CPEC to be a ‘growth puller’ in times of global recession

By: INP      Published: 09:49 PM, 10 Jun, 2020
CPEC to be a ‘growth puller’ in times of global recession
CPEC projects: status, cost and benefits.–File photo

Mega projects like China’s BRI and CPEC will prove to be growth pullers in the times of global recession in the days to come, according to some recent reports based on research studies of the World Bank (WB) and the International Monetary Fund (IMF).

Although at present this appears to be a remote possibility to some economists worried about the post-coronavirus negative growth, WB’s April 2020 report forecasts good days ahead for Pakistan whose “GDP is likely to increase up to 6.43 per cent till 2030, courtesy the steady pace of CPEC”.

According to the research studies, certainly there is no reason to disbelieve this 2030 projection. Given the fact that despite slowing down of economic activity in many parts of the world, CPEC is entering its second phase that will also focus, among others, on more areas of cooperation like tourism, food security, science and technology and agriculture with enhanced partnership between China’s and Pakistan’s private sectors.

The main factor underlying this increased cooperation despite coronavirus-related crisis is the iron resolve of both the “Iron Brothers”, China and Pakistan, to remain steadfast on the path of shared prosperity. According to Yao Jing, Chinese ambassador to Pakistan, “Completion of phase-1 of CPEC has laid a strong foundation for the 2nd phase which will focus on development of Special Economic Zones (SEZs) and strengthening of the trade and cultural ties through joint ventures and exchanges of delegations.”

While reminding that China has granted duty-free access to Pakistan for export of 313 goods under the 2nd phase of China-Pak Free Trade Agreement (FTA), the ambassador said that Pakistan could act as a bridge between the East and the West. Many economists agree that this FTA will help increase Pakistan’s exports by optimally utilising its potential in agriculture, textiles, food, minerals, engineering and other sectors.

Another landmark project under the umbrella of Pak-China economic cooperation is going to see its formal ground-breaking within days. It is the Rashakai Special Economic Zone (Rashakai SEZ). Its ceremony is likely to be held within the next few weeks in the Khyber Pakhtunkhwa province.

According to Khyber Pakhtunkhwa Chief Minister Mahmood Khan, this project will create thousands of employment opportunities for people of this province in particular and for people of Pakistan in general. For this purpose, Chief Minister Khan has directed the authorities to speed up working on the construction of approach roads to this SEZ.

The authorities concerned in Pakistan have also been instructed to complete all the prerequisites and make all necessary arrangements in this direction. According to Chief Minister Khan, Rashakai SEZ project is a flagship project of CPEC that the present government considers a big source of development, prosperity and economic growth for Pakistan, even for the entire region. This is, for sure, the sole objective of CPEC and BRI, which aim at intercontinental linkages and prosperity for all.

In this connection, the 6th meeting of the Board of Directors (BoD) of Khyber Pakhtunkhwa Special Economic Zones Authority (KP-SEZA) was held in Peshawar. The chief minister urged the stakeholders to complete their share of work for the establishment of this Zone well in time.

The fast-track development work on CPEC projects in this province is not confined to Rashakai SEZ alone. Other zones and projects are also being taken up on a top priority basis. In this regard, the provincial government has ordered the authorities concerned to ensure completion of all processes on the establishment of Hattar, Buner, DI Khan and other proposed economic zones as per the given timelines.

Since Rashakai ground-breaking is about to take place, the revised development agreement of Rashakai SEZ has been submitted to Pakistan’s Federal Board of Investment to give it a final shape before the signing of the agreement that is expected to take place in and around the mid of June 2020.