Economy of Pakistan and CPEC
Pakistan’s economy has largely impacted by the 9/11 and its consequences, especially the US the war against terror back in 2011. Being the basic ally of US, Pakistan and Pakistan’s economy faced major losses. Financial and economical losses exceed $123 billion in addition to the infrastructural and human losses. Despite all losses, terrorism, internal and external threats, Pakistan by the grace of Almighty Allah survived and bravely fought all the hurdles in country’s growth including terrorism and gave commendable sacrifices with the joint efforts of current government and military establishment.
The current government has taken significant measures in fighting terrorism and resolving energy crisis including electricity and gas. The gas and electricity shortage problems have catered up to 90 percent in the current government, while law and order has normalized to a greater extent and the situation is now attracting foreign investment. Industrial units have developed due to stability of gas and electricity. Tourism sector is also growing due to better law and order situation of the country.
Currently, Pakistan’s economy is at 24th position in the world with respect to purchasing power parity and 42nd largest in term of nominal gross domestic product. Economy of Pakistan is in developing phases and included in eleven countries having the potential of becoming world’s largest economies in 21st century (Next Eleven). Pakistan aims to attract foreign investment and improve the balance of payment through privatization of government’s corporations, tourism development and creating new opportunities for trade and industry.
In 2016, BMI Research report named Pakistan as one of the ten emerging economies with a particular focus on its manufacturing hub. The World Bank predicts that by 2018, Pakistan’s economic growth will increase to a robust 5.4% due to greater inflow of foreign investment, from the China-Pakistan Economic Corridor (CPEC). CPEC will not only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India, Central Asian Republic, and the region.
China-Pakistan Economic Corridor is journey towards economic regionalization in the globalized world. It founded peace, development, and win-win model for all of them. China-Pakistan Economic Corridor is hope of better region of the future with peace, development and growth of economy. Under CPEC, several projects are in progress including 21 energy projects are in progress, 8 projects are related to infrastructure, Gwadar based 12 projects, 4 rail based mass transit projects, 6 new provincial projects, 9 special economic zones and 4 projects of social sector development, which will boost the national economy of Pakistan.
The CPEC will open doors to immense economic opportunities not only to Pakistan but will physically connect Pakistan and China to markets in Asia, Europe and beyond. The volume of trade between Pakistan and China will increase significantly in addition to improved trading with different South Asian and even Central Asian countries. The 3,218 KM long route, to be built over next several years, consisting of highways, railways and pipelines will bring industrial and trade revolution in the country. The CPEC project will also play vital role in Balochistan’s financial, social and political stability and will play part in social and commercial development of the province.
As part of infrastructure projects worth approximately $11 billion, and 1,100 kilometer long motorway will be constructed between the cities of Karachi and Lahore, while the Karakoram Highway between Rawalpindi and the Chinese border will be completely reconstructed and overhauled. The Karachi-Peshawar main railway line will also be upgraded to allow for train travel at up to 160 kilometers per hour by December 2019.
Over $33 billion worth of energy infrastructure will be constructed by private consortia to help alleviate Pakistan’s chronic energy shortages, which regularly amount to over 4,500MW and have shed an estimated 2-2.5% off Pakistan’s annual GDP through CPEC. Tourism which currently makes up an insubstantial part of our earnings is believed to be elevated by opening of this economic corridor. The CPEC, some believe, will also boost tourism in the 73,000 square km region. The region is considered to be a mountaineer’s paradise, since it is home to five of the ‘eight-thousands’ (peaks above 8,000 meters), as well as more than 50 mountains over 7,000 meters. It is also home to the world’s second highest peak K2 and the Nanga Parbat.
The region of Baltistan is known for its fresh fruit exports, like cherries, apricot and apples, CPEC will be a game changer by opening business opportunities for the region’s traders. This will provide local traders with an advantage and help them double their sales by tremendous saving in cost of transportation. Presently, fruits are being exported through air-cargo via Dubai it would be faster and cheaper if the same could be sent by road to China via Xinjiang.
By Mian Zahid Hussain
Mian Zahid Hussain (Sitara-e-Imtiaz, Hon. PhD.)
Former Minister; Information Technology – Government of Sindh
CEO; KenLubes International (Pvt.) Ltd.
President; * Pakistan Businessmen and Intellectuals Forum (PBIF)
All Karachi Industrial Alliance (AKIA)
Sr. Vice Chairman; BusinessMen Panel for FPCCI (BMP)
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