CONNECTIVITY in the 21st century is a defining feature of the modern economy and comprehensive development. In order to unlock the potential of closely interlinked production networks and value chains, a more comprehensive perspective on connectivity emerged led by President Xi Jinping of China. This connectivity is not sector specific but is envisaged as part of an integrated whole, encompassing the development of corridors of prosperity through networks of trade, transport, energy, flow of people, goods, services, communication and technology that allow for greater efficiency in the distribution of resources.
China-Pakistan Economic Corridor (CPEC) is, therefore, high on the policy agenda of both China and Pakistan as it is contributing to the realization of Pakistan’s national developmental goals and is a practical manifestation of Pakistan’s pivot to geo-economics. It is a people-centric development project and represents a win-win proposition of international cooperation providing new opportunities for economic rejuvenation and prosperity of both countries and other regions.
Through CPEC, China and Pakistan have jointly provided the sub-regions of South Asia, Central Asia and West Asia with a connectivity network and have laid a strong and stable foundation of a lasting, broad-based regional as well as trans-regional cooperation. CPEC is also the distinctive symbol of enduring Pakistan-China friendship and a clear manifestation of the desire of leadership on both sides to take the economic and trade relations to new heights to commensurate with the political and strategic relationship. CPEC covers a vast array of short, medium and long-term projects. This model of development fully resonates with Pakistan’s own vision and firm belief that CPEC is a “game-changer” not only for Pakistan but for the entire region and presents enormous opportunities to people from Gwadar to Kashgar and beyond.
Over the past one decade, this transformational project has become a tangible reality and has already helped improve the economic landscape of Pakistan. It has propelled Pakistan’s infrastructure development by laying a strong energy and road infrastructure for subsequent development of industry, agriculture and human resource.
CPEC through Gwadar port has not only provided China a better access to the Middle East, which is also an important market for Pakistani exports, but has also provided the Middle East a direct route to Central Asia and beyond. Similarly Africa’s economic potential is huge with trillions of untapped natural resources and high youth percentage. Pakistan with its Look Africa policy is keenly interested in enhancing trade and investment relations with Africa. CEPEC thus provides a massive and critical platform for achieving this objective which will be mutually beneficial for both Pakistan and Africa.
The world is in a flux and is witnessing significant political, strategic and economic transformation. In the current changing world scenario China has assumed great importance and influence through Belt and Road Initiative (BRI) and CPEC in the region. CPEC therefore, has to be understood in the context of Pakistan and China’s strategic interests in Asia-particularly South and East Asia and the way the U.S.A and the West have challenged them.
In this regard the statement of President Xi Jinping is of great strategic importance. He said that, “Given that the world is seeing more sources of instability and risk, the two countries should stand together more firmly, promote their all-weather strategic cooperative partnership and build a closer China-Pakistan community of shared future in the new ear.”
Due to the immense economic and strategic value of CPEC, several potential threats to it can be identified including: emerging-market uncertainties, commercial and political frictions between countries, the proliferation of low-level conflict, and slow progress on global challenges. The China containment policy of the U.S.A. currently forms the most important instance of great-power Competition in the existing interstate system. As a result, it holds within itself the key to the all-important question of global stability, peace and socio-economic development. Therefore, Looking at it from all perspectives, CPEC is an important and essential element of BRI and has, in the last ten years rightly received the attention and focus that it deserve from both Pakistan and China
The first phase of CPEC, which is almost complete, has had a positive impact on the lives of millions of Pakistanis by providing better access to resources, modern infrastructure, addressing the critical energy deficit, creating employment opportunities and enhancing the country’s capacity for transit and industrialization. 10. Chinese vice Prime Minister He Lifeng visited Pakistan for the 10th anniversary commemorative ceremony in July 2023. On this occasion both China and Pakistan strongly reaffirmed their commitment to CPEC “high quality development” which envisages the building of growth corridor, livelihood enhancing corridor, a green corridor, a health corridor, knowledge corridor and an open corridor. They also emphasized the speedy completion of the remaining projects, particularly the industrialization of Pakistan through SEZs and revolutionizing the agriculture sector.
In a message on the 10th anniversary of CPEC President Xi Jinping expressing strong support for CPEC, stated that, “China and Pakistan have been advancing CPEC under the principle of extensive consultation, joint contribution and shared benefits and have achieved a number of early harvests…..China and Pakistan will continue to improve overall planning and expand and deepen cooperation. No matter how the international landscape may change. China will always stand firmly with Pakistan.” This clear and unambiguous declaration of support by China should not only silence the critics of CPEC but also encourages both governments to work with greater zeal and fervour to complete the remaining projects and expedite the construction and operationalization of the prioritized SEZs.
The real fruits of CPEC will only accrue with the speedy development of SEZs which will enhance production of diversified products and value added merchandise to China, Africa, Middle East and Central Asia. The nine SEZs under CPEC would be a lifetime opportunity for Pakistani companies to collaborate with Chinese and third country companies for the development of export-oriented manufacturing sectors.
Pakistan has not been able to attract investment in the manufacturing sector in its SEZs in the same massive way as other countries in Asia. The development of SEZs must be aimed at improving the overall business climate in the country. This can be done through improved infrastructure and trade facilitation to attract investment from foreign and domestic firms in the zones. It is important to make SEZs a Success Story in Pakistan and for this it is imperative to take some necessary and urgent steps including: (a) strengthening the Regulatory and Administrative Framework (b) addressing Land-Related Issues (c) providing the right incentives to SEZs and (d) encourage Backward and Forward Linkages.
CPEC can serves as a womb for the birth of Pakistan’s blue economy. CPEC offers immense opportunity to explore and exploit the untapped blue economy of Pakistan. With CPEC and robust Gwadar port, the dream to capitalize on the country’s blue economy for a sustainable growth can be realized. Gwadar is a deep sea port which has a great potential in terms of trade, marine transportation, off-shore exploration, tourism, aqua resort and deep sea fisheries. After the full execution of the master plan of Gwadar city under CPEC, the city would become the Singapore of Pakistan with a GDP of $30 billion by 2050 with the production of 1.2 million jobs for the locals.
Multilateral cooperation for CPEC development is a key priority. The integration of CPEC with Economic Cooperation Organization (ECO) should be promoted and new development realities like the recent China-Iran 25-year partnership deal should be utilized for the regionalization of CPEC under a trilateral Agreement China, Pakistan and Afghanistan will identify feasible projects to help Afghanistan meet infrastructure and development deficit.
The implementation has encountered difficulties in Pakistan, especially due to internal security concerns. Pakistani has taken measures to address these problems, such as military operations and the formation of a special security unit, but a long-term resolution requires enduring solutions and heightened security measures.
If there is continuity in Pakistan’s economic policies, along with political stability, then investment in CPEC and other projects will continue to grow. CPEC is a geo-strategically significant project for both China and Pakistan. It will enable China to get out of the Malacca dilemma and provide an alternative trade route to China. For Pakistan, CPEC is a ray of hope in the prevailing tough economic and geopolitical environment, where it has limited foreign policy options.
I hope the 13th JCC, scheduled for May 2024, will focus on high-quality CPEC development and add new initiatives for enhanced connectivity in all aspects of our relationship and economic cooperation.
—The writer is a former Ambassador based in Islamabad.
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