CPEC provides opportunity to Pakistan to alleviate poverty

By Kaswar Klasra 

Pakistan still has a chance to put its ailing economy back on track. What it needs to do is to develop a more developed industry to lay solid ground for its economic takeoff. To achieve the goals, China Pakistan Economic Corridor can serve as a base given that Pakistan fully utilizes its potential. 

China Pakistan Economic Corridor (CPEC) provides the industrial sector of Pakistan with an opportunity to modernize and become more efficient and competitive. The various energy projects, coupled with improvements in infrastructure and road networks, would help address some of the key constraints to growth.

More importantly, the development of Special Economic Zones (SEZs) would enable industries to smooth supply chains, enhance collaboration and innovation capabilities, and help reap significant economies of scale. With the China-Pakistan Economic Corridor brought onto the fast track of construction and major political hurdles eliminated, a final stage has come where dozens of Special Economic Zones or Industrial Zones are being built along the corridor.

This has coincided with China championing a new concept of economic cooperation – International Capacity Cooperation. This chronological coincidence is a big opportunity for Pakistan in its effort to uplift the economic performance and alleviation of poverty. CPEC has provided Pakistan an excellent opportunity to transform from an Agriculture-based economy to an industrial-based economy that can employ a great number of people thus decreasing poverty to a significant level. Economists in Pakistan believe that China Pakistan Economic Corridor (CPEC) provides the industrial sector of Pakistan with an opportunity to modernize and become more efficient and competitive.

The various energy projects, coupled with improvements in infrastructure and road networks have already addressed some of the key constraints to growth. Various projects completed under the CPEC have employed more than 100,000 Pakistanis. More importantly, the development of Special Economic Zones (SEZs) would enable industries to smooth supply chains, enhance collaboration and innovation capabilities, and help reap significant economies of scale. Analysts believe Pakistan will be the biggest beneficiary of CPEC. 

There are no empty claims. China Pakistan Economic Corridor (CPEC) has already won hearts in Pakistan. This project has emerged on Pakistan’s horizon as the biggest source of jobs for Pakistani youth. Various projects under CPEC have employed more than 75000 youth in Pakistan. As the building of Special Economic zones along CPEC gathers pace, it is expected to generate hundreds of thousands of direct jobs while millions across Pakistan are expected to get benefited indirectly. Pakistan also needs to learn a lesson from China’s five-year plan policy. 

After experiencing rapid economic growth over the last three decades, China has been moving towards a new phase of development. The overall policy direction for this transformation stems from the 13th five-year plan (2016-2020), which was adopted by the Chinese government in March 2016. The plan acts as a guiding principle to all ministries, industries, and local governments in formulating their policy goals and development initiatives to complement this new growth paradigm. The path for industrial modernization, meanwhile, draws its inspiration from “Made in China 2025” – a master plan adopted in May 2015 to turn China into one of the most competitive manufacturing powerhouses.

The objectives are multi-fold, with a focus on emerging and existing industries as well as on quality improvement and brand development. As the building of SEZs takes pace, Pakistani authorities expect the transfer of technology and spillovers from China into Pakistan in a few years. While China has already transferred coal and road construction technology to Pakistan, authorities here are expecting the transfer of technology in the pharmaceutical, auto sector, and chemicals industry which will boost the economic activity here employing a great number of people. 

Recently Pakistan and China have pledged to enhance cooperation to boost industrialization in Pakistan. Authorities are expecting the relocation of Chinese firms making pesticides and synthetic fertilizers to Pakistan. The relocation of such firms to Pakistan becomes a possibility and CPEC envisions joint ventures in fertilizer and pesticide manufacturing between the Pakistani and Chinese enterprises which will open job opportunities for thousands of graduates of Agriculture sciences. The plastic industry can see a boom in terms of investment and technology transfer under CPEC. 

Pakistan needs to take elaborate measures to make sure early completion of Special economic which are considered as the nodes of economic progress under CPEC. Inspired by China’s “Made in China 2025” policy, representations of United Business Group, a group of Pakistan’s influential traders, manufacturers, and entrepreneurs, has recently urged the government of Pakistan to promote “Made-in-Pakistan” culture in a way as China’s government is doing across the country. Pakistani needs to learn from iron friend China which has introduced “made-in-China 2025”. Pakistan needs to offer incentives to encourage local and foreign companies to set up factories and plants in Pakistan which can employ a huge number of local labor both skilled and unskilled. 

Independent analysts and experts in Pakistan believe, Pakistan can not achieve desired growth unless the manufacturing sector and exports are strengthened. Pakistan needs an export-driven growth strategy following China’s vision. In a bid to alleviate poverty China continues to implement its rural revitalization strategy and promote the steady development of agriculture and increase the incomes of the rural population. The strategy has worked wonders bringing above 800 million people out of poverty. What made the Chinese model an example for the rest of the world is that the Chinese government has made sure nobody falls back in a state of poverty. For counties lifted out of poverty, a five-year transition period will apply from the date poverty in their locality was eradicated, during which major assistance policies will remain unchanged for them.

This strategy is itself unique based on the higher principles of humanity. Pakistan, which is an agricultural economy, needs to adopt this strategy and implement it with honesty. Apart from that, China is also “resolved to ensure food security” for its 1.4 billion people, the premier added, by stabilizing the supply and prices of agricultural products, launching food saving initiatives, and developing agricultural belts. China is also working to improve working and living conditions in rural areas.

The Chinese government has announced recently that more of the revenue from land sales will be spent on agriculture and rural development, and a five-year program to improve the rural living environment will be launched, strengthening basic public services and infrastructure construction in rural areas and promoting integrated urban-rural development in counties. The world including Pakistan needs to take note of how the Chinese government is taking care of rural migrant workers. It is worth noting that the Chinese government has introduced measures to make sure migrant workers receive their pay on time and in full, and promote faster development of rural industries and strengthen county economies. 

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