The China-Pakistan Economic Corridor (CPEC) for the South Asian region will yield to be an effective strategic and economic milestone and once successfully in place, will be a model of commercial success. Around the world, economic corridors are developed and designed to stimulate the economic development in that region.

Essentially an economic corridor consists of a network of roads, rails and relevant infrastructure that stimulates economic activity by mobilising effective and efficient movement of goods and services. However, it is more technical than mere formation of roads and its surrounding modalities. These corridors are meant not only to facilitate movement of goods or services but also human resource as part of exchange of information. Research and practical experience in Europe and Africa have shown that economic corridors comprise of both hard infrastructure (e.g. highways, roads etc.) and soft infrastructure (e.g. trade capacity building and trade facilitation). Economic corridors are best defined by their characteristics, and it is through their characteristics measurement that economic corridor performance can be determined and monitored out of which one comprises majorly of mobility, accessibility and connectivity, which are important subsets for sustenance and functionality of the economic corridor.

CPEC is a major economic tool that will stimulate social and economic activity throughout the route of the surrounding areas, across which this corridor passes. Economic ‘value additions’ encompass anything that will reap profit and ultimately maximise on its viability. This can take the form of raw materials, processed/manufactured goods or services. One of the main methods utilised for bringing value added goods is through mobility. For example, premier Pakistani oranges produced in district Sargodha, when transported to a major city such as Lahore, will inevitably increase in value due to higher demand and supply components, greater outreach in terms of market connectivity and accessibility of the final product to the local consumer. Such value additions need to be handled with standardisation, quality packaging and proper handling of goods.

Time-sensitive goods and perishable goods such as fruits will spoil if they are delivered to the market either too late or if their quality does not meet required, technical standards. However, the case for non-perishable goods may be different. It is in fact this speedy access to the markets of Pakistan, China and beyond shall be economically useful only if Pakistan generates value additions along the way. For this one of the biggest challenges for Pakistan will be to ensure skilled labour force as mere mobility or transport of goods or services will be futile on its own.

Provision of energy and skilled labour is critical despite the existence of Gwadar Port and the current patchy network of rail and roads. To maximise on the opportunities the CPEC offers arrangements of value additions along the corridors will be essential. Fortunately, the corridor shall pass through all four provinces of the country. Value additions can largely be performed in industries/factories and therefore an easy, fast yet a quiet access to a larger market can be provided to all value added products along the route envisaged. It is this addition that opens up Pakistani produce to a large dynamics of trade networking and maximising on the real value of the corridor. On existence of economic corridors Asian Development Bank positively states, “Economic corridors provide important connections between economic nodes or hubs. These corridors should be economically diversified, providing good opportunities for synergies that promote development, such as production networks that link small and medium enterprises to global value chains.”

A network of industries and industrial zones, which will be a 50km zone on either side the road – comprising 100km from Gawadar to Kashghar, is the belt of opportunity, which needs to be established along the route of the corridor. For this land use planning needs to begin straight away, in order to maximise on its economic potential. Having industrial parks will not stimulate economic activity unless there are two adjoining cities that provide human resource and the consumer market. The successful economies of the world have developed massively not through building their industrial parks or zones away from cities. It is pivotal to understand that ‘industry’ comprises of services industry as well. Resultantly, the demand for quality education, health and vocational training services are required to be developed alongside the corridors for skill development and future research and development in the region. This will automatically lead to attracting education tourism from the neighbouring countries.

It is essential to realise that the above measures for value additions and economic activity require massive consistent effort at building capacities and human resource development of the relevant institutions. Furthermore, better overall logistics chain efficiency is strongly associated with trade expansion, export diversification, attractiveness for investment and economic growth. Unless such measures and efforts are not materialised the CPEC will just be China Economic Corridor “through” Pakistan instead of being China-Pakistan Economic Corridor.

The author is the CEO of the Urban Unit, Planning & Development Department, Government of the Punjab.