CPEC’s & Budgetary Allocations (2020-2021)

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Dr. Mehmood Ul Hassan Khan

Despite huge budgetary allocations for the China-Pakistan Economic Corridor (CPEC) for 2020-2021 there is shock and awe in local as well as international media to target its strategic importance, utility, composition and push forward capability in the overall macro-economy.

Most recently the so-called famous economist Dr. Kasier Bengali, while speaking during a webinar organized by the Pakistan Institute of Labour Education and Research (PILER), said due to the influence from the West the government had placed CPEC in cold storage. “Pakistan’s economy is mainly relying on foreign loans, so the economic managers are trying to appease the IMF and other international lenders by not mentioning the CPEC.

On its part, Pakistan strongly dispelled the false impression given by some pseudo intellectuals and so-called economists that the multibillion-USD China-Pakistan Economic Corridor is being slowed down. Moreover, the Pakistan Economic Survey (2019-20) has said work on CPEC projects, with the help of China, is in full swing. Nine SEZs will be established under the CPEC portfolio which will create tremendous job opportunities and technological transformation.

On the contrary, CPEC has the push-forward power to rapidly upgrade Pakistan’s required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects and special economic zones. There are budgetary allocations of Rs.20-24 billion for various projects of the CPEC in federal budget 2020-2021.

According to federal budget 2020-2021 estimated cost of the Project Management Unit of China Pakistan Economic Corridor & Industrial Cooperation Development Project is Rs 339.281 million, projects related to CPEC western route purpose, Rs118 billion have been allocated. Rs24 billion have been earmarked for ML-1 & other projects of Pakistan Railways & additional funds of Rs37 billion for other projects of communication sector, upgrading and dualizing Peshawar to Karachi (1872 km) track under the China-Pakistan Economic Corridor. Dry Port at Havelian in Khyber- Pakhtunkhwa (Hazara Division) (2018-22) Phase-1, western route of the CPEC, had a potential to create 174,000 direct jobs in the country.

China is also building Pak-China Technical and Vocational Training Institute in Gwadar at the cost of $10 million. It will create job opportunities for the locals. Being prominent regional expert of CPEC & BRI, I personally believe that Gwadar will be a new economic hub of Pakistan and Asian countries and the highest GDP contributor to Pakistan’s economy.

CPEC Authority Chairman and Special Assistant to Prime Minister on Information Lt Gen ® Asim Bajwa said that Phase-II of the CPEC would be started after “full preparation and in an institutional manner”, while ensuring “full transparency”.

Pakistan and China had agreed in April on the launching of the second phase of CPEC during Prime Minister Imran Khan’s visit to Beijing for attending a meeting of Belt and Road Forum.
The second phase was then envisioned to focus on development of Special Economic Zones, agriculture sector and socio-economic development. The Phase-I of the project was mostly about setting up of energy projects and developing road networks linking Gwadar Port with Kashgar.

Gen Bajwa said that all projects of Phase-I of CPEC held up or delayed because of procedural or technical issues would be completed on a priority basis. According to him, eight power- generation projects have been completed which added nearly 6,000MW of electricity to the national grid while another nine are in the pipeline. Projects worth Rs12.5billion have been completed under Phase-I, while those costing around Rs14 billion are underway.

In the near past, the CPEC faced criticism from the United States. American officials said its projects lack transparency and had added significantly to Pakistan’s foreign loan burden. Both Islamabad and Beijing have strongly rejected US criticism as propaganda. The Foreign Office of the two countries, while rejecting US allegations, had earlier said that CPEC was transparently contributing to national development and issues in the execution of the project were bilaterally addressed by Beijing and Islamabad through existing mechanisms. It had further clarified that public debt relating to CPEC projects was less than 10% of the total debt burden.

Being regional expert of CPEC & BRI, I believe that reliance on loans would be decreased through promoting business-to-business ties between Chinese and Pakistani entrepreneurs in Phase-II. Seeking of FDIs and foreign companies and entrepreneurs partnering with local investors and businessmen would create a befitting proposition for both the countries in the days to come.

Ongoing China-India stand-off at Ladakh has once again showed strategic importance of our bilateral relations with China, a trustworthy friend. Indian move has clear-cut aim to sabotage ongoing mega project of the CPEC and harm the Karakoram Highway that is critical to CPEC.

21th century stands for commercial diplomacy which may be swayed by China through its superior economic indicators and regional alliances. BRI and CPEC have rated mega projects of regional connectivity, greater socio-economic prosperity, energy and food security, job creation and above all better political understanding. But enemies of human prosperity, regional peace and socio-economic integration have been in search of opportunity to derail the caravan of silk route.

CPEC stands for economic prosperity which would be hard to maintain in the post CoVID-19 period. According to World Bank (WB) report mega projects like China’s Belt & Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC) can prove to be growth-pullers. The WB’s report forecast Pakistan’s GDP to increase by up to 6.43pc till 2030 due to CPEC.

It is our foremost national duty to project true motives of the CPEC and do not try to sell our intellect to earn fake popularity and recognition in the West.