Published: January 29, 2018
The writer is a former caretaker finance minister and served as vice-president at the World Bank
Initially, the China-Pakistan Economic Corridor (CPEC) initiative will focus on two sectors: energy and highways. The bulk of the funds that are coming in are committed to solving Pakistan’s energy problem. This has crippled the economy and has put a lid on the rate of future growth. It is wise to address this problem even if it means using some of Pakistan’s abundant coal reserves. The impact of this focused investment will be immediate. But there are other contemplated investments that will have long-term benefits.
Work has also begun on improving the handling capacity of the port of Gwadar and on building a network of highways that will fan out from it to the country’s interior. The roads will come together into one high-altitude highway that will cross into China at Khunjerab, a pass in the Karakoram mountain range. The Karakoram Highway was built decades ago by Pakistan and China working together. CPEC will bring about major improvements in both the highway’s alignment as well as its handling capacity so that heavy traffic can be carried by it.
Developing Pakistan’s agriculture sector has also been mentioned as an area of priority for CPEC. The idea behind this is to export agricultural products to China since much of the land in the areas that border Pakistan is not productive. It is a combination of mountains and deserts. China plans to move a large number of people from the heavily populated east to the sparsely peopled west. This migration has already begun. Demand for food and other agricultural products will increase. The intention is to meet some of this from imports from Pakistan.
How many jobs will come to Pakistan as a result of CPEC? There is an impression in the country that the Chinese entities working on various projects are bringing their own workers. Not many jobs are being created in Pakistan. This is a common Chinese practice. I was once taken to see the work the Chinese were doing in Tanzania, building a railway line connecting Dar es Salaam, the country’s capital, with Mombasa on the coast. There were camps along the way in which workers lived. All of them were Chinese. That is not the case with the Chinese-financed projects in Pakistan. According to Zhao Lijian, an official in the Chinese Embassy in Islamabad, more than 60,000 Pakistanis are already working in different China-financed and China-managed projects in the country.
However, one area where China is making impressive strides is not explicitly mentioned in the CPEC programme. This is technology. New technologies embedded in the projects China will be implementing in Pakistan will certainly help but it would be prudent for Pakistan to ask for explicit Chinese assistance in this area. In this context, it may be appropriate to appreciate the strides the Chinese have made in developing several technologies.
The United States National Science Foundation and the National Science Board have released their biennial report. It is a voluminous document titled Science and Engineering Indicators. While the report has a great deal of data on technological trends not only in the United States but also in other countries, it notably places focus on developments in China. The country is now the second-largest R&D spender in the world, accounting for 21 per cent of the total of nearly $2 trillion. The United States with 26 per cent ranks first. What is particularly impressive is the rate of increase: R&D outlays in China grew at the rate of 18 per cent a year between 2000 and 2015, more than four times faster than the United States’ rate of 4 per cent. China will soon become the largest spender in the world.
This is one of the findings that should be of interest to policymakers in Pakistan. The country needs to train as many people from its rapidly growing population as it can, using both domestic and foreign institutions. The United States has been the favoured destination for the Pakistani youth but with growing anti-immigration and anti-Muslim sentiments in the country, and a rapid deterioration in relations between the two countries, the United States’ educational sector may no longer be welcoming for Pakistanis. China may be an attractive alternative. China has dramatically expanded its technical workforce. From 2000 to 2014, the number of science and engineering graduates increased from 359,000 to 1.65 million, almost a five-fold increase. It is now turning out more trained people than the United States that saw an increase from 483,000 to 742,000 in the same period.
This increase in numbers has resulted in an impressive growth in technical output. There has been an explosion of published technical papers by Chinese scholars. Since the government is heavily involved in selecting the areas of concentration, the country has made impressive strides in artificial intelligence, telecommunications, robotics, electric cars and renewable energy. Some of these could be selected by Pakistan as areas of its own concentration. To begin with, China’s help should be sought in increasing institutional capacity to train the youth in artificial intelligence, robotics, renewable energy and biotechnology. This capacity should be developed in both the public and private sectors.
In developing this human resource, Pakistan’s policymakers should focus on meeting domestic demand as well as catering to the needs of the human resource-poor countries in Europe as well as the United States. To quote from the above-cited report, “industries like computing, robotics and biotechnology are pillars of the United States economic competitiveness, sustaining and creating millions of high paying jobs and high value exports. The loss of global leadership in these future drivers of growth would weaken the American economy.” America does not have the human resource needed to maintain a position in these important areas. In the United States, its bias against immigration notwithstanding, there is a move to overhaul immigration to favour high-skilled newcomers. Pakistan could contribute to meeting this deficit.
Published in The Express Tribune, January 29th, 2018