The China-Pakistan Economic Corridor (CPEC), a cornerstone of Pakistan-China relations, is poised for a significant upgrade. During Prime Minister Shehbaz Sharif’s recent visit to China, a series of ambitious agreements and memoranda of understanding (MoUs) were signed, marking a new phase in this strategic partnership. how the upgradation of CPEC will boost Pakistan’s economy, with a focus on its broader impacts on developing countries.
The Strategic Partnership
Prime Minister Sharif’s visit to China underscored the “Pakistan-China All-Weather Strategic Cooperative Partnership.” High-level meetings with Chinese President Xi Jinping and Premier Li Qiang resulted in a commitment to several new corridors, including growth, livelihood, innovation, and green corridors. These developments are expected to enhance the existing infrastructure and power generation focus of CPEC’s first decade.
Key Upgrades in CPEC
Infrastructure and Connectivity
One of the primary focuses of the CPEC upgrade is the rehabilitation of the Karakoram Highway and optimization of the Gwadar port. These projects are critical for improving trade routes and enhancing connectivity between Pakistan and China, and by extension, with other parts of the world. Improved infrastructure will reduce transportation costs and increase trade efficiency, thus boosting economic activity.
Industrial and Economic Zones
The signing of an ‘Action Plan for Framework Agreement on Industrial Cooperation’ aims to encourage Chinese companies to invest in Pakistan’s Special Economic Zones (SEZs). The establishment and operationalization of SEZs are crucial as they can attract significant foreign investment, generate employment, and boost industrial output. However, progress has been slow, with key SEZs like Rashakai and Dhabeji still under development. Accelerating the development of these zones is vital for reaping the benefits of foreign investments.
Technological and Educational Enhancements
The Chinese commitment to train 1,000 young Pakistanis in tech and agriculture annually, along with Huawei’s initiative to train 200,000 Pakistani youth in IT, is a major step towards digitalizing the Pakistani economy and promoting e-governance. These educational and technological enhancements will create a skilled workforce capable of driving economic growth and innovation.
Security Concerns
Despite the promising developments, security remains a critical concern. There have been several terrorist attacks targeting Chinese nationals working on CPEC projects. Ensuring the safety of foreign investors and workers is paramount. The joint statement emphasized a “zero tolerance” approach to terrorism, highlighting the need for robust security measures and counterterrorism strategies.
Financial and Economic Implications
The upgradation of CPEC comes at a time when Pakistan faces financial liquidity issues. While China has been supportive in rolling over loans, there is a growing expectation for Pakistan to utilize these funds effectively and generate wealth to repay them. The success of CPEC’s new phase depends on Pakistan’s ability to create a conducive business environment, reduce bureaucratic hurdles, and facilitate private sector-led growth.
Global and Regional Impacts
Impact on Developing Countries
CPEC’s upgrade has significant implications for developing countries, especially in Asia. It sets a precedent for large-scale infrastructure and economic projects, showcasing the potential benefits of international cooperation. By enhancing connectivity and trade routes, CPEC can stimulate economic growth in the region, providing a model for other developing nations to follow.
Geopolitical Considerations
The deepening Pakistan-China ties through CPEC also have geopolitical ramifications. As the United States and China vie for influence in Asia, Pakistan’s strategic alignment with China could shift regional power dynamics. This partnership might also attract other countries to participate in CPEC, further enhancing its scope and impact.
Upgradation of CPEC
The upgradation of CPEC represents a pivotal moment for Pakistan’s economy. By focusing on infrastructure, industrial cooperation, technological advancement, and security, Pakistan can leverage this opportunity to drive economic growth and development. However, the success of these initiatives hinges on creating a favorable business environment and ensuring the security of foreign investments. As CPEC enters its second phase, it holds the potential to transform Pakistan’s economic landscape and set a benchmark for regional development and cooperation.
