Samina Khan

CPEC, China-Pakistan Economic Corridor, is a first step of the journey towards economic regionalization in the world of globalization in the hope of regional peace, development and growth of economy not only for Pakistan and China but also for Iran, Afghanistan, India, Central Asian Republics and beyond. CPEC is the piece of OBOR (One Built One Road), this is an olden belt that could bind 65 countries of Central Asia, Europe and Africa to share the economic prosperity.

Silk Road was first invented by the German geologist and explorer Baron Ferdinand von Richthofen in 1877; the “Silk Road” has been used as a metaphor of European and Asian cultural and trade interchange. The Silk Road provided the vehicle for all sorts of creative exchange between enormously diverse peoples and cultures. Share the prosperity by providing the more open business, investment and exchange opportunities to play in open economies with relaxed restricted boundaries. From ancient to middle and from middle to modern age road infrastructure is playing being a part of back bone in the development of any country then why the importance of road infrastructure is denied by a group of people of Pakistan. This is the matter of Pakistan’s progress and sovereignty, is not the matter of any personal understanding and self-creating theories regarding the development of any economy that infrastructure and investment of roads is useless and not needed for Pakistan.

Being a developing country, road infrastructure is deadly requirement of Pakistan. Each and every student of Economics and Development Sciences knows the value of roads construction is the path of business and economic activities which can serve more positively, consistently and long lasting in the economic growth. Because it is very easy to notice for street man that where road is approached the numerous economic activities like shops, hospitals, various institutes, factories, hotels, motels and filling stations start to work. The vast network of roads that is pursuing all major parts of the country, such infrastructure is much important for the progress of a region and can be verified by the authentic research publication, “ROAD INFRASTRUCTURE AND REGIONAL DEVELOPMENT”. The overall impact of motorway  is shown in the following Table-1:

 According to Padjen (1996) there are three theories that explore the relationship between infrastructure and development:

Ø  Development through a surplus of infrastructure; strong infrastructure investment more jobs  more budget surplus net debt down more economic growth.

Ø  Development through a deficit of infrastructure; more production investmentmore job in factoriesmore budget surplusnet debt down more economic growth. This can lead more investment demand in infrastructure.

Ø  Balanced development. Development of infrastructure and production is sustainable.

In Pakistan development through surplus infrastructure is used through CPEC project. This could produce following pattern of economic perspectives.

Complexities with their effects:

  • Induced Effects – changes in the accessibility and  character of a region, and
  • Catalyst Effects – impact on other policy instruments.
  • Direct Effects – analyzed through changes in employment.


ECONOMIC PERSPECTIVE: As work on infrastructure and energy projects under CPEC starts → directly increases the employment opportunities for both labour or human capital →could increase the per-capita income →which enhances the purchasing power of people → the consumption on education, health and other stock of life will increase → so demand of products will increase → this increased in demand will induce the total investment →more economic and business activities will increase → which ultimately will increase the GDP growth → that will reduce the budget deficit→ also increase in individual employment, consumption and investment will put catalyst effect which prompts the government policies by creating efficient amendments in policy instruments to stable and balance the economy. From the other side trade will increase that will balance the trade deficit and improve the balance of payments. 


Socio-economic impact of road infrastructure and motorway all direct or indirect can be seen precisely under the acknowledgement of world’s adopted theories of development with its prose and corns by following tables 2, 4.

CPEC Energy Projects can cover the Energy Crises that are the big roadblock hindering the process of economic progress of Pakistan. CPEC project’s big contribution to addressing this challenge to overcome this huge obstacle makes this project more valuable for the patriots of Pakistan. There are many projects of energy at Port Qasim Karachi, Naran, Khyber-Pakhtunkhwa, Sahiwal, at Gwadar, Balochistan, Matiari to Lahore, Faisalabad Transmission Line Project. Actively Promoted Projects are in Kohala Hydel Project, AJK, Rahimyar Khan and Gilgit KIU Hydropower and many more projects are the part of this project.

CPEC is a Source of Utilization of Unutilized Resources of Pakistan, as Pakistan has abundance of labour and natural resources, like wind power, swift flow of water, deep water of Gwadar and huge number of unutilized coal could be utilized through energy related projects. And labour abundance can be utilized efficiently under the projects of infrastructure.

Political instability is chief challenge of Pakistan that causing inflow of FDI (foreign direct investment)adversely, CPEC and ultimately the economic growth of Pakistan. All factors that are creating the political instability must be condemned by the patriotic Nation of Pakistan.

CONCLUSIVE VISION of the study is elaboration the ongoing challenges regarding China Pakistan Economic Corridor (CPEC), both inside and outside the country. These challenges sometime appear in the shape of heavy criticism on high interest rate and social changing by the opposition which could be more treacherous and harming to gain the targeted results of such big projects. It is well known concept that with progress of any society some cultural, social and economic changes will definitely accrue which should be compromise to taste the prosperity of the people and for the country. No doubt this is high financial investment oriented project, due to long term project it has high risk for the investors that is the only reason of high rate of interest on the debt is taken.

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