Tuesday September 27, 2022

Door to development

September 02, 2018

In my previous column, ‘Europe and the BRI’ (August 26) I had mentioned that the UN has also welcomed the Belt and Road Initiative (BRI) by stating that “there are myriad synergies and linkages between the BRI and the Sustainable Development Goals (SDGs)”.

It has argued that several of the SDGs are directly or indirectly linked to Chinese-led investments and the UN expects BRI to be a potential “accelerator and an effective vehicle” to achieve Agenda 2030 and help in advancing several SDGs in participating countries. It is estimated that an aggregate of between $3.3 trillion and $4.5 trillion are required annually to implement the 2030 Agenda and achieve the SDGs.

Hence, there is a need for unprecedented financial and non-financial means, particularly in developing countries that lack sufficient domestic resources, to enable them to make progress in terms of the 2030 Agenda, as agreed upon by all UN member states in 2015 at the 70th UN General Assembly (UNGA).

As in numerous other developing countries, generating sufficient financial resources to spur economic development has also remained a key constraint in the case of Pakistan. If BRI offers an opportunity for many participating countries, its key artery in the form of CPEC also offers prospects for Pakistan, provided various externalities – such as social and environmental concerns and long-term debt and financial obligations – are adequately addressed.

There is no doubt that various streams of financing under CPEC offer the country ample opportunity to plug the gap, and boost economic growth and sustainable development. Pakistan is an instructive case for various reasons. It was the first country to embrace the 2030 Agenda through a unanimous parliamentary resolution in February 2016. Similarly, Pakistan’s own key development goals, as identified in the Vision 2025, are also closely aligned with the SDGs.

Unfortunately, during most of the 15-year period of the Millennium Development Goals (MDGs) framework, Pakistan faced numerous challenges that compounded the country’s problems and made the implementation of the MDGs impossible. Among these, the biggest challenge was terrorism and the deteriorating law and order situation, which essentially left Pakistan in a state of war.

In terms of financial damages, the war has cost Pakistan over $126 billion as it has affected the country’s exports, led to a reduction in the inflows of foreign investment, caused massive additional security spending on numerous military operations, affected the tourism industry, damaged physical infrastructure, and resulted in the displacement of thousands of people from conflict-affected areas.

During this period, Pakistan was also severely affected by natural disasters. The 2005 Kashmir earthquake resulted in the loss of over 73,000 people while its financial cost was “estimated at approximately $5.2 billion”. Similarly, the 2010 floods inflicted “damage of $10 billion on the country’s economic structure”. Due to all these human-induced and natural calamities, the main focus of the government has been on relief and recovery, which greatly hampered the country’s progress on the MDGs.

Now, the law and order situation has considerably improved during the last several years and there are also signs of political stability as two successive democratically-elected governments completed their tenures, despite the fact that the last regime was entangled and crippled by various domestic upheavals.

The new government must fully focus on exploring avenues to enable the country to make tangible progress towards achieving the SDGs. In this regard, CPEC-related investments must be tailored in accordance with the SDG regime. To this end, multiple stakeholders need to be involved to minimise the unintended long-term social and environmental implications of the corridor.

The three main components of CPEC – self-sufficiency in energy, expansion and upgradation of communication infrastructure, and the process of industrialisation – will enable the country to make huge strides towards goals seven, eight and nine of the SDGs. These three SDGs involve ensuring access to affordable, reliable, sustainable and modern energy for all (SDG goal seven); promoting sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all (SDG goal eight); and building resilient infrastructure, promoting inclusive and sustainable industrialisation; and fostering innovation (SDG goal nine).

Thus, the execution of CPEC will directly contribute towards achieving these three SDGs. If successfully implemented, CPEC is expected to resolve the chronic issue of an energy shortfall and people will have access to reliable, sustainable and modern energy. Energy deficiencies have been a huge hindrance in economic growth as power outages have affected the industrial production and capacity, which has consequently resulted in the closure of factories, loss of jobs, and fewer exports and revenues for the country.

Similarly, with the creation of numerous SEZs and the process of industrialisation, people will have better job opportunities and means of earning their livelihoods. Besides the creation of significant employment opportunities for skilled and semi-skilled people, the establishment of SEZs is expected to result in an increased FDI in the country, leading to a chain of productive economic activities.

With substantial investments in the communication infrastructure, people are expected to have access to better roads and transport facilities. To sum it up, these three SDGs are directly related to CPEC projects and the country could significantly move ahead on these selected SDGs provided various projects and ventures planned under the corridor are successfully implemented.

Alongside contributing to promote the above SDGs directly, CPEC is likely to help achieve various SDGs indirectly. For example, SDG goal 1 states aims to “end poverty in all its forms everywhere”. Poverty alleviation is one of the key objectives of CPEC.

According to government estimates, CPEC is expected to create about two million direct and indirect employment opportunities across the country. It means about two million families will have better means of livelihood and will subsequently achieve food security (SDG goal two), access to better health services (SDG goal 3), access to quality education (SDG goal four), and access to clean water and sanitation (SDG goal 6).

There is little doubt that a person with a decent job is likely to spend more on the health and education of his/her family. Hence, in one way or the other, the successful completion of CPEC is likely to contribute to accomplishing various SDGs in Pakistan.

Another peculiar example of CPEC’s potential role in attaining the SDGs is its indirect contribution to SDG goal 15. This specific goal aims to “protect, restore and promote the sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation, and halt biodiversity loss”. There is a more likely situation to accomplish SDG goal 15 if people have access to clean and cheap energy.

As in many other developing countries, in Pakistan too, “almost 30 percent of the population [is] without electricity – contributing to the depletion of vital forest land”. Therefore, if people have access to other viable sources of energy, this will substantially reduce and reverse deforestation and desertification. Currently, forest is the only available option with people in rural areas, which result in huge deforestation as people mostly rely on wood from the jungle as a source of energy for cooking and heating purposes.

If people have a reasonable alternative source of energy, it will considerably reduce their dependence on firewood from forests, particularly in rural and hilly areas. To sum up, the successful implementation of CPEC has enormous potential to help achieve countless SDGs in Pakistan as long as concerted efforts are made at various levels to appropriately mitigate and address social and environmental issues, and the challenges involved in financial sustainability.

The writer is a postdoctoralresearch fellow at the GermanDevelopment Institute at Bonn, Germany.