Home Views & Opinions Completion of CPEC’s second phase and its impact on our economy

Completion of CPEC’s second phase and its impact on our economy

358
0

The China-Pakistan Economic Corridor (CPEC) is a game-changer for the region and beyond. It is building strong roots to take economic growth to next level in the two countries and across the region and preserving peace at the regional and global level. China had initially announced to invest – a mix of equity and cheaper debt – the colossal amount of $46 billion to develop the much-needed infrastructure and power projects in Pakistan over a period of 15 years (2015-30). Now, the estimated investment size has now grown to over $60 billion.
CPEC, a flagship project of China’s “One Belt One Road” (OBOR) initiative, acts as a vital bridge that connects China with Central Asia, the Middle East and South Asia. By linking China with the Arabian Sea and the Persian Gulf, CPEC will expand trade potential and enhance energy security of the region. It will directly benefit the people inhabiting China, South Asia, Central Asia and the Middle East. These aspects have been analysed by Mr. Li Xiguang in his article titled “Building a New Civilization along the One Belt One Road.” Similarly, Du Youkang’s analysis of the interplay between CPEC and the OBOR brings out how CPEC fits into the overall concept of OBOR.
China’s economic development is increasingly dependent on international oil and gas resources. Its dependence on foreign oil is approaching 60 per cent. Eight of China’s top ten oilimporting countries, Saudi Arabia, Iran, Russia, Oman, Iraq, Sudan, Kazakhstan, and Kuwait, are located along OBOR. Considering its Maritime Silk Road transport corridor, despite the unrest in the Middle East and Central Asia, China will continue to engage in these regions. It is also pertinent to mention that peace and stability in the Gulf countries, particularly in the Gulf of Aden in Yemen and Somalia, are essential for China’s energy supply and trade.
The CPEC, however, is not just an economic project. It has many civilizational, cultural, political and strategic dimensions. The core of the project will remain geo-economic but its implementation would prove to be transformative for contiguous regions of East Asia, Central Asia, South Asia, West Asia, the Gulf, and Africa. It is, therefore, necessary to look at the CPEC from different angles and this effort has been made ably by renowned Chinese and Pakistani writers in this compilation.
The projects – including roads and railways from Gwadar in Pakistan to Xinjiang in China – will cut short Beijing’s trade routes with the world through sea approximately by 12,000 miles. This would save China billions of dollars in trade with the world.
The income to be generated through toll collection would also play a critical role in paying off the debt to China.
Pakistani officials anticipated that CPEC will enable the environment to create 2.3 million jobs between 2015 and 2030 and add 2-2.5% points to the country’s annual economic (GDP) growth.
“CPEC is the hope of a better region in the future with peace, development and growth of the economy,” the CPEC Authority stated.
To improve the lives of people of Pakistan and China by building an economic corridor promoting bilateral connectivity, construction, explore potential bilateral investment, economic and trade, logistics and people to people contact for regional connectivity. It includes: (1) Integrated Transport & IT systems including Road, Rail, Port, Air and Data Communication Channels; (2) Energy Cooperation; (3) Spatial Layout, Functional Zones, Industries and Industrial Parks; (4) Agricultural Development; (5) Socio-Economic Development (Poverty Alleviation, Medical Treatment, Education, Water Supply, Vocational Training); (6) Tourism Cooperation & People to People Communication; (7) Cooperation in Livelihood Areas; (8) Financial Cooperation; and (9) Human Resource Development.
The second phase of the CPEC is set to boost Pak-China cooperation in agriculture and initiate an era of industrialization through establishment of Special Economic Zones. The second phase of the multi-billion-dollar economic cooperation between Pakistan and China will have a special emphasis on agriculture, industry, trade, and science and technology. The Pakistani government’s priority about the second phase of CPEC is to make special economic zones functional, besides development projects in Gwadar. Many projects focusing on infrastructure and energy sectors in the first phase of CPEC have been completed and are already operational, and work on the second phase is underway
Pakistan would be the biggest beneficiary due to implementation and completion of 2nd phase of CPEC. Pakistan has got multi-dimensional benefits. First of all, Pakistan’s GDP will increase by 6.43 per cent till 2030 as a result of infrastructure investment. Reforms in governance like tariffs, ease of doing business, and trade facilitation can push the increase to the level of 14.03 per cent. Welfare effect would be 5.18 per cent and reforms will give further impetus and total increase would be 10.51 per cent. It will also help lift 1.1 million people out of extreme poverty trap. It has also potential to boost the employment opportunities and it was pointed out that Pakistan can get four million jobs. Trade will also witness an increase of 9.8 per cent, if Pakistan implement the CPEC and support it by required reforms.
These projections can be qualified by the current status of gains of CPEC. Pakistan has already witnessed tremendous benefits from 2nd phase of CPEC related interventions. Latest figures tell us that CPEC created 75,000 jobs for Pakistanis (China Embassy 2019). It means 75,000 families are benefited and it helped them to combat poverty. CPEC helped Pakistan to manage the load-shedding, which, in turn, contributed to control the annual loss of US$ 4 to5 billion (Vision 2025, 2015). Vision 2025 also pointed out that it was also undermining the GDP growth rate by two per cent. It also contributes to tackle issues of aging plants and infrastructure related to electricity.
Pak-China friendship, Singing the universal language of peace, love asAli Zafar(a renowned Pakistani artist) and Chinese artist Xiang Minqi croon for a song to celebrate 70th anniversary of Pakistan-China relations.In a showcase of traditional dance, members of a Chinese delegation unleashed their talents in sync with local performers at the Pakistan National Council of the Arts. The 100-member delegation was invited by the Ministry of Economic Affairs. The auditorium was abuzz with guests as two Chinese presenters welcomed everyone, with one of them translating his partner’s words into Urdu, much to the guests’ surprise. In the opening act, Pakistani performers danced to the beat of dandias on the “Gypsy joy dance”. They were dressed as gypsies complete with braided hairdos and embellishments.