FINANCING AND FINANCIAL SECTOR INTEGRATION
Exports promotion through CPEC
Development of Special Economic Zones (SEZs) under CPEC provides an opportunity to boot exports of the country if the special focus is given to the imports of the other economies. It is imperative to consider the
development of the induﬆries that produce products imported by other economies while developing SEZs. An increase in the exports shall contribute to decreasing the current account deﬁcit as a result of high inﬂows
of dollars. Furthermore, a suﬆainable increase in the inﬂows through exports shall result in making Pakistan’s currency more liquid, hence minimizing the risk of severe adverse ﬂuctuations.
Innovative modes of revenue generation through CPEC
The main objective of ﬁscal policy is to increase revenue generation by capitalizing on the identiﬁed new opportunities, particularly in the periods of high FDI inﬂux and economic growth. CPEC being discussed as game changer would bring
along certain new sources for revenue generation that could be used to meet the increased demand for expenditure. One of the innovative modes for revenue generation that CPEC oﬀers could be to levy higher or specialized tax rate on the all of the land near to the infratructure development zones under CPEC as the value of property adjacent to these zones will appreciate signiﬁcantly in value as result of these infraﬆructure developments.
SALVAGING THE ORGANIC SCRUMPTIOUS FRUITS OF G-B
Gilgit-Baltistan (G-B) has the capacity to produce approximately 200,000 tons of scrumptious fruit every year comprising of Apricots, Almonds, Peaches, Apples and Walnuts. Whereas the handling capacity of this fruit is in such a bad shape that according to an estimate approximately 70% of produced fruit in Ghizer district alone fails to reach any market. There is a dire need for acquiring modern tools and techniques to perform picking, sorting, handling, processing, branding, practising, storing, marketing and distribution for this resource in an efficient manner.
Apricots, Peaches and Berries picked through manual labour has a very limited shelf life, roughly between 3 to 4 days, therefore there is a need for cold storage to store and transport this fruit to far-flung areas to address their needs. Lack of cold storage/supply chain facilities is causing a loss of approximately 50,000 tons of fruit (in G-B/Northern Areas) every year. This amounts to approximately 11 Billion rupees in case we are talking about fresh apricot only.
Packaging is yet another ignored aspect of the fruit industry in G-B, attractive packaging of Chinese dry fruit caused a steep drop in the price of local produce last year. Chinese Walnuts, though less tasteful but well packaged dominated the market, thereby causing huge loss to local Walnut produces. Local Walnut produced organically tastes much better than the one imported from China, but the efficient Supply Chain and packaging is bringing the Chinese Walnut to our markets on relatively cheaper rates.
These above-mentioned challenges offer numerous opportunities to local/foreign Entrepreneurs and enterprise brands who must come forward along with Government bodies assistance to fill these gaps and assist local industry in coming forward to mitigating this imminent threat.
CHINA PAKISTAN JOINT DEVELOPMENT OF MUSEUMS AND STORYTELLING THEATER
A lot of opportunities are there in the coastal region of Balochistan which is selected for coastal tourism. This is “2+1+5” tourism spatial structure in Pakistan which includes two centers, one axis and five zones: Karachi Port and Gwadar Port as the two centers, and the coastal tourism belt as the development axis, and five tourist zones of Jiwani & Gwadar tourism zone, Jhal Jhao, Ormara, Sonmini and Keti Bander.
Apart from water safari parks and other recreational activities museum and Storyteller Theater can be an addition to attract tourists. Such activities more frequently would become a mean to attract local and foreign tourists.
Moreover, shrines, forts, temples or other assets may need to be preserved for cultural growth to showcase our culture to the Chinese side.
EXCHANGE OF ARTS AND CRAFTS
With the initialization of CPEC, concerns about culture and Chinese influence have been raised particularly by local residents where the cultural norms, values and traditions are well rooted in the region. It is equally vital to show each other the cultural norms and values to develop acceptance and respect for being different and yet similar.
In this regard, art galleries and artists can play a strong role in portraying both cultures through paintings, posters and script. Art galleries may invite Chinese artists to showcase their work as well as our artists both painters/actors should participate to exhibit their work in China.
Local artists should be given a chance to be the part of such caravans so that they can take the responsibility to share and preserve local cultures.
