CONSIDERED to be vital for Pakistan’s economic growth, a recent framework for regional connectivity and partnership with China has been dubbed a “game and fate changer” and involves $46 billion of investment. Derived from China’s transnational initiative of One Belt One Road (OBOR), it aims at greater infrastructural interconnection and trade linkages between Pakistan and China and beyond through a 3,218-kilometer stretch of network comprising of roads, rail, fiber-optic, energy pipelines, industrial clusters, and special economic zones (SEZs).
CPEC, or CHINA-Pakistan Economic Corridor, promises to transform Pakistan into a geo-economic hub as it will not only connect China’s Kashgar region with Pakistan’s Gwadar region, it will also augment the interregional trade potential by providing linkages between China, Central Asia, South Asia, the Arabia Sea, Persian Gulf, and the Middle East. Billions of people inhabiting these parts of the world will benefit from the socio-economic development engendered by CPEC. The corridor will serve as a driver for connectivity between South Asia and East Asia, and will play a crucial role in regional integration of the “Greater South Asia,” which includes China, Iran, and Afghanistan, and stretches all the way to Myanmar.
Also involving projects for agricultural development and poverty alleviation, among others, China has committed to a cumulative investment of $46 billion in the said regional connectivity and economic partnership project. Tourism cooperation, financial and human-resource development, and people-to-people communication are the other projects covered by the framework.
The credit ratings firm Moody’s Investors Service has described the project as a “credit positive” for Pakistan. For its part, the Manila-based multilateral lender Asian Development Bank stated, “CPEC will connect economic agents along a defined geography. It will provide connection between economic nodes or hubs, centered on urban landscapes, in which large amount of economic resources and actors are concentrated. They link the supply and demand sides of markets.”
Launched by China and Pakistan in 2013, CPEC has a systematic timeframe for completion by 2030. CPEC was formally launched by China and Pakistan in 2013 with a systematic time-frame for completion by 2030. By now, it has gradually entered into the state of full implementation from planning.
CPEC’s prioritized or early-harvest projects, which mainly include the modernization of Gwadar Port and energy sector projects with a total of 10,400-megawatt (MW) capacity, are scheduled to be completed by 2018 or 2020. The port has already started operating under CPEC from Nov. 2016, when the first trade convoy docked at it after traveling from north to south in the western part of Pakistan. Being the world’s largest natural, deep sea, and warm water port, Gwadar provides a unique node of maritime connectivity for CPEC.
The economic opportunities under CPEC are enormous. It promises cheaper routes for transportation of goods through land as well as maritime nodes of connectivity. Both China and Pakistan are committed to building CPEC by completing its envisioned projects with high-quality and on-schedule, so as to achieve win-win results and bring dividends not only to China and Pakistan but also to other countries in the region.
The business coommunity in the region and beyond can take advantage from key sectors of Pakistan’s economy like agriculture, textiles, minerals, gemstones, handicrafts, marble and stoneware, leatherwear, food processing, sports goods, pharmaceutical products, and surgical instruments. It is a win-win proposition, as the profit margin on doing business in Pakistan is high, with the government offering liberal incentives to foreign investors.