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Friday, June 7, 2024

CPEC: A stimulus for Pakistan’s economy?

CPEC is intended to rapidly upgrade Pakistan's required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and special economic zones.

The China Pakistan Economic Corridor (CPEC) is a development mega project aimed at connecting Gwadar Port in southwestern Pakistan to China’s northwestern autonomous region of Xinjiang, via a network of highways, railways and pipelines to transport oil & gas. It will run about 3,000 km from Gwadar (Balochistan) to Kashgar (China). Overall construction costs are estimated at USD$62 billion and the Corridor is an extension of China’s proposed 21st century Silk Road Initiative BRI.

Geographically, it is a 1,250-mile (2,000-km) road and rail link connecting Kashgar to Gwadar. Economically, it consists of cooperation in the financing, and investment measures on energy which covers coal power plants, hydroelectric, wind-generated power, solar power and supplies of coal.

Read more: CPEC: Harbinger of prosperity for Balochistan

Early harvest projects related to transport and infrastructure included

  1. Rehabilitation and realignment of the Raikot-Islamabad sector of the KKH
  2. Construction of Karachi-Lahore Motorway
  3. Construction of Orange Line Metro Train in Lahore
  4. Upgrading the existing railway’s transport from Karachi to Peshawar
  5. Development of dry port and cargo holding facilities in Havelian
  6. Construction of Eastbay Expressway in Gwadar
  7. Construction of Gwadar Intl Airport
  8. Construction of breakwaters at the port
  9. Designing berthing areas and channels at the port
  10. Infrastructure for Export Processing Zones and port-related industries in Gwadar
  11. Construction of necessary facilities for freshwater treatment and support in Gwadar
  12. Construction of a hospital and a vocational institute in Gwadar.

The overall scope of the CPEC is much broader 

The construction of the Diamer Bhasha dam and two other coal-based power projects are part of the CPEC in Gaddani and Sahiwal. In the field of transport infrastructure, the construction of a new rail link from Gwadar to Jacobabad via Besima and Khuzdar is also part of the CPEC.

CPEC is a mega project that would not only play a pivotal role in boosting the socio-economic conditions of Pakistan but would also have pronounced benefits for China. The obvious benefit for China with CPEC is that it reduces the transport time of goods, energy and money from the oil-rich Persian Gulf which cost around $18 million to import 6.3 million barrels of oil as shipping costs from the Middle East. Another benefit China sees is a bright future for western China.

Read more: China rejects rumors of CPEC slowdown during PTI rule

CPEC has opened a vista of great opportunities for Pakistan and will greatly help our country and will increase regional connectivity, integration, enhancement of trade activities and creation of employment for youth.

Pak-China relations have become a point of concern for many countries

The CPEC has been designed in such a way that it will bind all the provinces of Pakistan, including AJK and GB. In the future, Pakistan will be able to connect Russia and Middle Asian Muslim countries with an economic corridor between Pakistan and China.

The completion of Gwadar will become an economic hub of Balochistan and will create a strategic nexus between Pakistan, China and Central Asia, generating billions in revenue and providing job opportunities for the Baloch people. The Free Trade Zone at Gwadar would also be introduced which will turn Gwadar into a hub of foreign investment.

The importance of the CPEC is amplified by the fact that it is also going to link up with the greater Chinese plan of the Silk Road Economic Belt (SREB) that would connect China with Europe through Central Asia.

Linking Gwadar with Kashgar and onward with Central Asia is aimed at improving Pakistan’s trade and investment relations with China as well as Central Asia. It is hoped that at some point in time the Iran-Pakistan gas pipeline project could be extended to include China in it as well.

Construction of an oil pipeline from Gwadar to Kashgar through a distance of around 2,500km to carry Middle Eastern oil is also envisioned. The CPEC is also considered important for China’s trade with Afghanistan as well as its strategic projection into West Asia and Africa.

Read more: PM agrees to disband the CPEC Authority

The development of communication infrastructure would also help the tourism industry of the Northern Areas of Pakistan bordering China. Also, business communities hope that the CPEC will enhance cooperation in the agriculture sector as well through the greater transfer of technology. The financing and the operation of the Gwadar Port is a clear indication of how necessary it is to integrate Pakistan and China economically.

In the past, Pakistan has gone through phases of political instability and turmoil that weakened and affected the country’s development and policy consistency. Similarly, some prolonged political crises and economic meltdown grip the country, and the yearly and periodic budget allocated for the CPEC project could be disturbed causing delays to the project outcome beyond set targets. At the same time, it is imperative to ensure stringent security measures along the entire CPEC alignment.


The writer is an Islamabad-based researcher. The views expressed by the writers do not necessarily represent Global Village Space’s editorial policy.