Farhat Ali
China Pakistan Economic Corridor (CPEC) is all about connectivity, energy availability, infrastructure development and development of special economic zones. And all these are the assets of Pakistan paid for against loans from China. They make Pakistan an attractive place for investors to invest in and to do business with.
CPEC could become a game-changer for Pakistan if it could comprehend CPEC’s value and develop the competence to club it together and truly exploit it to draw a wider spread of local and foreign investment to be channeled for the country’s economic development, then CPEC can truly come up as a game-changer for Pakistan.
The change starts when the availability of energy, establishment of special economic zones, development of the infrastructure and connectivity in the country and the region is presented to investors as a paradigm shift from the perception of Pakistan, a country riddled with acts of terrorism to a destination conducive to investment with availability of what an investor looks for.
The CPEC, much against the reality, is perceived as a China centric initiative driven by China to its advantage, thereby giving rise to perceptions that it will be another East India Company with political and economic dominance over the affairs of the country.
The only exclusive footprint China so far has in Pakistan is restricted to its domain in an enclave in Gwadar comprising the port, the container terminal and an economic zone leased out to it for a period of 4O years. The rest is all under the influence of Pakistan. The projects awarded to Chinese companies are funded by the Exim Bank of China, while open business is driven on the principles of free market. A free market is where the best wins, in which the Chinese are increasingly competing. This in a nutshell is the political and economic dynamics of CPEC.
Up to now, the government of Pakistan had not been able to present the CPEC in its true perspective, neither domestically nor globally, which is leading to confusion and apprehensions
It is reported that the first think tank under official supervision for undertaking research on different aspects of the China Pakistan Economic Corridor was established this week with the mandate to go ahead with doing research in six major areas.
This is a good step if it is directed towards maximizing and structuring the gains for Pakistan out of CPEC. The Minister for Planning, Development and Reforms, Ahsan Iqbal, inaugurated the CPEC Centre of Excellence in Islamabad last Monday. The Centre will conduct research on six thematic areas of CPEC, including (1) the socio-economic impact of CPEC (2) CPEC Trade and Industry Cooperation (3) Regional Connectivity under CPEC (4) Financing and Financial sector integration under CPEC (5) Urban development in Pakistan under CPEC and (6) Job growth and human resource development.
Speaking on the occasion, China’s ambassador Sun Weidong said that supporting Pakistan’s economic sector was an important manifestation of CPEC. CPEC, he said, was aimed at modernizing Pakistan with four pillars: Energy, Infrastructure, a state-of-the-art Gwadar port, and industrialisation. He said he hoped that around 11,000MW of electricity would be generated as a result of early harvest energy projects under the CPEC portfolio.
The ambassador also referred to positive reports on Pakistan by international financial institutions and publications which had noted the economic turnaround of Pakistan. He further said that the CPEC Centre of Excellence is going to be an interface that will engage with other research institutions and think tanks with the aim to provide technical input for identifying more potential areas for Sino-Pakistan multi-sectoral cooperation.
Federal Minister for Planning Ahsan Iqbal said that the Centre of Excellence will provide evidence-based policy suggestions to extract maximum benefits out of CPEC.
It will integrate and coordinate the institutions engaged in implementing CPEC by ensuring excellent research, utilising modern techniques to help us in policymaking and achieving our goal of sustainable growth and development, he added.
“The CPEC is an economic big bang which turned Pakistan’s profile from a most dangerous country to a safe haven for billions of dollars of Chinese investment,” he added.
The minister said that those who claim that China would prove to be a next East India Company are giving shallow arguments. “Pak-China relationship is 68 years old and now after CPEC, the friendship is much higher than the stars. So why would China erode this goodwill at the cost of money?” the minister said.
He dispelled the impression that the CPEC would create a burden and would negatively impact the industrial sector, saying that it will restart Pakistan’s export engine. “We should work closely with Chinese to learn innovative techniques and quality. Industry cooperation would double the capacity of Pakistani enterprises.”
The minister’s rhetoric of providing exclusivity to China is restricting Pakistan’s wider exploitation of CPEC and the investment mix to which Pakistan is entitled, as is China. Also, this exclusivity is invoking apprehensions, as highlighted above.
Some of the local and foreign entrepreneurs opted to be proactive and on their own in capitalizing on the business potential offered by CPEC. Habib Bank Limited (HBL), which opened its branch in Urumqi, is eyeing opportunities connected with CPEC. Xinjiang is the starting point of the CPEC, which links the region with the Gwadar Port in Pakistan.
Early this week, the Swiss Business Council (SBC) together with the Swiss embassy in Islamabad, held an event in Islamabad titled “Opportunities for the European Investors in Pakistan,” which brought together ambassadors from most of the European countries, the Sindh, Punjab and KP Boards of Investments and the government functionaries to work out the European participation in CPEC. Europeans are the largest foreign direct investors in Pakistan and the backbone of Pakistan’s economy in terms of FDI, revenue generation for the government, transfer of technology and human resource skill development.
The China Pakistan Economic Corridor offers huge investment opportunities and European investors need to take advantage of opportunities and make investment in the game changer project. Speaking at a media briefing here on Tuesday, Swiss ambassador to Pakistan Marc P George and the president of Swiss Business Council, Farhat Ali, stated that the European investors must capitalize on this opportunity.
They said that the perception that CPEC is a China-Pakistan project has now started changing with foreign investors viewing beyond that as it would provide connectivity to Europe. The Swiss ambassador said that he is a great advocate of Pakistan in his country as well as among European diplomats. He said this is good time to start discussing the project and how Europe can benefit from it. Similar is the thinking of other European and OECD countries.
Pakistan too needs to be proactive to tap these positive developments and achieve a good investment mix.
(The writer is former President, Overseas Investors Chamber of Commerce
and Industry)