E-TECHNOLOGY THROUGH OPTICAL FIBER
The 44 million Dollar Pak-China Optical Fiber Cable (OFC) project completed in 2018 is a part of CPEC early harveﬆ projects, featured with the development of ICT via the communicational infraﬆructure of around 820 kilometers OFC from Rawalpindi to Khunjerab. This project will enable high-speed international connection to cater to the rapidly growing internet needs.
Moreover, it will help to booﬆ the digital innovation in the country according to the universal trends along with providing Pakiﬆan with a global platform of connection and making a positive impact on the lives of local masses. Besides, OFC project will bring new skill development dimensions and training programs for operation by integrating diﬀerent sectors with ICT. This will emerge the requirements of IT and telecom services division jobs and trainers for operational and execution mode, raising the IT-related employment opportunity in below-mentioned sectors along with other key attributes, like:
- Providing a scheme of integration via Broadband Avenue along with high internet speed across the region via connecting the villages with urban areas and bringing eﬃciency in the processes of all the government departments, schools, colleges, universities, healthcare institutes, research and development institutes, marketing and business operational practices.
- Supplying public internet access programs which will beneﬁt ﬆudents in research and integrated learning programs, job seekers for connecting their skills with available opportunities and enhancing their exiting skills via online career courses, and business personals for export-oriented relations with potential global partners along with merchandising their manufacturing products.
- Introducing the concept of e-governance with the focus on providing all the government services electronically to the local citizens. Furthermore, operating various governance applications with optimal utilization of ICT resources while allowing for the decentralized implementation.
- Presenting technology for security purposes such that providing online emergency, safety and disaﬆer-based services to the citizen in real time to minimize the irreplaceable losses. • Eﬆablishing technological tourism and travel facilities for visitors and touriﬆs by launching the travelling ﬆructure information, attractive tourism spots and available travelling agents/consultants on particulars at a single portal.
MARBLE SECTOR POTENTIAL
Pakistan’s exports basket is limited, and markets are concentrated. Textile contributes lion’s share of our export earnings. However, Pakistan is endowed with abundant resources, if tapped efficiently, will provide sufficient foreign exchange earnings. One such natural resource is Marble and Granite (or dimension stones). Estimated reserves of marble and granite in Pakistan are respectively 300 and 1000 billion tons. These numbers place Pakistan 6th largest producer of the dimension stones. Major colours in marble include white, grey, black, green, pink, brown and yellow, and can be found in Buner, Mohmand, Mardan, Parachinar, Gilgit, Hunza, Lasbella and Khuzdar. Regarding granite, they can be found with black, green, pink, grey, gold, yellow and red colours in regions such as Gilgit, Dir, Chitral, Malakand, Swat, Swabi, Kohistan, Nagarparker and Chagai.
Despite the potential of the sector, marble and granite exports of Pakistan are 2% of its total exports and are mostly in raw form i.e. blocks and slabs. Top export destinations in the year 2016 are China (89%, $31M worth of exports), South Korea (1.93%) and Saudi Arabia (1.8%). Its contribution to the country’s GDP is only 0.5% and provide jobs to nearly 40,000 people. Many reasons can be attributed for not harnessing the sector’s potential such as lack of stone dimensioning technology, regulations, lack of focus on value addition and investment.
Pakistan Stone Development Company (PASDEC) has been founded in 2006 to promote the marble and granite sector. The company has taken many initiatives to make the sector globally competitive. For instance, the initiatives regarding the minimization of quarrying waste from 85 to 45%, developing procedures to ease business operations in the sector, training workforce, promoting strategic partnerships and export marketing.
Nevertheless, the huge potential still exists to exploit the sector. The booming construction industry in China offers tremendous opportunity for investors of both the countries to make joint ventures and take the sector ahead. Possible joint ventures can be formed in SEZs of Mohmand and Rashakai. High-quality marble in Mohmand and better connectivity of Rashakai economic zone via M1 motorway and its proximity to current marble clusters presents an ideal place for investment. The planned special economic zone in Buner and its existing 500+ marble factories connected through Swat Expressway via Palai and Ambella will provide further alternative option for foreign investors to take advantage of the unparallel marble reserves of the country. Also, Moqpondass and Bostan SEZs show potential to top the marble reserves of Balochistan and GB, respectively.
