Daily Times

A good four years have passed since the launch of the China-Pakistan Economic Corridor (CPEC), whose investment portfolio is estimated to be around USD 60 billion. The latest reports are that most of the 22 projects, worth USD 19 billion, have been completed or are reaching completion. These projects were envisaged under Phase I of the project, aimed primarily at alleviating the shortage of power supply and enhancing/improving the transportation infrastructure of the country.

Over this time, there has been criticism over CPEC, coming from certain quarters, because huge expenditures have been made in these two sectors. Little has been done to give a boost to Pakistan’s economy, transfer technology and create employment for the locals. Recently, there were apprehensions that CPEC was no more a priority area for Pakistan’s new PTI government. This perception did gain strength from some statements about the proposal to halt this project for some time and conduct an audit of its components. Anyhow, the new political setup soon realised such statements coming from its representatives could be counterproductive and advised them to be careful in future.

The author once asked this question from a senior Chinese diplomat based in Islamabad. He did not take much time to respond and said the perception of China unilaterally deciding about the areas for investment in Pakistan was wrong. He clarified it was the government of Pakistan that wanted investment in the power sector and road infrastructure first and then in other sectors, which depended on these. Without developing energy and transportation infrastructure sectors, both Pakistan and China could not think about developing other sectors, such as industry, mining, agriculture and cargo handling. Parking investment in these sectors right away would be like putting the trolley before the horse, he added.

The CPEC Phase II will provide a window for industrial cooperation, help establish many SEZs in Pakistan, create opportunities for Joint Ventures (JVs) and offer employment opportunities to the locals

Having said this, one must realise the time has come to raise this question once again. With Phase I of the CPEC almost complete, the question about what lies in store for Pakistan and its people during Phase II becomes pertinent. It is the phase during which the country expects the development of Special Economic Zones (SEZs), relocation of Chinese industries to Pakistan because of certain advantages this option offers, technology transfer, creation of employment opportunities, increase in country’s exports to China and other parts of the world, etc. Significant investment in the social sector and welfare projects is also expected in this phase.

So, the challenge here is the government of Pakistan must be aware of this fact and alert while negotiating with China on the form and details of new projects under Phase II.

But before looking into the future, let us see whether the investments in Phase I of the CPEC have yielded the expected results. If yes, to what extent and if not, why? The projects carried out during this face include Dawood Wind Farm (50 MW), Pakistan Jhimpir UEP Wind Farm (100MW), Three Gorges Second Wind Power Project & Three Gorges Third Wind Power Project (50 MW),Quaid e Azam Solar Park (300MW), Bahawalpur, Port Qasim Coal Power Plant (2×660MW), Sahiwal Coal Power Plant (2×660MW), Engro Thar Coal Power Plant (4×30MW), Thar Mining Field Block II, China Red Cross Society’s Emergency Care Center, Gawadar, China Pakistan Faqeer Primary School Project, Gawadar, 820-kilometer Cross Border Optical Fiber Project, Multan-Sukkur Motorway M5 and China Power Hub Generation Company (CPHGC) Coal Power Plant (2×660MW), Hub, Balochistan.

There are different opinions about the benefits or drawbacks of these projects. Some people term these a burden on Pakistan’s economy because they think Pakistan will find it hard to pay back the debts. However, others believe these sectors are engines of economic growth and will help generate enough resources to pay back debts as well as earn good profits. They say the country now has surplus energy and word-class transportation infrastructure, which were just a dream a couple of years ago. Again, their emphasis is on the fact that Pakistan must play smart and negotiate in a way that there is a win-win situation for both the countries in this phase.

The CPEC Phase II envisages 27 projects that will start shortly. It is expected this phase will provide a window for industrial cooperation, which will help establish many SEZs in Pakistan, create opportunities for Joint Ventures (JVs) between businessmen of the two countries, offer employment opportunities to the locals and so on. Development of agricultural and tourism sectors are also an expected outcome.

During the research work for this write-up, the author took up this issue with the Deputy Counsel General at the Chinese Consulate Lahore and other Chinese officials there. They responded with a claim that Phase II will not only bring benefits for Pakistan but the dividends of Phase I project will also contribute a lot to the country’s economy and the well-being of its people. Their point was that the already built CPEC Phase I project will give taxes worth billions to the country every year. They added the implementation of the revised China-Pakistan Free Trade Agreement would open 90 per cent of the Chinese market for Pakistani products. They also mentioned that around 28,000 Pakistani students were currently studying in China and 20,000 scholarships will be offered to Pakistani students by China over the next three years.

The Chinese diplomats hoped that SEZs would be the locomotive of industrialisation and modernisation of Pakistan. Following continuous investment and development, Gwadar Port will become Pakistan’s Shenzhen. Besides, they said, CPEC Phase II will bring a more balanced development of Pakistan. More and more projects will be rooted in the western part of the country to give benefit to the populations living there as well. Modern industry and advanced agriculture will offer new job opportunities and solar-electrical facilities and comfortable housing. Better education will create more convenience and happiness to rural people.

The clarity with which the diplomats dwelled on the issue hints at the fact that China is ready to help Pakistan overcome its economic and social sector woes and take it along in the journey to progress. The onus now is on Pakistan to get the maximum from this opportunity. Good news is that the sitting PTI government has shown its seriousness towards CPEC by deciding to fence the border of Pakistan and Iran to make the region secure. It is a difficult decision but the government has taken it to give a safe and conducive environment to the Chinese people companies coming here. Pakistan has also asked the Chinese to relocate their industries, especially the textile industry, here and use Gwadar Port for exports. If this happens, it will be a huge step on the path to the economic revival of the country.

The writer is a freelance journalist, peace activist and a research scholar