Home / This Week / Cover Stories / High time to understand CPEC’S vision and priorities

High time to understand CPEC’S vision and priorities

Pakistan can become important part of China’s futuristic technologies

On October 07, 2019, the President, Dr. Arif Alvi, has promulgated an ordinance for the establishment of the China-Pakistan Economic Corridor Authority (CPECA) to accelerate the CPEC-related activities, coordination among stake holders, timely completion of the corridor’s projects and to look for new initiatives for development. Furthermore, it would unleash the potential of inter-related production network and comprehensive and global value chains through regional as well as worldwide connectivity.

Currently Pakistan traversing the changing global power equations and the Kashmir issue and CPEC seems to be the positive way forward and hope for a brighter future for Pakistan. The magnitude of CPEC is mammoth and CPEC is still one of the largest bilateral investment projects underway anywhere in the world, today its momentum in Pakistan is being regularly out of around $76 billion, projects worth 18.9 billion dollars are already underway in; which compels Government of Pakistan to have much focused and timely actions. It’s going to be a rigorous test of Pakistan’s capabilities to harvest such opportunities. There is a question mark on the ability of the government to absorb concessionary loans and grants; hence would adversely affect the future planning as well. Apparently the Planning Commission seems to be under-resourced and under-powered.

It is the high time to understand CPEC’s vision and priorities.We must realize the challenges ahead and optimize the long term benefits. With CPEC envisioned as country-wide project, it involves all the provinces and requires a multi-party provincial structures and clear and concreate communication channels with all stakeholder including the political parties. Government must moves forward collaboratively. Strategic level of consensus-building is a must to ensure each province’s stake in the project. The government should disseminate information, effectually, about the economic impact of CPEC and take provinces into confidence in implementing business reforms. It will arm them with the right tools to get maximum benefits from CPEC.

Pakistan has the potential to attract huge Chinese investments. The government should offer tax incentives, develop better trade policies to focus on investment friendly environment. The Board of Investment is lacking a framework for SEZs. The provincial governments should be empowered to process the application of SEZs to save time and money.

As many as 700,000 new job opportunities for local people are estimated to be created by 2030 under the China Pakistan Economic Corridor (CPEC). Various CPEC projects have thus far provided direct job opportunities to around 75,000 people across the country, according to the Chinese Embassy documents. A recent study conducted by CPEC Centre of Excellence, Ministry of Planning, Development and Reform of Pakistan showed that indirectly, CPEC could help create even 1.2 million jobs under its presently agreed project. This also develops relevant upstream and downstream industries, such as raw material processing and catering industry which also provide more employment opportunities for the local people.

Chinese companies have engaged themselves in three areas to fulfill their social responsibilities in collaboration with the Chinese government. The Chinese side has proposed to conduct social cooperation on agriculture, education, medical care, poverty alleviation, water supply and vocational training. Chinese companies shared advanced techniques and successful experience to help Pakistan modernize its human resources. They also sponsored thousands of Pakistani students to study in China and sent hundreds of Pakistani engineers and professionals to China for training on scholarships. Chinese universities have set up two vocational training centers with local universities in Lahore and Quetta. China Fund for Peace and Development (CFPD) has built the Faqeer Primary School in Gwadar, which is known as “Chinese Pakistan Friendship School”.

 

The availability of productive, skilled and reasonably priced labor is an important determinant of the location for foreign investment. So far the government is not tapping the huge human capital. We are lacking in investments in the technical and vocational training resulting in the shrinking of energy and technical projects such as energy and digital connectivity. Though various Chinese companies are undertaking the Job-Specific training for semi-skilled workers, in collaboration with various educational institutions in Pakistan.

For Pakistan’s demographic structure, with a burgeoning young labor force, the opportunity to generate high-value jobs from CPEC investments is not one that Pakistan can afford to miss.

Coordination and communication is critical to connecting institutional dots. Effective communication is the overarching element of power in the 21st century, and CPEC’s scale and ambition must best be addressed with clarity. Provinces have to be given the confidence that CPEC will be transparent and equitable. Unfortunately, to this day, little is known about the government contracts signed under CPEC.

Pakistan is suffering from energy crises since more than the last three to four decades. Due to energy crises, we are directly or indirectly mediates many difficulties for facilitating the social problems and preventing social evils. Pakistan produces about 81 percent of its electricity through oil and gas which costs us about 9.4 billion dollars. It is in other terms which are about 53 percent of our total exports and are a significant cost burden on the products which we had purchased from the others countries. Our necessity for thermal power is so large, we simply cannot knock it down and magically move to hydro power. Instead of using oil and gas, both of which are getting more expensive and have volatile international prices, we can move to using coal. Thar coal is an important asset for producing power at very reasonable expenses. Energy mix refers to sources of energy we utilize in Pakistan to fulfill our overall energy needs. In Pakistan one problem that often plagues progress in global problem is the slow translation of research into practice.

China is leading?

China leads the world in emerging trends in e-mobility. It has over 200 million electric two-wheelers and recorded sales of 1m EVs in 2018 — more than the rest of the world combined. According to McKinsey, a consultancy, the success of Chinese OEMs is more pronounced in the e-bus segment — of the 97,000 urban buses sold in China in 2018, 87,000 were electric.

Beijing has a goal that one-fifth of vehicles sold in China by 2025 should be electric, which will catalyze exponential growth in EV sales and help Chinese manufacturers consolidate their strengths. Advancements in these sectors will create further synergies. For instance, 5G connectivity is necessary to commercialize autonomous EVs and robo-taxis, which will rely on artificial intelligence and fueled through renewables.

China could help us become an important player in these futuristic technologies. By aiding Pakistan in these areas to address the economic and environmental challenges it faces, China may justify its stated vision of BRI and legitimize its leadership in the developing world. So should we tone down the enthusiasm that encircles CPEC and reassess the allocation of our scarce institutional resources for better outcomes?.

The author, Mr. Nazir Ahmed Shaikh, is a freelance columnist and is an educationist by profession. Currently he is associated with SZABIST as Registrar and could be reached at registrar@szabist.edu.pk.

Check Also

Embrace CSR: a go-to guide for Pakistani businesses

Embrace CSR: a go-to guide for Pakistani businesses

While running a business entails taking care of a hefty amount of responsibilities – from …

Leave a Reply