Evaluating CPEC’s Impact on Pakistan’s Economy

Professor Ruman Younis
The recent launch of the Uraan Pakistan initiative has sparked interest in Pakistan’s economic development. However, governments in Pakistan, particularly those led by the PML-N, have a history of grandiose posturing when it comes to economic development. To better understand the effectiveness of such initiatives, it is essential to examine the history of similar projects, such as the China-Pakistan Economic Corridor (CPEC). CPEC has been a cornerstone of discussions surrounding Pakistan’s economy for over a decade. Despite its significance, there is a lack of honest assessment of CPEC’s accomplishments and shortcomings. The official CPEC website provides some insight into the project’s goals, which include completing infrastructure projects, developing an industrial system, and improving livelihoods along the corridor by 2025. While infrastructure projects have largely been completed, the progress of the industrial system is unclear. Questions remain about which local industries owe their existence to CPEC and their contribution to GDP. The increased property value along the CPEC route has not necessarily led to significant improvements in livelihoods for the local population. What has become of the Gwadar port? Research on vesselfinderdotcom reveals that no ships arrived at the Gwadar port in Pakistan in the last 24 hours, and none are expected to arrive in the next 30 days. Gwadar port has clearly, as yet, not turned out to be the game changer it was advertised as. Despite government efforts, the city could not host a PSL ceremony due to logistical issues. One of the goals stated in the official long-term plan of CPEC was the achievement of the goals of Pakistan’s Vision 2025. The vision aimed to achieve a 100% enrollment rate, 90% literacy, and reduce poverty by half. However, none of these goals have been achieved. While CPEC was touted as a game-changer, little attention was paid to the debt burden it would cause. Unrealistic export targets were set, and independent economists have warned of a Sri Lanka-like situation for Pakistan. As a result, Pakistan faces a huge debt burden. According to the international debt report released by the World Bank last month, Pakistan had a debt of $131 billion in 2023. The report points out that China has become the largest creditor of Pakistan, with almost $29 billion in loans. These figures lend credence to the view that CPEC has all the characteristics of a debt trap. It is a failure on the part of policymakers and think tanks that they have not been able to provide an objective assessment of the project. Part of the reason has been the reluctance of diplomatic circles to face the facts and prefer image over substance. The inability of successive governments, particularly those led by PML-N, to achieve these goals raises questions about the effectiveness of CPEC. These plans and visions have been misleading. Was misleading the nation by setting overly optimistic targets in the CPEC long-term plan and Vision 2025 deliberate? Is there an institution or think tank that can independently analyse initiatives like CPEC and provide unbiased assessments?[CONTINUE] As Pakistan continues to pursue economic development initiatives like CPEC 2.0, it is crucial to learn from past experiences and critically evaluate the effectiveness of these projects.