Recently, there have been events regarding the China-Pakistan Economic Corridor (CPEC), the first significant one being the CPEC Summit and Expo to enhance awareness about its scope, timeframe and investments. Another equally important event was the two-day conference in Gilgit. The conference titled as “CPEC: Harbinger of Prosperity” was also an effort to make people aware of the benefits of CPEC.
To oversee the progress of work, both sides have established a Joint Cooperation Committee with working groups focused on four main areas: the Gwadar port, transport infrastructure, energy and industrial cooperation. The Gwadar port is an important deep-sea port, strategically located near the Strait of Hormuz, which is world’s primary chock point. The construction work of the Gwadar port has been completed in two phases. Phase I was completed in 2006 with the construction of four berths, while to complete the construction of phase II, Gwadar was handed over to the Chinese company, China Overseas Port Holding Company. With work in progress, the total traffic remains half a million tons in 2016, while traffic is expected to double in 2017. It is estimated that in the long run traffic would be increased manifold, and subsequent development of the region would help to transform Gwadar into a cosmopolitan city providing vast opportunities to its residents.
As regarding physical infrastructure, CPEC is a network of highways, railways and pipelines. Government of Pakistan has decided three alternate highway routes: western route passing through Balochistan and Khyber Pakhtunkhwa; eastern route passing through Punjab and Sindh; while the central route crossing over the whole country. The western route, the shortest one, has been the most desired option mainly due to lesser distance, and also due to it passing through the comparatively lesser-developed provinces of Balochistan and Khyber Pakhtunkhwa. The slow pace of construction work on the western route gave rise to many controversies among provinces regarding distribution of economic projects, but to allay their concerns, federal government has from, time to time, formed various committees. The other transportation projects include the construction of new railway tracks, while the improvement of existing tracks has already been started.
Investments in energy sector are of immense importance as Pakistan has been facing a crippling energy crisis since a decade. Out of total investments, a large amount is allocated for energy projects including coal, solar, hydroelectric, LNG and power transmission. It is reported that 21 new projects would generate approximately 17,000 megawatts of energy, and out of these projects, 14 ‘early harvest projects’ would add around 10,000 megawatts in national grid by 2018. These new energy projects would help to generate economic activities.
The infrastructure development projects would enhance the pace of industrialisation in Pakistan. The proposed industrial parks and economic zones established in cities along the CPEC route would boost Pakistan’s labour market, and with the rapid infrastructure development, Pakistan’s real estate and construction sector would also grow, subsequently contributing towards the urbanisation of remote areas of Balochistan, Khyber Pakhtunkhwa and Gilgit-Baltistan.
Under CPEC, agreements between educational and technical institutions are being signed to develop human capital. Developing multicultural understanding of two societies would require a lot of effort and time, and would give rise to a higher demand for linguistics and interpreters creating employment opportunities. The CPEC route would work as an energy corridor from the Middle East and North Africa to Xinjiang, China via Pakistan, and would provide Pakistan with an opportunity to access and compete in diversified international markets.
China would also benefit from CPEC, as the most important advantage would be the reduction of China’s trade route from 12,000-kilometre existing sea route to 2,000-kilometre land route from Kashgar to Gwadar. Most of the oil shipments from the Gulf countries would be shipped via Pakistan to China, while non-oil goods could be imported to the world using Gwadar as a transit route, making Gwadar an important trade hub. It would also help to revive the Silk Route, the ancient trade route that was one of the oldest and historically important trade routes predating the Han Dynasty of China, linking the regions of the ancient world stretching from China through the Indian subcontinent, Asia Minor, Mesopotamia to the African Continent, Greece, Rome and Britain.
Apart from commercial goods, the greatest value of the Silk Route lies in exchange of culture (art, religion, philosophy, language), science, technology and architecture. Keeping in view intolerance and xenophobia in contemporary societies, such initiatives may act as a harbinger of promotion of peace and tolerance to connect people.
To benefit from economic opportunities offered through the CPEC initiative, we need to resolve inter-provincial issues on a priority basis. The federal-province relations regarding distribution of resources in Pakistan have marred many projects of national significance causing considerable economic loss. Creating awareness about the benefits of CPEC is a significant move in the right direction, but government should also promote a culture of transparency when it comes to distribution of projects for the provinces. The statistics shared with parliament show that 53 percent of the projects have been assigned to Punjab, while Sindh gets the second largest allocation of projects, and Khyber Pakhtunkhwa and Balochistan, comparatively less developed provinces, have been given a smaller share from the CPEC projects. CPEC offers enormous economic opportunities for the country if internal controversies are avoided.
The writer works at the Islamabad Policy Research Institute (IPRI) and can be reached at [email protected]