Naseebullah Khan
After the completion of phase one which brought around 28 billion USD investment in Pakistan, the second phase of the CPEC was inaugurated by Chinese vice president He lifeng and the then prime minister of Pakistan Shahbaz Sharif. During phase two, it is expected that Pakistan,s GDP will increase to 6.30 percent by 2030, 1.1 million people will be lifted out from poverty, and trade will increase by 9.8 percent.
It has been valuated that total projects planned in phase 2 are 227 that include broader collaboration in agriculture, industry, cooperation in science and technology, job creation, socioeconomic developments, rapid progress on the development of Gwadar airport, establishing of SEZs, partnership in the field of Artificial intelligence and innovation, expediting work on ML-1, rural revitalization, green energy development, and investment in renewable and hydropower energy.
The question arises as what is needed to reap this phase? There is a dire need to invest in human capital, health and education development, and participation of female in the workforce. Moreover, the provincial and federal governments need to work on rural development and construction of roads and infrastructure which are necessary for the success of SEZs so that to connect areas near the SEZs.
In addition, there is a dire need to improve institutional framework, legal system, bring political stability, and make security situation better. Apart from these, industrialization will be the integral part of second phase of the CPEC hence, Pakistan needs to work on inclusion of global supply chain, cementing industrial base, technological dissemination, spillovers, and diversification of industries. How China developed its industries was its policies of constructing SEZs and then connecting nearby areas with those zones. At current, the SEZs in China provide 30 million jobs of 12 percent of GDP which is expected to reach 20 percent in future, and has attracted 46 percent of investment.
Notwithstanding, Pakistan must work for attracting investors and strategise businesses friendly atmosphere. As in the above lines it was said that there is a need of altering institutional framework, provision of legal guarantees to the investors, and ensuring security. In the midst of the above mentioned obstacles Pakistan is legging behind attracting investment. For instance, Pakistan was 110 out of 190 in doing business, in availability of Electricity it rank was 163, in paying tax 161, in trading across border 11, in government effectiveness its rank was 26 and in most corrupt countries its rank was 140. How investment can be attracted in the presence of such deplorable indicators?
The CPEC is undoubtedly a game changer for Pakistan in the fields of economic growth and social development. After the completion of its phase one, work has been initiated on its phase two. At the same time, the federal and provincial governments need to adopt holistic stratagems for harnessing the true potential of this mighty project. These strategies ought to focus on altering legal framework for investors, rural development of the adjacent areas near to the SEZs, envisaging fresh trade policies, bringing political stability, enhancing security situation, etc.
