Tuesday, September 19, 2017

CPEC’s realities

http://dailytimes.com.pk/opinion/20-Sep-17/cpecs-realities


To keep CPEC project transparent and corruption free, National Accountability Bureau (NAB) and Beijing have entered into an agreement

20-Sep-17by Yasir Habib Khan


Reality always bites. First reality is that on ground Pakistan is in position to receive multiple gains if it let CPEC effects trickle down to grass root level establishing backhand linkages with local industry so as to transform Pakistan from consumer-based economy to export-oriented economy.

Second reality is that China has not imposed CPEC rather it has been welcomed warmly by Pakistan government looking into its own interests and economic value.

Since 2013 till date, everywhere voices are running amok what CPEC promises as a fate-changer for common man and local businesses is just eyewash. Some claim that China launched CPEC for its own personal benefits rending little incentives to Pakistan. Perception also goes rampant that Chinese companies have purchased thousand acre lands on very low prices and Pakistanis will have meager share in jobs being generated through CPEC related projects.

This buzz appears to be part of sceptic hypothesis that disappear when it comes to talk on documented and pragmatic terms. So far despite brewing qualms, all is set to finalize blanket incentives schemes equally beneficial for both local and Chinese businessmen in all stipulated nine Special Economic Zones (SEZs) under the umbrella of China Pakistan Economic Corridor (CPEC).

Seeking inspiration from 2013 incentive policy and Gawadar free zone industrial policy, Initial contours of SEZs reveal that, contrary to speculations, Chinese and Pakistani businesses will be given level playing field to purchase land 


To keep CPEC project transparent and corruption free, National Accountability Bureau (NAB) and Beijing have entered into an agreement. A combined investigation team (CIT) will facilitate quality of work. In another step to prevent any financial irregularity, Pakistan government is not using its accounts for monetary transactions regarding CPEC under specific modality of funds management.

Initial contours of SEZs, seeking inspiration from 2013 incentive policy and Gwadar free zone industrial policy, reveal that contrary to speculations, Chinese and Pakistani businessmen will be given level playing field to purchase land in SEZs. Mode of mechanism, in major cases, will be cantered on joint venture, public private partnership, private or public. It is highly likely that SEZs will set equal employability formula between Chinese and Pakistanis. Already employment proportion may be seen in two infrastructure projects. KKH phase II and Sukkar-Multan section engage 70 percent Pakistani and 30 percent Chinese workers, as per official data of CPEC.

Zones plan never differentiate between Pakistani investors and Chinese investors in dishing out tax breaks, exception to sale tax, excise tax, custom duties, financial arrangements, concessional utilities like electricity, gas and water, educational and health facilities, capacity buildings for skill enhancements, special course and training for skilled and semi skilled workers. SEZs will cater both low-end and high end products keeping in view targeted items to prevent market saturation. Provinces, AJK, Gilgit-Biltistan and Fata will have SEZs each. Federal government will host two SEZs. They will be in Rashakai (KP), Dhabeji (Sindh), Bostan (Balochistan), District Sheikhupura (Punjab), Port Qasim Karachi and Islamabad (Federal Govt).

How CPEC myth is debunked can be weighed up easily in exploring various cases. One of them is when asked to Muhammad Ali Mian, president of Pakistan Plastic Manufacturer Association president and member of Punjab Industrial Policy says that CPEC’ SEZs will benefit if thrust is given to foster high-tech industry relating to IT, agriculture, chemical, auto, textile and livestock and so on. He welcomed gesture of equal employment formula. When asked he claims “I personally witnessed that Gwadar port has low number of Pakistani and high number of Chinese manpower working there. But he declined to prove it through documented and other substantial evidence.

CPEC Project Director Hassan Daud Butt eloquently illustrates that none Chinese company has purchased any land in CPEC related projects. Rebuffing visa free facility to Chinese, he asserts that incentive plan never discuss such concession. Pakistan government has never granted any concession to Chinese companies for import of goods for CPEC projects that may take a heavy toll on interests of local manufacturers. Majority of CPEC projects relating to power and management sector are being executed by big number of Pakistani engineers and workers. If dive into details to explore windfalls for Pakistani people, it appears that Pakistani industrialists and entrepreneurs enjoy similar incentivised package under the Finance Act 2016 granted to Chinese investors and companies in Gwadar free zone.

Under CPEC, Gwadar known as most backward area in Pakistan, has now its own first state of art emergency hospital to provide best medical facilities to local population free of cost. Gwadar port city also features now an advanced primary school where enrolment swells from 150 to 300 pupils in short span of time. MOU is soon to be signed for development of first Gwadar University. Resolving the long-standing drinking problem, water supply system and fresh water treatment plant are being materialized.

Besides offering Chinese language courses and various technical program to help Pakistan man force to be competitive for CPEC initiatives, Technical Education and Vocational Training Authority (TEVTA) gears up to establish Pakistan’s first University of Technical and Vocational Education (UTVE) in Punjab in collaboration with Tianjin University of Technology and Education (TUTE).

TEVTA will help Pakistani youth to increase their employability chances in thousands of CPEC related projects and even in international market.

CPEC has potential to generate around 0.1 million jobs for locals. Another benefit people are going to relish is the making of health corridor under which joint examination board (JEB) to be set up allowing Pakistan students (who got MBBS degree from China) to start practice in Pakistan without going through the process of National Examination Board (NEB).

KP government has also established CPEC job cell to accommodate local manpower. KP technology park promises employment to more than 10,400 IT graduates yearly. To support the CPEC investments and technological developments KP plans to sponsor 300 IT graduates at the leading Electronic Manufacturing Services firms in China.

In order to develop CPEC knowledge corridor, recently a consortium of top five Pakistani business schools has been formed. It aims to cater demands of CPEC’ market and businesses conducting advanced researches for capacity building and ensure students consumptions as per requirement. With approximately $ 62 billion initiative, real estate sector that lost its steam due to new taxes and capital flight to Dubai market is back to business.

Beside Balochistan government, private builders and developers across Pakistan have launched many housing schemes As a result, land prices have seen a three time surge. Searches for Gwadar property on online property sides have escalated.

 

The writer is a senior journalist working for China Radio International Online and South China Morning Post. He is alumni of ICFJ and award-winner of China friendly Netizen 2017. He pitches articles on diplomacy, security, economy and foreign affairs. He may be reached at yaseerkhan@hotmail.com or @yasirkhann

 

 

Published in Daily Times, September 20th2017.

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