China-Pakistan Economic Corridor, The panacea for all economic ills of Pakistan?

China-Pakistan Economic Corridor

Economic development is the process by which a state improves the economic, political and social wellbeing of its citizens without any sort of discrimination. This continual process makes the country and its people grow and prosper and also helps the country in gaining respect in the community of nations. When Pakistan emerged on the map of the world, in 1947, it was mired in numerous political social and economic problems. Since then the problems have only aggravated despite the so-called efforts by different regimes—civil and military alike—in the country. The current economic indicators present a worrisome picture as the country’s economy seems like a rudderless ship. To put Pakistan on the path to economic development, we need to analyse the development models of the developed countries so as to know their secrets of reaching the zenith of development.

Pakistan, the sixth most populous country in the world, is blessed with abounding natural resources. It has all the three factors i.e. huge natural-resource reserves, unique geographic locations and huge workforce, which help a country to tread on the path of economic development. However, the appalling dilemma is that due to flawed policies adopted by the successive governments, Pakistan relies heavily on foreign aid and loans instead of exploiting its own resources of capital-generation. Immediately after its inception, Pakistan became an ally of the United States and got huge amounts in the form of grants and aids. This heavy reliance on monies got from foreign sources impeded the country’s efforts to generate revenue from its resources. On the other hand, the ruling elites did also block any attempts made to put the rich under direct taxation. Given its history of foreign dependence, an investment of $46 billion (now $51.5 billion) in the form of China-Pakistan Economic Corridor (CPEC) is a unique and an extraordinary opportunity for the country’s economy to develop and grow.

No country has ever given aid and loans to some other country without fulfilling its own national interests. The United States loaned Pakistan only for helping the country in combating communism and, of late, terrorism. China is also coming to Pakistan with the sole motive of boosting its own economy through new economic routes. In spite of the fact that China is a large county, as it hosts nearly 20 percent  of world’s population and that it has recently surpassed the US economy in terms of GDP, a large chunk of its population is suffering from poverty, low per capita income and many other economic ills. It is still considered a developing country rather than a developed one.

In order to give Chinese economy a much-needed boost, Chinese president Xi Jinping announced his much-talked-about policy namely “One Belt, One Road” in 2013. It seems that he is an avid reader of Chinese history and a follower of the old Chinese proverb: “If you want to be rich, you must first build roads.” An integral part of his OBOR initiative is China-Pakistan Economic Corridor (CPEC) which is being built in Pakistan. It will connect Kashgar in China’s western province Xinjiang to rest of the world through the Gwadar port of Pakistan.

Xinjiang is an extremely backward region and there are fewer opportunities for trade activities as export of Chinese products from Xinjiang through country’s eastern borders costs a lot. That’s why there were only a few commercial activities till today. In a bid to boost this backward region, the Chinese government has started the CPEC project so that it may address the grievances of the citizens.

However, there are huge opportunities for Pakistan in the CPEC. It is one of the largest foreign investments ever made here. The Chinese are making massive investments in infrastructure, energy and others sectors. As per the plans, nearly 3000 kilometres of roads will be constructed for transit trade.

Moreover, it will be instrumental to resolving the chronic energy crisis that has plagued Pakistan since long. The CPEC is a blessing in disguise for Pakistan as many projects, which are to be built under CPEC, will add a whopping 16,395 megawatts of electricity to the national grid. The current energy shortfall in Pakistan is approximately 5000 MW in the peak season of summer. If these projects get completed in time and work effectively thereupon, it will, hopefully, end the energy crisis.

Although the CPEC brings huge opportunities of economic development for Pakistan yet it has many challenges as well. To reap the fruit of CPEC, Pakistan will have to improve its security situation, especially around the trade routes of CPEC. The security agencies and the civilian government will have to be on the same page for this purpose. Recently the news emerged that political parties have developed differences over the route of the CPEC. Every province wants the larger share out of it. The political leaders of the country need to sit together and resolve the differences amicably so that all the provinces put in concerted efforts to make this dream a reality. It is the time for national unity and all the politicians and political parties must come out of their narrow interests and serve the nation.

Pakistan is facing an acute institutional crisis as well. Almost every initiative taken by the government goes futile only because of poor policymaking and even poorer performance in policy implementation. By working on different projects with the Chinese, Pakistani policymakers and civil servants will learn a lot as the Chinese are known for their professionalism.

Leave a Reply

Your email address will not be published.