CPEC is economic lifeline
Ishtiaq Ali Mehkri
Last updated on March 25, 2018 at 05.15 pm
Pakistan's Gwadar Port
The China-Pakistan Economic Corridor (CPEC) is Pakistan's kinetic strength. It has kick-started development and there is no looking back. The gigantic $50 billion ambitious project, articulated by Beijing, is an assurance that regional coordination and economic buoyance is around the corner. It has dividends for foreign relations as well, and CPEC is harbinger for competition and sustainability. While Pakistan is the world's 24th largest economy, and 42nd largest in terms of gross domestic product, it has a long way to go as CPEC unfolds into an infrastructural reality in the realms of energy, railways, optic fibre, agriculture, tourism as well as research and development.
CPEC is in line with Pakistan's Vision 2025 programme. The good point is that China will also help further the knowledge base for Pakistan. Hundreds of students will be provided with an opportunity to study in Chinese varsities, and liaison themselves with latest technology and know-how. In the long run, it is a preamble for transfer-of-technology, and infrastructural maintenance and upgradation shall be taken care of. The magnet of the project is the Gwadar city and port, and its nexus to the warm waters in Arabian Sea.
CPEC is also a bonanza deal for the UAE to tap the landlocked markets of China, Central Asia and Afghanistan via Pakistan. The country currently has a growth rate of 5.6 per cent, is likely to post around 8 per cent growth with the completion of CPEC projects by 2019.
Pakistan, despite downslide in economic barometers, has a promising future as it reorients itself instantly with the $10 trillion Chinese markets. Moreover, the Free Trade Agreement with China and harmonious relations with other countries in the region will post Pakistan as the preferred destination for transit trade and investment. Pakistan was recently upgraded from a frontier economy to an emerging market in the MSCI index. Likewise, GDP is set to grow due to improved power supply - with the completion of energy projects, consumption growth and recovery in agriculture. International donors, especially the International Monetary Fund, say the near-term economic growth outlook is 'favourable', while stressing for macroeconomic sustainability in the long run. This is what CPEC and its related growth is likely to address, and put Pakistan in the comfort zone of a resilient economy. Foreign direct investment (FDI) inflows are also projected to the tune of millions of dollars.
Pakistan, nonetheless, needs reforms to grow and stabilise its macroeconomic potentials. Ad hocism has left it in tatters. It's time for an institutional approach rather than flimsy solutions. An industrious labour market, agrarian-based economy and remittances from overseas Pakistanis are its real strength. Remittances from expatriates rose by 2.5 per cent in the first half of 2018, touching the $12 billion annually, and exports climbed to a seven-year high of 10.8 per cent in the first half of FY-18. This widely acts as seed money for Pakistan's balance of payments, and compensates for lack of investment profiles.
A study says remittances can grow by 50 per cent if the government provides due incentives to its non-resident citizens, and the illegally stashed money abroad is recovered. The popular accountability campaign underway these days is sine qua non for a self-reliant Pakistan, and there is no room for blinking in it. Pakistan's external debt to the tune of over $80 billion can be settled in a jiff, if the looted money is recovered in all sincerity.
Pakistan's enterprising 200 million people are diverse and rich in talent. There is no dearth of skill and innovation among them. Moreover, its labour market is high in demand in the Middle East and abroad, which makes it an invincible aspect of economic progress. Corrective steps and a sustained strategy is all that is needed to make Pakistan the economic powerhouse in the region.