Special zones

The real metric for whether CPEC would be able to deliver for Pakistan’s economy was not going to be the numbers of highways or power stations built, but whether it would lead to a new spurt of industrialisation in the country. On this metric, the project continues to do poorly. The failure seems to fall on the federal and provincial authorities in the country. As it stands, all nine special economic zones to be built under CPEC have not gotten off the ground. This is despite the fact that almost all authorities wanted to be first in line when it came to being allotted an SEZ, but last in line for actually creating it.

This bizarre scramble was revealed by the government in the National Assembly, where it was told that land acquisition has been stuck in a quagmire while the feasibility reports are far from complete. Respective departments seem to only be interested in pushing paperwork. The KP government claims that it is a step ahead after signing an agreement last year on the Nowshera SEZ, but many of the PC-1s for the project are yet to be submitted. The October 31 launch date set by the provincial government looks unrealistic.

The other eight SEZs are languishing even further behind. The Sindh government claims that it has kept 1,530 acres of land in Dhabeji for an SEZ, while it has submitted the PC-1 for electricity, water and gas provision. The Bostan and Faisalabad SEZs have also been crawling along, while the Islamabad SEZ is delayed due to the unavailability of public land. In Mirpur, the government says that 75 percent of land required has already been acquired. The government says similar acquisitions have been made in (former) Fata and Gilgit-Baltistan for the respective SEZs planned there. With land acquisitions still incomplete in most cases, there is a long road ahead before the economic benefits of CPEC will come to Pakistan. The need for investment in industrial growth is urgent, especially if such growth can spark an increase in Pakistan’s exports. While SEZs remain a sub-optimal way of sparking industrial development, it is surprising to see that the government itself is not doing enough to push forward a path of its own choosing. With land acquisition and feasibility still the main issues, the real debate over how much control Pakistani business would have and what rights Pakistani workers would get in these industrial zones are yet to be debated. These are the most crucial issues to address if the SEZs are to benefit Pakistan’s economy.