HOUSING CHALLENGES IN PAKISTAN
Housing is the acknowledged as the core policy challenge by the PTI led Government. Estimates of State Bank of Pakistan enlists that there was a backlog of 4.4 million houses only in the major urban centers of Pakistan (Sheikh 2017). Therefore, it is expected that by 2035 five biggest urban centers of Pakistan will account for 78% of total housing shortfall. Likewise, the rural housing sector is no exception to the above-mentioned scenario but here urban-centric housing is focused. Principal causes explaining worsening urban housing problem in Pakistan are particularly related to demographic shifts which resulted in the high urban population growth. Other complementary causes are; changing sociological dynamics in the urban areas and social dislocations in rural areas. These reasons directly cause an increase in housing needs. Consequently, the housing process has risen exponentially much faster than incomes which made housing predominantly problem of both middle- and low-income people in Pakistan.
In this regard, there are new avenues of opportunities for cooperation between China and Pakistan in order to effectively address and manage urban-centric housing question. China could extend meaningful policy insights based on its own experiences in dealing the housing policy issues primarily based on four following reasons;
- China now represents the world’s largest construction market in terms of built space, adding over 2 billion square meters of floor area annually— nearly half the global total.
- Half of China’s annual constructed space is residential, which resulted in China’s boom in residential construction.
- Recent housing sector reforms in China during 1988 and 1998 which sponsored comprehensive market-based housing provision.
- Previously China has the experience to addressed housing problem on social grounds rather than relying on market-oriented mechanisms.
Based on the above-mentioned Chinese experiences in the housing sector there are an extensive set of opportunities to address the dire need of housing in Pakistan. Three main opportunities could be;
- Incorporate housing as a new avenue of profitable investments under CPEC by encouraging Chinese construction/housing companies to build affordable houses schemes in Pakistan.
- Frame robust regulatory frameworks for the housing sector in order to protect the housing rights of the people of Pakistan.
- Ensure the provision of suitable land for the affordable housing through the mechanism of land zoning, land pooling and engaging the landowners by sharing the property rights, such as providing them planned plots instead of land compensation.
OPTICAL FIBER CONNECTIVITY
- The fiber cable connectivity plays an important role to facilitate and boost the tourism industry in Gilgit-Baltistan (G-B) and Azad Jammu Kashmir (AJK). It can be used to advertise natural tourist spots of G-B and AJK at international level and will enable many tourist services e.g. use of social websites, GPS system and with technology, tourists would be able to do online bookings of hotels well ahead of time.
- Fiber optics project under CPEC plays a vital role for unimpeded trade through Khunjerab border and will provide same internet facilities as available at any developed part of the country. As digital infrastructural deficit in GB is one of the biggest hurdles for efficient cross-border trade facilitation between China and Pakistan through the Khunjerab border.
- The availability of new internet connectivity will help to modernize government administration processes which will enhance the delivery of public services and provision of information through the Internet. It will also enable various e-government facilitates such as the construction of national data centers, safe cities, intelligent transport systems and various single windows operations for the better security and easiness of local people.
- The inception of 3G/4G connectivity in G-B and AJK will provide high-speed internet access for the student of universities. Moreover, it will also help Higher Education Commission of Pakistan (HEC) to introduce more online education, distance learning degree programs, virtual classrooms, digital library to access books from anywhere anytime, and e-learning short courses and online job portal for students studying in universities and their collaboration with related companies and industries for the local people of G-B and AJK.
- The inception of Optical Fiber Connectivity under CPEC will further expand the e-commerce market of Pakistan which is expected to grow up to US$1 billion by 2020. Recently world’s largest e-commerce company, Alibaba signed a MoU with the Trade Development Authority of Pakistan to promote digital entrepreneur culture for small and medium enterprises (SMEs) in Pakistan. It will also provide a platform for different training programs for SMEs in the field of e-commerce. As a result, it will enhance foreign investment by exporting Pakistani products to international markets.
• This fast and secure connectivity will also help to revolutionize the payment method by introducing the concept of digital banks for e-transactions. Currently, in Pakistan, around 95% of the e-business payments are being paid by cash on a delivery system which is one of the major hurdles facing by existing e-commerce companies, their customers and young entrepreneurs for the online startup businesses in Pakistan.
