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The Potential of the China-Pakistan Economic Corridor (CPEC) for Pakistan’s Economy

The China-Pakistan Economic Corridor (CPEC) has the potential to significantly boost Pakistan’s economy and contribute to sustainable development. As CPEC enters its second phase, industrialization and agricultural cooperation are expected to be the driving forces. These goals align with Pakistan’s current focus on rapid industrialization and agricultural development.

Challenges in the Second Phase

However, the second phase of CPEC faces specific challenges that need to be addressed. Firstly, Pakistan has been unable to establish Special Economic Zones (SEZs) within the agreed timeframe. While the Faisalabad economic zone is partially functional, the remaining SEZs are still in the early stages, hindering the industrialization process.

Secondly, there is a lack of clarity regarding the functioning modalities of the SEZs, causing potential investors to hesitate. They require information about the incentive structure and policy framework regulating revenue from these zones.

Thirdly, investors are eager to see the establishment of inward and outward linkages of the SEZs. Unfortunately, Pakistan currently lacks a concrete plan to share with investors regarding these linkages. Additionally, there has been no study or analysis produced to help investors understand the comparative advantages of the SEZs.

Opportunities in Agricultural Cooperation

In terms of agricultural cooperation, China has offered Pakistan numerous opportunities to collaborate in different sectors. This collaboration spans from production to trade in commodities. China is willing to invest in modernizing Pakistan’s agricultural production system, including seed and fertilizer production, agricultural machinery, and manufacturing. Both countries have also signed various memorandums of understanding (MoUs) for research and scientific cooperation.

Pakistan can benefit from China’s growing food market. China is a major importer of food, with imports increasing significantly over the years. To tap into this market, Pakistan needs to ensure the quality and safety standards of its agricultural products.

Emerging Opportunities from the Belt and Road Initiative (BRI)

Another opportunity for Pakistan lies in the Belt and Road Initiative (BRI). President Xi announced a new initiative called the “small and beautiful program” during the third BRI Forum. This program aims to invest in small projects that positively impact people’s livelihoods and the environment. Pakistan can explore opportunities in e-commerce and the digital economy, opening new avenues for the business community.

Potential Benefits from the Gulf Region

The Gulf region also holds potential for Pakistan’s economy. Firstly, the Gulf countries have significant food markets due to limited agriculture and food production. They depend on imports to satisfy the local population’s food demands, making them potential partners for exporting Halal food from Pakistan.

Secondly, Pakistan can attract investment from the Gulf region, which is currently diversifying its economy. Pakistan has already signed MoUs with the UAE and Kuwait, and it is in talks with Saudi Arabia. Negotiating a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) is also a priority to further enhance economic cooperation.

Conclusion

In conclusion, Pakistan needs to implement reforms, identify economic opportunities, and focus on clearly defining the role of state-owned enterprises and the private sector. Learning from international examples of economic security can also help shape Pakistan’s approach. By tapping into the potential of CPEC, agricultural cooperation with China, the BRI, and the Gulf region, Pakistan can work towards economic prosperity and social justice, aligning with its vision for an Islamic economic system.

Source: The Express Tribune