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For a shared destiny


June 7, 2020

The future of Pakistan and the health of its economy undoubtedly hinges on its transformation from an agricultural country to an industrial nation. The solution to most of our intractable socio-economic difficulties is inextricably linked to this shift.

CPEC provides a conduit to that transformation and Pakistan surely has taken a great stride in that direction by becoming part of this mega-economic initiative of the Chinese government. The sustainability of this qualitative shift mandates collective support of all national stakeholders to turn this dream project into an everlasting joint enterprise for shared destiny and prosperity.

It is an established fact that no nation can leapfrog into the elite club of developed nations unless it invests in all elements of the infrastructure components, as there are no shortcuts to economic progress. All modern growth models invariably rely on development of infrastructure and the resultant industrialization as an imperative ingredient for sustained economic growth of a country. The phenomenal economic prosperity and industrial development in Asian countries such as China, South Korea, Singapore and Malaysia during the last three decades is a ranting testimony of this modern reality. Attainment of high level growth is unimaginable without industrialization and gradual lessening of dependence on the agriculture sector.

By becoming part of CPEC, Pakistan is poised not only to make up for lost opportunities but also to become an economic power house within the next two decades. Apart from radically changing the dynamics of regional connectivity and trade, it is going to act as a catalyst for transition from an agricultural economy to an industrial economy. CPEC is a mix of infrastructure projects, energy producing units and industrial zones along the corridor routes.

The development of infrastructure under CPEC will lay a firm foundation for industrialization and the corridor has been acknowledged as a perfect recipe to lift the economic profile of the countries that are part of the initiative. Even the UN has recognized its economic potential and the collateral outcome of promoting peace through economic interdependence. To ensure transparency in the implementation of CPEC, China and Pakistan have also signed an agreement for joint audit of selected projects.

The Gwadar Port, three routes of the corridor and energy projects are the envisaged engines of growth. Hopefully the special industrial zones to be set up at Bostan in Balochistan, Rashakai in Khyber Pakhtunkhwa, Dhabeji in Sindh, Sheikhupura in Punjab, Moqpondas in Gilgit-Baltistan, Bhimber in AJK, Mohmand in Fata besides two projects of the federal government at Islamabad and Port Qasim will also nudge the process of industrialization in the country. The coming on stream of the energy producing projects and the plans to generate another 30000 MW of electricity by 2030 will surely help not only to overcome the present energy crisis but also cater to the future energy requirements of the country.

It is pertinent to mention that the scope of CPEC was further widened at the sixth meeting of the Joint Coordination Committee (JCC) with the inclusion of the Basha Dam, Peshawar-Karachi railway line, Karachi Circular Railway, Orange Line Train for all provincial capitals, Keti Bander and special economic zones and three more energy projects in Sindh. Consequently the size of CPEC in monetary terms has been jacked up to $57 billion from the originally envisaged financial cost of $46 billion.

The 7th JCC also officially approved the Long Term Plan (LTP) of CPEC. The LTP provides a conceptual framework for CPEC up to 2030. The government of Pakistan consulted provinces, federal ministries and their respective technical groups in regards to LTP. The seven salient features of the LTP are: connectivity, energy, trade and industrial parks, agricultural development and poverty alleviation, tourism, cooperation in areas concerning people’s livelihood and non-governmental exchanges and financial cooperation.

In the energy sector, both countries are committed to enhance cooperation in the fields of oil and gas, electricity and power grids. The focus is on thermal power, hydropower, coal gasification and renewable power generation and modernizing power transmission networks. CPEC has already addressed the major energy bottleneck in Pakistan. Almost over half of the 10,000 MW energy added recently to the national grid comes from CPEC.

According to the LTP, the implementation of CPEC will take place in three phases, with clear goals. In the first phase, by 2020, the major bottlenecks in Pakistan’s socio-economic development will be completely addressed. The second phase will be done by 2025, when all the infrastructure of CPEC will be ready and all industrial projects will have been completed.

The third phase of the LTP will mature by 2030. The endogenous mechanisms for indigenous, inclusive and sustainable economic growth will be in place in Pakistan. As per the LTP: “CPEC’s role in stimulating economic growth in Central Asia and South Asia will be brought into holistic play, and South Asia shall grow into an international economic zone with global influence”.

China has shown remarkable flexibility by expanding the scope of CPEC to the social sectors, particularly alleviation of poverty in consonance with the PTI manifesto. This development occurred during the visit of Prime Minister Imran Khan to China. Chinese leaders pledged to make increased investments in those sectors besides extending $2 billion financial support to tide over the financial crisis confronting the country. China also made a commitment to rectify the trade imbalance between the two countries by taking steps to enhance Pakistani exports to China. Economists are of the considered opinion that the envisaged completion of CPEC projects by 2030 will crystallize in 2-3 percent increase in Pakistan’s GDP growth.

Under the present circumstances when our economy has been badly affected by the onslaught of the coronavirus, the continuation of work on CPEC projects is the only hope of stemming the economic rot and putting the economy back on the rails.

As is evident, CPEC is pivotal to the future economic development of Pakistan and provides us a unique opportunity to become a hub of economic activity – post coronavirus – in the region and beyond. It is encouraging that in view of the importance of CPEC, the leadership has shown unflinching commitment to ensure timely implementation of this economic initiative and putting Pakistan on the road to transformation into an industrialized country.

The writer is a freelance contributor. Email: [email protected]