The second phase of the China-Pakistan Economic Corridor (CPEC) has a number of game-changing developments that could breathe new life into the project and revive the private industry of Pakistan.

In a consultative forum on draft framework agreement on industrial cooperation, it was revealed that Pakistan and China had decided to elevate the role that the industrialists, private sector, and business community would lay in this industrial agreement between the two countries. The framework is being expanded to include the development of special economic zones (SEZs). In the Board of Investment Chairman Atif R. Bokhari’s words, the first phase of CPEC required the primary role of the government, while the second phase requires a much larger shift in management and roles, by the private sector. Accordingly, now that the project is entering into the second, and more ambitious phase, the government’s role will be diminished to a more regulatory and policy drafting one.

This is an ambitious development but a smart one. It cannot be denied that there were certain lags in the first phase- increasing the role of the private sector and industrialists, while still having a strong government presence by way of oversight, is a way of smoothing out those creases and fast-tracking work on the project. If the government negotiates wisely and identifies the correct public-private partnerships to establish, then introducing more private industry can boost opportunities for employment and labour as well. This boost to the private sector can help bring the economy back on track.

If both countries play their cards right, then this second phase can be a wonderful mutually beneficial opportunity for a productive transfer of information, education and technology. Relocating Chinese businesses can boost skill development and labour productivity, as long as the Pakistani industry is also keeping up. The government must utilise and follow through on these exciting developments carefully.