China is moving on BRI & its related projects around the globe fast but in organized manner to achieve the Shared Prosperity goal. Recently held 10th Anniversary of BRI’s CPEC shows that the importance not only attach ed with this reject from China but also from Pakistan as a game changers for socio economic development activities in the country much needed. Recent past China’s initiative to bring closer Saudi Arabia & Iran after a decades is also the part of China’s desires to success BRI & CPEC.
Pakistan is fortunate in this regard that it already has China’s flagship project the China Pakistan Economic Corridor (CPEC), which was launched in 2013 in which a lot of work has been completed, including coal, windmills and hydropower, about more then 15 projects have been completed.
While work is ongoing on six projects, including the Suki Kinari hydro project of Khyber Pakhtunkhwa, its seventy percent work has been also completed. With the completion of all these projects, thousands of megawatts of electricity will be added to the national grid. There is a need to fix the local system to take full advantage of the electricity generated until the feeders are not updated and the damaged wires and transformers are not replaced the problems will continue to exist which is the biggest obstacle in taking benefits from CPEC. Therefore it is necessary to make better use of the help of the Chinese brothers to remove the current hurdles in the way of electricity transmission at the local level.
On the other hand, from an economic point of view, under CPEC, project like Rashakai Special Economic Zone in Khyber Pakhtunkhwa is in the stages of completion, in which 247 acre of area have been prepared and underway for investment. Several enterprises have been registered while a few have started construction of their industrial units.
Similarly, if the entire CPEC project is reviewed then the investors and the government of Pakistan will have to do their part to benefit from the above project. The fact that the phase one has been completed, raises many questions that we are not fully prepare for that dynamic scheme.
Apart from this, the tourism sector is also expected to expand. These initiatives are very promising for expanding employment opportunities for residents. Agriculture and tourism industries are considered the backbone of future growth. But the key question remains unanswered: Is Pakistan ready to reap the potential benefits of CPEC? Does Pakistan have enough soft infrastructure to attract investment in the industrial sector, especially Special Economic Zones (SEZs)? Pakistan may not have developed the fundamentals needed to reap all the benefits of CPEC Phase II.
Three conditions are needed to reap the potential benefits of industrialization and tourism: human capital (HC), rural connectivity (RC). ) and business environment (BE) that will attract foreign direct investment (FDI) and tourists. Considering human capital, Pakistan has made little progress in education and health compared to other South Asian countries. Second, Well-developed rural roads are needed to connect growth-generating sectors in different regions and achieve wider distribution of economic benefits.
They are also a prerequisite for the development of remote or environmentally difficult areas. Infrastructure investment in rural areas leads to higher agricultural and non-agricultural production, employment and income. Rural linkages with SEZs are key to creating opportunities for the poor to uplift their economic status, which is a precursor to inclusive growth.
In South Asia, Pakistan is also ranked fifth among eight countries. Indicative data shows that getting electricity (ranked 123), paying taxes (ranked 161), trading across borders (ranked 111) and enforcing contracts (ranked 156) are highly Low performance indicators.
We know that a good institutional framework, political stability and an independent legal system etc. play an integral role in improving these indicators. So not surprisingly, the quality of the institutional framework in Pakistan is very poor. To maximize the potential benefits of CPEC, Pakistan needs to improve these conditions, in which it is currently underperforming.
Pakistan needs to invest in development institutions that need restructuring to improve the legal framework, enforce the rule of law and ensure political stability. Political stability will be critical to the success of any development project and accountability process. This undermines the growth process, creates investment uncertainty, discourages international investors and discourages tourists. Where there is some good news is the government on reforms and ease of doing business. Focusing efforts are being made to implement positive impacts.
However, these reforms will not yield the desired results unless we have a stable political environment and improve the effectiveness of government.
The development of local roads and transport systems should be part of the CPEC agenda. Without creating local connectivity, roads and SEZs cannot generate the desired economic growth and employment.
As we are entering in the second phase after the success of phase one of the great project the Federal & all four Provincial governments should also proactively plan then develop local road and transportation networks. At that point human capital development should be facilitated through formal education and technical training, especially in disadvantaged districts. Consequently government should design area-specific training courses to meet local needs then it will be more fruitful for the country’s bright future.
Syed Ali Nawaz Gilani
The writer is the Secretary General of Pakistan China Friendship Association Khyber Pakhtunkhwa chapter and a Peshawar-based Senior Media Consultant. He can be reached at syeed.gilani@gmail.com