CPEC & ASEAN
During recent months many regional countries have showed their keen interest to join the China Pakistan Economic Corridor (CPEC) which is indeed good omen for macro-economy of Pakistan.
It seems that the new “geo-economy” doctrine of Pakistan has played a vital role in this regard.
Moreover, rapidly changing geopolitical realities and geostrategic new dimensions have now changed the dynamics of regional connectivity and of course global engagement. Thus journey from geopolitics to geo-economics has been started.
Indonesia has now shown keen interest to join the CPEC. Due to constant “structural economic reforms”, Indonesia is widely rated as a future “economic giant”. It is the “largest economy” in Southeast Asia.
Now it is the world’s “7th largest economy” by Purchasing Power Parity (PPP) and a member of the “G-20”. It hopes that it may be the “5th largest economy” in the world by 2030 and fourth soon after.
On a market exchange rate basis, Indonesia ranks “16th” in the world but will likely enter the top ten by 2030. Thus it has a beneficial economic proposition with Pakistan & CPEC.
Thus mutual cooperation in diverse sectors of economy, trade & commerce, joint venture, FDIs, agriculture, science & technology, private sector, tourism, education and energy is brighten in which the CPEC may play a major role of mutual convergence.
Indonesia’s Ambassador to Pakistan Adam M Tugio appreciated Pakistan’s strategically location at the juncture of South Asia, Central Asia and Middle East which has vast potential to emerge as a hub of regional connectivity and economic activity. Thus CPEC is the connecting hub for the regional countries.
While delivering a keynote speech in the CGSS sponsored international webinar the Indonesian envoy has welcomed Pakistan’s efforts to enhance regional connectivity and development through the China-Pakistan Economic Corridor (CPEC).
He highlighted immense potential of CPEC to create diverse investment opportunities and promote industrial, financial and agricultural cooperation.
On its part the Center for Global & Strategic Studies (CGSS) has been advocating benefits of sustainable regional connectivity through the bench mark of the CPEC.
In this regard its continued online internship programs, interactive dialogues, meaningful seminars/conferences and webinars pertaining to different countries like Indonesia, Egypt, Hungary, Azerbaijan, Uzbekistan, Kazakhstan and China is projected the real potential of Pakistan’s economy and positive, productive and participatory role of the CPEC.
He outlined that the preferential trade agreement (PTA) signed between the two countries in 2012 was not just a start to elevate the bilateral trade volume but also a manifestation of common desire to further develop special ties through enhanced economic cooperation.
In this context, joining of Indonesia with CPEC would further strengthen scope and utility of Pak-Indonesia bilateral relations in the days to come.
He highlighted his country’s structural reforms and measures to make PTA equally favourable for both countries, Indonesia agreed in 2019 to grant unilateral concessions on 20 additional tariff lines of Pakistan’s export interest.
He termed education as one of the potential areas which can benefit people of the two countries.
He said the two nations fully realised the importance of cooperation at multilateral forums. Tugio showcased that both countries had worked closely on major regional and global issues and continued to work with mutual coordination and cooperation at important regional forums including the Asia-Europe Meeting (ASEM) and the ASEAN regional forum.
He was of the opinion that ASEAN and Pakistan have great potential for cooperation in various sectors as Pakistan’s total trade with ASEAN of over $7 billion suggests that there is huge scope for Islamabad to scale up its economic engagement with ASEAN.
Most recently, Pakistan persuaded foreign investors to invest in the country and the CPEC projects offered lucrative incentives towards Industrial transformation.
During the most recently held webinar jointly organised by Embassies of Pakistan and China in Jakarta, Pakistan’s Board of Investment (BOI) presented Investment opportunities in China Pakistan Economic Corridor (CPEC).
It offered an opportunity to jointly explore the promising prospects of CPEC and to devise a way forward to bolster regional economic cooperation.
The participants vowed to further advance industrial cooperation among Pakistan, China and Indonesia.
Director Project Management Unit (PMU), Asim Ayub presented a detailed presentation on CPEC and briefed the audience about Industrial Cooperation under CPEC, various incentives available to investors under Special Economic Zones (SEZ) act.
He further said that Pakistan also offers sole enterprise option.
He emphasized that Pakistan is fully focused towards Industrial transformation and investors should take benefit of the lucrative incentives.
Addressing the webinar, Chairman BOI Atif Bokhari highlighted immense investment potential of the CPEC which has entered in its second phase and efforts are now focused on forging Business to Business (B2B) and Person to Person (P2P) collaborations in the form of industrial & socio-economic cooperation.
He pinpointed Pakistan’s liberal investment regime which allows 100 percent repatriation of profits, dividends and capital.
In addition, Pakistan is actively pursuing development of SEZs and is offering attractive fiscal incentives including 10 year tax holiday on income & custom duty exemption on import of capital goods to both developers & enterprises.
He projected that the government has launched conducive policies for electric vehicles, mobile manufacturing and construction sectors in a bid to enhance investment profile of Pakistan.
He encouraged Indonesian & Chinese investors to be part of the shared future of industrialization & economic prosperity through the realms of CPEC.
Ambassador of China Xion Qian remarked that CPEC is a landmark project and it offers valuable opportunity to the three countries to explore trilateral cooperation & untapped business opportunities.
The participants identified that Pakistan & Indonesia can explore collaboration in the field of textile, food processing, agricultural products, infrastructural development, chemical & pharmaceuticals, engineering goods, gemstones, iron & steel to name a few, as Indonesian companies have vast experience & expertise in these areas.
The Indonesian speakers stated that their companies can help Pakistan in establishing downstream industry and also assist with value added products.
Secretary BOI Fareena Mazhar stated that Pakistan is taking several reform initiatives to streamline our business processes and offer a conducive business environment to both local and foreign investors.
Fareena shared that Pakistan would welcome Indonesian investment in sectors such as food & agriculture, value added textile, tourism, construction and also encourage investors to explore the electric vehicle sector as Pakistan offers tremendous scope for setting EV manufacturing units.
Being prominent regional expert of the CPEC & BRI I submit that Pakistan and Indonesia should further strengthen their bilateral economic cooperation, and trade & commerce activities through the flagship projects of the CPEC.
Artificial Intelligence (AI), digitalization, tourism, education, energy & food cooperation, and health may be the preferential areas for mutual cooperation.
Even goals of mutual massive industrialization, persuasion of green energies, hydropower generation and last but not least, infrastructure may be points of mutual convergence under the umbrella of CPEC between the two countries.