories are below the potential of CPEC. Pakistan could multiply benefits. China offered innovative programmes, but Pakistan could not benefit from them fully. The question is why it could not do so? There can be many, but the following reasons acted as a major stumbling block.

First, no chain of command exists. Rather, there is a tug-of-war among ministers and departments. Every ministry or department presents itself champion of CPEC without realising implementation of framework is important. On the other hand, the 18th Amendment has introduced new challenges, weakening further the chain of command.

Second, the institutional framework is complicated. It makes the business environment unfriendly, which discourages investment. Even registering a company takes many days and the applicant has to deal with numerous departments. If the applicant is a foreigner, he has to go the extra mile.

Third, buck-passing is a favourite game of Pakistani bureaucracy, which they play in such a way that no one questions them.

Fourth, lip service is our national game. Talk to any person, educated or uneducated, he will tell you the solution of every problem in the world. Then the question is why Pakistan is facing problems? The answer is simple – we love to talk and do not take action. This attitude at all levels impacting the implementation of CPEC.

Fifth, security is another concern hampering smooth implementation of the second phase. The security apparatus was excellent during the first phase of CPEC. However, dynamics of the second phase are entirely different.

There is a need of a new frame work of security with focus on enhanced role of policy.

In this backdrop, if Pakistan wants to fully exploit the potential of CPEC, it will have to change. For that purpose, the best way would be to create a centralised body like CPEC Authority. The body must have the power to implement the decisions that it took.

The new body should also have the authority to offer services and collect taxes. The head of the body should be given status of a federal minister, only answerable to the prime minister. Moreover, Pakistan can create a national CPEC council by engaging political parties, institutions like army and chief ministers of provinces to provide guidance. It will help Pakistan exploit full potential of CPEC.