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CPEC – Ushering in a New Era of Potential for the Logistics Industry

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As one of the leading 3PL providers in the country, Agility has vowed to remain at the forefront of logistics progress in Pakistan. With the extensive foreign investment that CPEC is expected to inject in the country’s economy, the industrial development led by the venture will usher a new era of potential for logistics in the nation and industry veterans affirm to this view.

Of critical importance in the CPEC plan is China’s Xinjiang province in Pakistan’s immediate neighborhood. Xinjiang is China’s top cotton growing area, producing 60% of China’s cotton production. At present, the province is undergoing rapid industrialization under China’s plan of developing it into a major textile exporting hub with an investment of $27 billion in the province’s transport infrastructure for better connectivity in addition to the expansion of industrial hubs in the area. The strategic importance of CPEC for China lies in this premise; it provides a cost and time effective route for its heavy textile exports from Xinjiang to markets in the MENA region.

In the midst of this consideration, the question arises as to how Pakistan stands to benefit from this mega project which is one of the highlights of China’s One Belt One Road initiative. The reality is that CPEC is a huge opportunity for Pakistan to capitalize upon in terms of prospective infrastructural development which is expected to enhance our national production capability and establish a positive business environment for foreign investors.

As Pakistan braces itself to venture into the projects under the aegis of CPEC, it is imperative to debunk the myth that this initiative serves no benefit to Pakistan and will only allow the Chinese to take over the employment opportunities which it creates. One of the fundamental elements of CPEC lies in industrial cooperation. At present, the cost of production is steadily increasing for many industries in China due to increase in wages. Based on this aspect, 85 million jobs are expected to be relocated to various parts of Africa and Asia and with an injection of investment in infrastructure and industrial capability, Pakistani workers can benefit from these newly generated employment prospects. Even in the current projects which have been launched under CPEC, approximately a major share of the workforce belongs to Pakistan.

However, there are two sides of every coin. Despite of media fanfare and the promotion of CPEC’s vision amongst the masses, the project is still in its infancy stages and it can take up to two years for the Pakistani nation to witness its results. The condition of road infrastructure presented in the area is still in its developing stages and the construction of certain bridges and causeways along the route is ongoing. Furthermore, the Gwadar Port at present is not completely ready for port handling operations especially those involving large container vessels and other project cargo ships and further development is required to meet international standards in order to attract foreign carriers to call their vessels to Gwadar.

As the infrastructure development projects under CPEC progress towards their completion while, Chinese authorities move towards the development of Xinjiang province, this timeframe presents an opportunity for the industries in Pakistan to readily prepare themselves for the future in order to be able to fully benefit from CPEC and the FDI that it is expected to bring with itself.

Of critical importance in this area is the trucking sector of Pakistan which stands at the risk of being undermined with the influx of Chinese transporters if proper initiatives are not taken to safeguard its interests. To mitigate this risk, Agility Pakistan presents the following recommendations to ensure that not only are the interests of the trucking industry secured but are also promoted with the advent of CPEC:

CPEC has been widely publicized not only in national but the international media as a game changer for Pakistan. However, the extent to which our nation is able to capitalize on this opportunity depends upon the enhancement of our local capabilities in the sphere of logistics, trucking and supply chain management through the implementation of regulatory frameworks and policies to take this sector forward and become the backbone of CPEC and Pakistan’s economic development.

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