The actualization of agglomeration economies lies in the top tier of opportunities that CPEC is going to breed in Pakistan. According to world development indicators, in 1960, 11.52% of the population was living in urban agglomerations, 18.14% in 2000 and it increased to 22.33 in 2017. Urban planners/scholars have been citing agglomeration economies as making the actual backdrop of growth in the mega-cities and large city-regions in the world. Returns of economic activities increase in direct proportion with increasing the scale of urbanization, conditional only to the sustainability of efficiency of all the respective urban fabric. Here local governments, businesses, and consumers are easily reachable to each other, making the possibility of materializing a whole greater than the sum of its parts. Pakistan has been lagging behind in agglomeration economy due to a number of factors. CPEC is setting up a fabric of energy infrastructure components, which are going to create a matrix strong enough to hold together its agglomeration economies. To stitch this fabric together in a seamless whole requires a vibrant system of urban governance, wisely chosen loci for the urban agglomerations, and development of skills and knowledge. Making the most out of CPEC opportunities, Pakistan should also transform its economically static urban agglomerations. To build the pending urban, industrial, and economic dreams, CPEC brings a high time for planning and development departments to come forward in collaboration with consortia of respective scholarship and construct the designs of materializing agglomeration economies. Node cities of CPEC connecting whole Pakistan and establishment of SEZs have a great potential of agglomeration economy. These venues have a huge potential for SMEs development, job creation, and contribution in the overall economic development of Pakistan.
SMEs and Business Entrepreneurs
The small and medium enterprise (SMEs) can be considered as the industrial and enterprising foundation of Pakistan. Around 90% of the existing enterprising can be classified as SMEs which accounts for over 3.2 million enterprises. These are contributing to over 80% of non-agriculture work force, 40% to the annual GDP and contribute 35% in the value addition. Contrary to the importance of SMEs, these are lacking in financial and other resources; scarcity of working capital, lack of educated manpower, shortfall of research and development capabilities, limited access to new technologies & practices, lack of branding, marketing and communication skills. On the other hand, the CPEC is bringing a lot of opportunities in different sectors including; energy (electricity generation and transmission, oil and gas exploration and distribution), infrastructure (road, rail, sea, aviation, pipelines, ICT parks and enterprising), real estate, Gwadar Port and Smart Port city ad Industrial Parks development and management, trade, agriculture, tourism, financing and people to people linkages. SMEs due to its aforementioned limitations are not able to strongly link with the CPEC projects and prospects. Keeping in view the mentioned scenario, there is an urgent need for business entrepreneurs to understand the CPEC needs and opportunities and fulfill these through our SMEs.
Pakistan has been blessed with a lot of tourism opportunities across the country. Some of the prerequisites for promotion of tourism are; security, connectivity (road/rail/aviation, telecommunication/3G/4G), facilitation (boarding, lodging, services), sites development, branding and marketing. After the inception of CPEC, most of the aforementioned pre-requisites have been addressed including improvement in security situation, connectivity and energy related services. However, facilitation and sites development and promotion are the potential areas for private sector to focus on besides the various CPEC routes and axis. Following are some of the options; • Eco Tourism – In GB, Northern KPK and AJK • Cultural Tourism – In Central KPK, all across Punjab and Sind • Desert Tourism – Balochistan and Eastern Sind • Agricultural Tourism – Punjab and Sind • Costal Tourism – Southern Balochistan and Southern Sindh
HRD and Recruitment Agencies
CPEC is an inclusive initiative and its projects are carried out across all the different provinces and the regions in various sectors; energy (electricity generation and transmission, oil and gas exploration) and infrastructure (road, rail, sea, aviation, pipelines, ICT parks and enterprising), Gwadar Port and Smart Port city ad Industrial Parks development and management. Also agriculture, tourism, financing and people to people linkages are on key cooperation agenda. Recruitment agencies can scale up their capacity, identify the skills gap in Pakistan for the aforementioned sectors and fill the gap in consultation with the general constructor or vendors carrying out the projects.
Media & Film Industry
CPEC is talk of the town in Pakistan and seek wide attention in China and abroad. The CPEC routes and axis are passing through beautiful scenic regions of Pakistan and China. It includes beautiful valleys of Xinjiang Autonomous region, the world highest Khunjerab border pass and highest peaks of Himalayas, long tunnels and blue water lakes, all the way spanning through Pakistan up to the virgin beaches at Gwadar. There exist a huge potential for development and communication of media documentaries and joint production of China Pakistan films to promote understanding of cultures of both the countries and in a way support entertainment and peaceful coexistence.
