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Pakistan’s economic recovery hinges on infrastructure development

Billions of dollars of investment from Saudi Arabia (to be the part of ‘China-Pakistan Economic Corridor’ popularly known as CPEC) dominated the headlines over the period of last couple of weeks in Pakistan. The government ministers on and off did acknowledge that the investment by Pakistan’s all-weather friend, Saudi Arabia, would be in the mega projects. However, the situation has unfolded now. Yes, the investment by Saudi Arabia would not be the part of CPEC and Saudi Arabia would not be a collateral strategic partner in the CPEC.

Furthermore, the amount quoted earlier for the CPEC portfolio by myriads of sources varied which now has been quoted to be $50 billion. The major chunk of the CPEC investment would be in energy projects. Well, Pakistan being an energy-deficient country needs the investment in energy projects to meet the demands of the industry and to propel the economy to a reasonable standing. Pakistan loses at least two percent of its GDP growth every fiscal year by virtue of the shortage of electricity.

Saudi Arabia has given a nod of agreement to set up a 500,000 barrels per day refinery by investing $8 billion at Gwadar, which would surely help Pakistan curtail its oil import bill which is worth $16 billion per year on average. Moreover, there might be investment worth $15 billion in a mega project like Reko Diq (yet to be made official).

There is no uncertainty regarding the third country participation in the CPEC: it could be Saudi Arabia, Japan, Germany, etc. Here, the question arises regarding the participation of Japan in CPEC. Would it be acceptable to China? DOES NOT SEEM A VIABILITY. No one on earth would buy this that Japan and China would work together, however, nothing could be ruled out.

Japan, a hi-tech economy, is investing in Jordan, Egypt, Syria, Iraq, Palestine, Libya and Yemen and has got financial muscles since it is the third largest economy of the world after USA and China. Japan can be a very helpful partner in infrastructure development of Pakistan. Japan’s fast, efficient and innovative transportation networks rate Japan as a country with one of the most modern transportation infrastructures in the world.


Germany, the largest economy of Europe and the fourth largest economy of the world, has made tremendous investment in its infrastructure since the country reunified in 1990. Besides, investing in infrastructure projects in Pakistan, Germany could establish auto manufacturing facilities since it has rich experience with its world-renowned brands such as Audi, BMW, Daimler AG, Opel, Volkswagen, etc.

Whether it is Saudi Arabia, Japan, Germany or any other country with a massive interest in CPEC related investment, Pakistan needs to ensure that special economic zones would play an undeniably dazzling role in the economic growth.

China-Pakistan Economic Corridor would ratchet up Pakistan’s trade with China, Iran, Afghanistan, India, Central Asian countries as well as with other countries in the region. Besides, having the status of strategic country in the region would further augment the standing of Pakistan in terms of being a significant player. The economic gains of transit fee would play a pivotal role for the economy of Pakistan as.

The fake news regarding the rolling back CPEC might be a strategy of the nemesis who have reservations and think that Pakistan’s significance would skyrocket manifold due to world-class infrastructure and the interest of the regional powers would be in the prosperity of Pakistan. Undoubtedly, it is blessing of God that Pakistan has got a strategic location and is going to play a whopping role in the world trade.

Pakistan needs to take aggressive steps to improve quality of infrastructure since it is among the lowest ranked countries in global infrastructure ranking. CPEC might be an opportunity in this regard and the participation of other countries in this regard should be more than welcome since infrastructure amelioration of Japan and Korea in 1960s and 1970s made them economic powerhouses not only in Asia but also in the global arena.

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