Pakistan can attain 8-10pc growth rate over next 30 years 

Chinese professor says the entire area can benefit from the Corridor

Islamabad

Outlining six major steps for maximising benefits of China-Pakistan Economic Corridor (CPEC), the visiting distinguished Chinese Economist Professor Justin Yifu Lin said that if Pakistan captures the opportunity, its economic growth could touch the range of 8 to 10 percent for next 30 years or more for joining middle income or even higher income group of countries.

“Pakistan possesses a golden opportunity for doing industrialisation in the context of CPEC but the country will have to align its policies to attract light machine industry for relocation purposes from China as incentives on papers will not work. Islamabad will have to ensure comparative advantages and taking care of reducing the transaction cost for reaping benefits of industrial cooperation under the CPEC initiatives,” the visiting Chinese Economist, Justin Yifu Lin, who is Councilor of State Council and Chairman of Federation of Industries said here at the Planning Commission (PC) Auditorium on the special invitation of Minister of Planning Ahsan Iqbal on Tuesday.

The visiting Professor who is author of 24 books and serves into the World Bank as Chief Economist and Vice President as well as in China’s Peiking University delivered lecture titled “How to deliver dynamic growth by Pakistan” said that the political stability, continuity and consistency in policies were required for achieving higher growth momentum.

He said that Pakistan should focus on two factors including import substitution and export diversification for increasing its benefits. 

Pakistan, he said, would have to move from agro based economy to industrialisation for accelerating economic activities. However, he argued that this structural transformation would not happen spontaneously so the government would have to ensure industrial up gradation for maximising benefits.

He said that a new industrial policy was required to transform the economy in order to ensure infrastructure of hardcore and soft core development. Most developing countries, he said, failed to achieve the desired results despite unveiling industrial policy because they remained unable to ensure comparative advantages which lead to misallocation of resources and end up with corruption and rent seeking.

He said that Pakistan’s per capita income in terms of GDP was less than 30 percent compared with China’s three decades back but now Beijing was ahead more than 5.5 times. 

He outlined six major steps as pre-requisites to ensure industrialisation in the country and said that the first step would be achieving higher growth trajectory by transforming the structure of the economy and the second step would be placing upgrading the infrastructure. Third required step would be inviting foreign direct investment where there is comparative advantage and fourth step will be scaling up private innovations.

Citing example of India, he said that IT sector was promoted in India during the last few decades and it proved itself globally. Under fifth step, he said the industry could be used to overcome barrier to entry, attracting FDI and establishing industrial clusters. The sixth required step will be providing tax incentives, direct credits for investment and access to foreign exchange.

Answering a query regarding slowdown of economic growth being faced by China, the visiting Professor said that although the growth had slashed down from 10.6 percent to 6.7 percent in recent years but it was still in the higher trajectory compared to many other parts of the world. Citing examples of Ethiopia, he said that Chinese manufacturer invested in shoe making industry and now became the biggest industry of that country within few years period.

Federal Minister for Planning Ahsan Iqbal said on the occasion that Chinese did not consider Pakistan as competitor but Pakistani businesses would have to ensure right kind of linkages to maximise their benefits.

Citing example, he said that China used to import $1.3 trillion worth of goods on annual basis so there was a lot of work which needs to be done for increasing our share in trade with China.

He said that 85 million jobs would be relocated from China and these industries could be relocated anywhere and Pakistan could become their destination if government, private sector and academia joined hands to enhance our share for mutual prosperity.

“The CPEC will bring prosperity for this whole region where 1.3 billion people inhabit and if we all join hands then Pakistan can touch growth of 8 to 10 percent over next 30 years and can become part of developed comity of nations by 2025 and 2047,” he concluded.