Be prepared

The CPEC project has been in the  pipeline for some time. The 50 billion  dollar project, mainly financed  by the Chinese banks, aims at improving  Pakistan’s economic outlook  by helping the country to upgrade  its existing infrastructure.  The project will help the country invest  in new projects mainly pertaining  to the energy sector. Air, road  and sea connectivity will be enhanced  and the county is expected  to become a lucrative market for  foreign direct investment.  However, the country needs to  be wary of the multi-billion project.  In the past, the country has been  unsuccessful in maintaining a positive  trade balance with countries it  has signed an agreement with. With  the exception of Sri Lanka, Pakistan  has faced constant trade  deficits with China, Malaysia, Iran  and Indonesia. Our trade deficit  with China amounted to $9.84 billion  in 2015. CPEC will most likely  add to this deficit since the country  will have a huge amount of loan to  pay back. Our current account will  shrink because profits will be  utilised for debt repayment. In addition,  Pakistan has formed a special  security division for CPEC projects  to provide security to the CPEC-related  projects. This will put added  pressure on the already strained  government budget. It is essential  that the government formulates a  strong policy to cater to these concerns  before it is too late.  Nida Anser  Mirpur Azad Kashmir