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Industrial phase of CPEC to bring new opportunities and challenges for local industry

Around 36 economic zones being set up in various areas; skill development work on the rise

The inception of a new development era with the China-Pakistan Economic Corridor (CPEC) has opened up vistas of opportunities for local and international investors.

The accomplishment of 12 energy projects by 2017-18, the emergence of Pakistan as the fastest growing Muslim economy by 2017, positive body language of foreign and international companies to invest in Pakistan, more than two million job prospects with CPEC, dramatic cutback in terror activities, curtailing energy crisis issues, scaling down poverty to record numbers compared with past years, the powerful initiative by the Chinese founder of a major business-to-business website to invest in Pakistan’s technology sector, are a few successful feats that the incumbent government should be fairly credited for.

Analysts believe there is a dire need that we build ourselves as a fast-growing economy, a peaceful nation with people that believe in growing constantly. By focusing on our IT sector, employment opportunities will be high and it will come handy to offer financial independence to all age groups. Our government, the planning ministry, and other relevant departments have to step forward, promise security to investors, bring life to the struggling economy and support Pakistan to become a country that appeals to every international company for investment, they said, adding: “China Pakistan Economic Corridor (CPEC) is set to take Pakistan to new horizons on economic front. CPEC which is not just a corridor of connectivity to bring the places closer but a project of immense potential bound to change the destiny of the whole region. One of the most important phases of CPEC is its industrial phase which will start soon and under it, 36 Economic Zones will be set up in various areas of the country.”

According to them, CPEC is geared to usher in new job opportunities, enhanced exports, more foreign exchange, burgeoning trade activities, and a number of other financial aspects of the country set to materialize during the upcoming industrial phase.

Positive development is that the leading provider of international investment decision support tools – MSCI has reclassified its Pakistan Index to the higher status of ‘Emerging Markets.’ MSCI is expected to announce this decision at the “Semi-Annual Index Review in May 2017. The decision will upgrade Pakistan from the stature of ‘Frontier Markets’ to ‘Emerging Markets’ and is expected to generate inflows of global portfolio investment, amounting to $475 million by the middle of 2017. This was stated by EFG Hermes – an Egypt-based investment bank.

The All Pakistan Business Forum (APBF) has lauded this positive development and congratulated the nation, for ensuring that Pakistan’s economic output is rising at a healthy pace. Global institutional investors use different MSCI indices – such as frontier, emerging, China and US markets – to create balanced portfolios to generate maximum returns while keeping in view their overall risk appetite. Emerging markets attract far more funds than frontier markets.

The President of APBF Mr. Ibrahim Qureshi stated that: Over the past few years, economic dynamism in the global economy has gradually been shifting—from advanced economies to emerging markets. Today, the emerging economies comprise of 85 percent of the world’s population, while contributing almost 60 percent of global GDP. While the global recovery has been subdued, emerging economies have contributed more than 80 percent of global growth since the crisis. In the current scenario, Pakistan’s inclusion into the Emerging markets is a tremendous achievement. It will create many new opportunities, despite the challenging environment.”

MSCI communicates its conclusions, based on discussions with the international investment community, on a list of markets under review every June. MSCI announced last year that Pakistan was on its list for possible reclassification in view of improvements in transparency and liquidity.

Although the actual reclassification of the index will follow next year, global investors tend to start factoring in the reclassification ahead of the actual change, which prompts massive inflows of global funds in the case of a favorable decision.

The benchmark index of the Pakistan Stock Exchange has already gained 15-percent this year, making it the best performer in Asia. “The gauge has climbed 4.2 percent this month, compared with a 0.4 percent fall in the MSCI Emerging Markets Index.”

Pakistan was part of the MSCI Emerging Markets Index between 1994 and 2008. However, the temporary closure of the Pakistan Stock Exchange in 2008 led MSCI to remove it from the index and classify it as a “standalone country index”. MSCI made Pakistan a part of the Frontier Markets Index in May 2009 and it has remained as such since then.

As per estimates under recently enhanced version of CPEC, about 2.3 million jobs for skilled and professional staff will be created through different ventures. Jobs for semi skilled and unskilled persons and indirect jobs will also be in millions.

Leading businessman Mian Tanvir Soofi told PAGE that the CPEC has given us a new hope and opportunity to grow and compete in a competitive environment where world is a global village. The Industrial phase of CPEC will bring new opportunities as well as challenges for the local industry, he opined.

Expressing optimism, Soofi said, “Most of our industrialists will gain substantially from various projects under CPEC due to huge potential of growth in the country and its vast resources.”

 “Our industrialists need to understand working pattern of Chinese first and then we can formulate our action plan. We can enter into joint ventures with Chinese or in our individual capacity. This can only be possible, if the authorities don’t ignore interests of local industry while making agreements under CPEC”, he stressed.

Pakistan needs to make efforts to prepare work force for availing maximum benefits from Industrial phase and other ventures under CPEC.

As per data available from Punjab government as many as 2.143 million skilled graduates will be ready in the province by the year 2018. Regular and private sector training under TEVTA will train 541,128 persons, Punjab Vocational Training Council (PVTC) 480,000, Punjab Skills Development Funds (PSDF) 225,000 private sector self (Affiliated colleges) 140,000 Administrative Departments Training and Higher Education department 298,814. Livestock and Dairy Development Department 160,800, Health Department 62, 072, Agriculture Department 30,638 and Mines & Minerals Department 4, 720, Total for Administrative Departments 557,044 persons.

The way forward for Pakistan is the same as adopted by Chinese nation–education, skill development and best utilization of all the resources, human resource atop.

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