CPEC: The initiative for economic prosperity ,opportunities and Institutions

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The China –Pakistan Economic Corridor is an economic cooperation between the world’s two steadier friends. This economic corridor is considered to be the game changer for both of the countries for their economy as well as political stability which will impetus to strengthen the institutions of Pakistan and China. Initially, this project was incepted worth $46.5 billion and later it was valued to $51.5 billion. A mammoth of the projects of highways , transport and energy are being built under the aegis of CPEC. Aside from the controversies over this astounding corridor, the CPEC  is basically a shared venture of development between the two friend countries and it hopes to move the Pakistan’s and as well China’s growth equally to the heights of wondrous.After its completion, the CPEC will prove a geopolitical game-changer for the reason that it will bestow China with an alternative way to South China Sea and Strait of Malacca to reduce the cost of shipping of oil, gas and goods for china.In a day , China spends approximately $18 million on its imports of 6.2 million barrels of oil as shipment cost from the destined region-the Middle East, accounting for 80% of its oil needs rooting through the Malacca Street covering the distance of 9,912 miles. But through the Gwadar Port build under the umbrella of CPEC, the mentioned cost will be significantly reduced to one-third of the current level of cost .because the distance through Kashgar -Gwadar  is 3,626 miles. The reduction in 6,000 miles will save almost $6 million every day and $2billion per annum.Likewise Pakistan is going to be benefited from the CPEC from its projects of transport and energy .The 21 agreements on energy including gas, coal and solar energy  the 14  projects will  provide up to 10,400 megawatts of energy by March 2018. These projects would provide up to 16,400 MW of energy altogether, which can reduce much game of energy demand and supply of the country. The current energy demand –supply gap is 15000 MW .The energy production through CPEC will cause once again the Pakistan’s production industry to flourish and uplift the economy towards its booming path. Besides the energy sector CPEC seems to be  employment creator and will pave the way for business and skill enhancement for labors in Pakistan.The jobs that will be of two types, the direct jobs, like a construction worker making the road, to secondary or side jobs, like a restaurant owner on the road, this will have a direct impact on Pakistan’s economy and politics. One must understand that making an investment of $51.5 billion is not a free gift, but an effective buying of power.

Looking at the impact on the economy on the CPEC corridor, it is clear that Pakistan will mostly be a transit point for this CPEC project. This project would be saving thousands of kilometers of transit between China and other countries. The increasing interest of US, Russia and other countries itself shows the worth and value of CPEC. Many of the big business firms and portfolio owners have been in negotiations to invest in the China –Pakistan Economic Corridor. This project has a direct impact on the country’s portfolio investment. Previously, due to severe security threats, the outside country firms were not interested in having business ties with Pakistani government and firms, but this project has changed the mindset of international firms about the security conditions of the country. Engagement of International business firms with the local firms and with the government will promote track 2 diplomacy. This will ultimately strengthen the bilateral economic, political and cultural relations with the connected states through CPEC. It is the inevitable fact that the economic cooperation and financial investments have never been free. CPEC, undoubtedly, is a loan rather than the perfect investment. Pakistan has to repay two percent interest rate annually to the lenders of the loan. Historically Pakistan’s economy mostly relies on the foreign aids and loans but there is a technical difference between the loan taken from China and from other countries AS China invests directly in the projects under the armpit of CPEC to reduce the probability of corruption and free-riding by the stakeholders of our country. CPEC is much-hoped by the people for their prosperity and country’s economic boom.Pakistan is standing o n the beach of economic revival. The leadership is required to steer seriously the country through the path of development. It is the responsibility of the officials to ensure that worker’s rights are protected, environmental and social externalities accounted for and the affected parties duly compensated for damages. First and foremost, the government should priorities investment in its own people and empower them through access to education, employment and equal opportunities to become active participants in the economy. Vocational training and Chinese language training will equip people with the basic skills required to establish businesses, participate in infrastructure development projects and use the CPEC to their own advantage and worth. An overarching policy framework is urgently required to manage the progress of CPEC and ensure that the benefits of the CPEC trickle down to the masses and uplift the entire country as opposed to enriching a select few. Consequently, an economic revival could reduce socio-economic inequities among ordinary citizens, create a more level playing field for all the provinces. It is high time for the policy –makers of our country to keep managing CPEC projects with their wit and words to ensure the desired success of the CPEC for poverty reduction and an increase in the trade and diplomatic relations with another world. Institutions of our country are at the point of convergence to perform accordingly to make the CPEC successful.The Business houses in Pakistan need to enter into joint ventures with Chinese and other foreign entrepreneurs not after the roads are constructed, but long before that. Businesses compete for opportunities to succeed ahead of the opportunity becomes too obvious. In this competition, they need to win supply contracts for the construction material and the technical assistance they can offer for the initiation of work on CPEC projects. The concerned institutions – the Board of Investment (BoI), Federal Board of Revenue (FBR), ministries of commerce and industries, Planning Commission and Ministry of Finance should get themselves coordinated to put efforts for the purpose of institutional thew to make future Pakistan a very sustainable both by its economy and by its institutions by availing this great and heightened opportunity of CPEC.

 

Regards:

Abdul Ghani Chohan