Socio-Economic Development under CPEC and Opportunities for TEVT Sector


Muhammad Muzammil Zia

The mega CPEC project aims to connect western China with Gwadar through the network of infrastructure including highways, railways, and pipelines. This corridor is an extension of “Belt and Road initiative (BRI) an idea emerged from East Asia viably changing the notion of “Globalization” into a more reliable practice to connect the world. With an investment of $62 billion, CPEC is a ‘flagship project’ which is heading towards closure of its ‘early harvest’ projects including infrastructure, energy projects, Gwadar port and industrial cooperation. In this regard, the establishment of CPEC prioritized Special Economic Zones (SEZs) including Rashakai Economic Zone , M-1, Nowshera, China Special Economic Zone Dhabeji, Bostan Industrial Zone,Allama Iqbal Industrial City (M3), Faisalabad are the growth strategy for promoting employment, trade and uplift economic growth of a country. According to ILO, CPEC is estimated to create 400,000 jobs to the country while Applied Economic Research Centre (AERC) has estimated that the mega initiative would provide around 700,000 direct jobs. The Ministry of Planning, Development & Reform shows even more promising results, with CPEC generating around 800,000 jobs in the next 15 years.

Pakistan is about to gain a lot from these opportunities as there would also be a noteworthy increase in the annual economic growth of the country. In 2018, the unemployment rate in Pakistan has been reported as 5.9%, out of which 10.4% youth is estimated to be unemployed, resulting in poverty, economic crisis, corruption and declining socio-economic status. CPEC is not only providing job opportunities but also transmitting a trickledown effect to the lower strata of the economy, hence, improving its living standard sustainably. However, it is documented that policymakers have been finding it challenging to integrate low skilled workforce into the labor market because of high risks in unemployment, economic and social exclusion. Furthermore, the economic crisis makes it difficult for the low-skilled workforce to find employment especially in advanced economies. Skilled human capital is arguably the most valued asset for the development strategy of any country. The exemplary economies like Japan and other Asian economies show the significance of human capital in the process of economic growth. Given the enormous economic and developmental changes being experienced by nations in the Asia-Pacific region, South-East Asian, Pacific Rim countries and the related migration of people between and across countries, it is critical to understand the role of human capital in the economic development of the nation and related challenges. As the global economy becomes increasingly knowledge-based, the acquisition and development of superior human capital with related skills appears essential to the country’s viability and success.

Over the last couple of decades, this has been evident that opportunities pertaining to education, training and skill level upgradation are critical with significant impact not only at organizational but national level to accelerate performance in this era of global competition. Realizing this, scholars are of the view that human beings are the most valuable of all capitals to invest in. From capability perspective of a nation, the right kind of training need assessment deems to be an important determinant of effective training to meet demands of labour market. Technical and Vocational Education and Training (TVET) is often referred as educational and training arrangements that enable people to get employed and make productive contribution in different economic areas. TVET sectors is the key to equip Pakistani youth with critically important skills to enable them not only to get employed but will also allow the country to broadly reap benefits of CPEC projects. Extant literature suggests that in vocational and technical training, an appropriate training need assessment may yield dynamic workforce, social and economic development of a country. TVETs (Technical and Vocational Education and Training) has been perceived to be “master key” in education for sustainable development by diversifying career choices through reaping demographic dividend, investing in HRD and promoting entrepreneurship for sustainable citizenship and social development.

Technical and Vocational Education and Training are increasingly becoming critical policy issues in developing economies. As it has been widely acknowledged that students equipped with right set of job specific skills are more likely to get employed and are productive to execute specialized tasks they have been trained. Many developed and developing economies have been opting for uplifting TVETs as part of their education development strategies. In this regard, proponents of human capital theory argued that individual resources, such as contribution of investment in individuals’ education may potentially improve economy of a country. Likewise, other considered training and education as the most significant investments in individual’s human capital with potential for positive outcomes for nations. In this regard, skills development is widely considered important for economic productivity, stimulating growth through innovation, and creating new jobs, whereas skill mismatch is often viewed as lack of dynamism in labor market. However, heavy investment in Technical Education & Vocational Training programs are seldom a “silver bullet”. This implies that skill development is not only important for core foundational skills (both cognitive and social) for productive employment in labor market, but also points how jobs themselves may lead to learn and shape social competencies to ignite innovation and create more jobs.

Although, Pakistan as a developing economy with rapid population growth rate and huge bulge of youth age between 15-24 years, marks significant potential for TVETs to enhance sector capacity by delivering demand-driven training opportunities to youth as per modern labor market. According to UNDP (2018), in Pakistan, 76% of youth drops out of education system due to financial reasons and look for a second chance at education. However, it is noted that output of TVETs’ services for enhancing technical and vocational education has been insufficient to meet modern labor market demands. Pakistan’s Labour Force Participation is reported low at 44% as compared to other developing economies. Resultantly, major portion of our population is left unemployed impacting education, health, and quality of life.

Keeping in view the importance the Socio-economic development plan under CPEC also emphasizes on vocational & professional educational and training including other key areas like poverty alleviation, health, agriculture and water. In TEVT sector Pakistan can collaborate with Chinese vocational and technical education colleges and universities to build intelligent classrooms, open Confucius institutes to learn Chinese language and culture, train the teachers, upgrade the standard framework for occupational qualification and develop occupational competency which also help in poverty alleviation. One billion dollar Chinese grant for socio- economic development will help NAVTTC and TEVT to equip themselves with state-of-the-art technology and training which will help the local youth get employed preferably in upcoming SEZs under CPEC. Rashakai Economic Zone is at latest stages of development, where twenty Chinese industries are expected to start operation in near future. It is expected that Rashakai SEZ will create approximately 100,000 direct and 50,000 indirect jobs therefore KPK TEVT has a key role to train the local youth supply accordingly to reap the maximum benefits.