CPEC - A Profiting Bond

China launched the Belt and Road Initiative (BRI) a de­cade ago to finance infra­structure around the world, particularly in develop­ing countries, with esti­mates of $1 trillion or more invested across 152 countries. China Pakistan Economic Cor­ridor (CPEC) became flagship project of BRI; aimed at developing infra­structure across whole swath of the country. But it is not the infra­structure alone that CPEC has fo­cused on, there have been many spinoffs that the project has gen­erated which have been the actual profit for Pakistan.

Besides infrastructure develop­ment, the socio-economic growth prong of the CPEC is of pivotal na­ture which has not only helped in betterment of Pakistani public but has also been a driving force to bring the people from both countries closer. For instance, the collaboration in the field of edu­cation especially in Khyber Pak­htunkhwa is noteworthy. There have been several Memorandums of Understanding (MOU) between the Pakistani educational institu­tions and their Chinese counter­parts which have enabled the stu­dents more from Pakistani side to seek advanced and modern edu­cation through Chinese cooper­ation. Cultural cooperation and people-to-people connections are surmounting the barriers if any, while media collaboration is in­creasing at a fast pace which will be more obvious in days to come.

The establishment of factories and industries for instance, in the Rashakai Economic Zone and the creation of special econom­ic zones at Rashakai, Dhabeji, Al­lama Iqbal Industrial City in Fais­alabad and Bostan at Pishin, to attract domestic and internation­al investors is hallmark of CPEC spinoffs. If guided through well charted policies, this arrange­ment will certainly ensure inves­tor confidence in Pakistani mar­kets. The local employment and businesses that such measures are likely to give birth are expect­ed to be astounding.

The first decade of BRI was fo­cused on the construction of bridges, ports, highways and en­ergy sources, primarily fossil fuel driven, which ensured Chinese fi­nancing of almost 21,000 projects across 165 countries with finan­cial outlay around $80bn a year. It is estimated that 80 percent of China’s overseas lending is cur­rently supporting countries in fi­nancial distress. But now China has come up with another unique initiative to further the goodwill that BRI inherently carries.

At the 2021 UNGA meet, China announced halting construction of new coal plants abroad and in­stead would step up investment in renewable energy with a sum of $10bn. It was reiterated by Pres­ident Xi Jinping at the latest BRI summit in October 2023. There is little doubt that the BRI host coun­tries, desperately need renewable energy investment i.e. six or seven fold increase in annual clean ener­gy investment say from $260 bil­lion in year 2022 to $1.9trillion by the early 2030s to meet global climate targets. Moreso, for Paki­stan because of its weak economic health, climate hazards and pow­er shortages. Whereas Pakistan necessitates shifting to alternate energy sources its less fiscal space hinders investment for climate spending thus constricting sup­port for policies that can facilitate climate investing. The good news is that CPEC has been termed as the pilot project in Green BRI. It is no misnomer that since year 2012, Pakistan has received sin­gle largest foreign development financing from China, outspend­ing the US by 1.6 times in year 2013, 7.7 times in year 2016 and 22.4 times in year 2021. Pakistan can benefit from the Green CPEC initiative making use of Chinese investment.

It is a fact that the CPEC proj­ects have not only enthused eco­nomic growth in the country but have also improved the lives and the livelihood of Pakistani citi­zens. Also, enhancing regional connectivity is one great aspect of the overall initiative. A cli­mate-driven CPEC may become the “biggest green opportunity” of the next decade of BRI. China seems to be empathetic to the de­veloping countries who are vying for collaborative climate and de­velopment partners. Pakistan is one fortunate country to have re­ceived this attention from China in the form of CPEC.

However, this is not that simple as lot has to be done on our part to understand and execute this con­cept. The environment friendly energy sources are expensive and it will not be easy for our indus­try to convert without incentives offered after overhauled financial and regulatory mechanisms. The grid system for electricity distri­bution in the country is age old and requires to be made compati­ble with the environment friendly power plants. There is also dearth of expertise, technical proficien­cy and policy formulation on the subject. The cities are over popu­lated, unclean and without prop­er garbage disposal mechanism. Recycling culture is also in its in­fancy in Pakistan. Due to owing to price hike in fuel significant rise in tree cutting and use of wood for fuel has been witnessed recently. All in all, a whole of government approach is but compulsory to develop a complete eco system around the concept so that tangi­ble benefits are reaped.

There is no denying the fact that CPEC has brought good tid­ings for Pakistan. It is not only related to infrastructural devel­opment but also the socio-eco­nomic development through human resource development and employment opportunities. Green BRI or CPEC is yet anoth­er important milestone that Pak­istan seriously needs. The ben­efits springing out of CPEC, we need to make it a profiting bond between Pakistan and China. It is up to us how much dividends can we extract to our advantage.

Reema Shaukat
The writer works as Communica-tion Strategist at the Institute of Regional Studies, Islamabad and can be reached at reema.asim81
@gmail.com