IMPACT OF CPEC ON PAKISTAN’S GDP;ANALYSIS OF BENEFITS AND CHALLENGES

Introduction to CPEC:

Pakistan and China have agreed to construct One Belt One Road project which is commonly branded as China-Pakistan Economic Corridor.

It is an economic corridor comprising a collection of projects currently under construction at a cost of $51 billion.

CPEC aims to facilitate trade along an overland route that connects Kashgar and Gwadar, through the construction of a network of highways, railways, and pipelines.

There are many external and internal confronts for Pakistani government to execute this multi-dollars project.

Impact of CPEC:

The impact of CPEC is highly fruitful for both the involved countries. The China-Pakistan Economic Corridor (CPEC) was initially intended

to promote mutual development of China and Pakistan by enhancing bilateral exchanges and cooperation in transportation, energy and marine sector.

The corridor is envisioned to rapidly expand and upgrade Pakistani infrastructure, as well as deepen and broaden economic links between Pakistan and the People's Republic of China.

It is considered to be an extension of China's ambitious One Belt, One Road initiative, and the importance of CPEC to China is reflected by its inclusion as part of China's 13th five-year development plan.

Benefits of CPEC:

The corridor not only funds and supports the construction and connectivity of transportation infrastructures, but more importantly aims to promote bilateral cooperation in multiple areas of major projects, as well as information and communication technology, and to set up more industrial parks and FTAs.

Pakistani officials predict that the project will result in the creation of upwards of 700,000 direct jobs between 2015–2030, and add 2 to 2.5 percentage points to the country's annual economic growth.

Challenges to CPEC:

Political unrest, security situation and administrative issues are some of the greatest challenges in the way of successful completion of the corridor.

For India, CPEC is a thorn in its paw. They have put their heads together to work out new strategies to block the project forward march. Likewise Israel and the US are also unhappy with this economic pivot for Pakistan.

In Pakistan, some political parties like ANP, Baloch nationalists, PkMAP and some others raised serious objections to the CPEC project.

Recommendations: Government must make decision on the basis of economic

gains and multiplier impact on the economy.

Route prioritization must decide on the basis of population density (directly relates to population displacement), productive land under the route, loss of production.

Strategic importance for Pakistan in short and long run must give due importance.

Recommendations (cont..)

Transparency must be ensured for smooth functioning and equal distribution of benefits.

Government must use the existing institutions (Council for Common Interest) for resolving all controversies related to CPEC Last, but the most important aspect, all stake-holders must have good understanding of Chinese needs, as China is investor of the project.

Conclusion:

Earlier, Pakistan has gone through stages of political unpredictability and turmoil that enfeebled the country’s progress roadmap and also affected policy geographic stability. The CPEC appears to be a very critical project for Pakistan. The construction of CPEC is an important agreement for the country which has boundless benefits for its economic betterment.