Agriculture-Based Research Collaboration
China is keen to establish collaborative research centers focusing particularly on agriculture and seed sector of Pakistan. Agriculture is the most important sector of Pakistan and accounts 19.53% of GDP and the employed bulk of the total employed up to 50% workforce. It has recorded a growth of 3.46% in the year 2017 (economic survey 2016-17). A collaborative research between China and Pakistan would help to enhance productivity and add value in the agriculture sector of Pakistan. It would open new avenues of growth in Pakistan and would positively affect the lives of people by providing better jobs to the masses. It carries more prospects for all the stakeholders working in the agriculture value chain from seed to market and boost agricultural exports.
Marine Aquaculture in Gwadar
Fishing is the most prominent economic activity along the coastline of Gwadar district, contributing to employment, income generation and export revenues for the locals. Almost half of the population is either directly or indirectly involved in the fishing industry and about one-fourth of the total fish caught in Pakistan is from Gwadar. Gwadar has immense potential for the development of coastal aquaculture for fish farming. Development of aquaculture could be expected to provide significant direct employment for the locals and exports of fresh fish and shrimp through Gwadar to the Middle East and frozen bulk product to China, Japan, Vietnam and Far East. It will promote further development of feed production, packaging and export processing industries in and around Gwadar. Moreover, this will attract investment for the development of canning industry in Gwadar which will ease the pressure on Karachi port as the advanced processing of fish caught from Gwadar is being done in Karachi right now. Development of these industries would not only timely meet domestic demands but boost export of fish and fish products to many countries of Europe, Middle and the Far East.
Islamic Banking and Financing
China Pakistan Economic Corridor connects through 27 Muslim counties of Asia and Africa. Hence, the significance of Islamic Finance cannot be ignored. The Islamic Finance is a vehicle for long-term development with enormous potential that has not yet been fully explored in Pakistan. The global Islamic Finance industry has reached a size of over US$ 2 trillion. A critical area where Islamic banks can use Islamic Financing in adjusting the risk-sharing structure of these projects. Regulation, Taxation, Capital Markets and Awareness are the four main sub-committees of the Implementation Committee for Islamic Finance. Islamic financing could be promoted under CPEC for inclusive development of the region.
CPEC is considered as an initiative of livelihood improvement of the people of Pakistan and China especially in the deprived regions. To achieve the said consideration a strong social entrepreneurial community is required across the country to support the ongoing developments across the country, suggest ways and means to policy makers to make these sustainable, initiate small interventions to connect the fruits of projects with the societies and accordingly communicate the proceedings through different mediums to leverage true narrative of CPEC.
Prospects for Industrialists, Business Community
CPEC offers great socioeconomic opportunities in the form of Gwadar Free Port (Warm water deep sea port at the apex of trade intensive the Arabian Sea), Regional Connectivity (CPEC connecting China to Central Asia, South Asia and Middle East) and Investment Friendly Environment i.e. one window operation in nine priority Special Economic Zones (SEZs) across the country. Moreover, investment under CPEC is the biggest overseas investment by China so far which will help Pakistan economy grow and become stronger. The CPEC project portfolio will be a confidence booster and attract investments especially in the SEZs planned in the framework of the initiative. SEZs promote industrialization and economic growth through sustainable development. SEZs and Industrial Parks under CPEC provide business opportunities to Small and Medium Enterprises (SMEs) in the country. Chinese are investing in the whole world and are relocating its industry which is their “Go Global” strategy and therefore views Pakistan as a potential and strategically located country to relocate their industry for shared cooperation. SEZs will help the country to meet global competitiveness challenges by: • Creating industrial clusters having world class infrastructure • Providing investor facilitation to enhance productivity • Reducing cost of doing business • Generating employment • Reducing poverty • Enhancing Exports • Providing investment opportunities for local and overseas Pakistanis and International Investors
Real Estate Sector Development in Gawadar and across CPEC Routs & Axis
Pakistan has a strong real estate market and has achieved a high growth rate in previous years. The high growth rate is attributed to robust demand from seasonal investors, genuine buyers, and better security situation in Pakistan. This trend has been supported by the developments under CPEC with property prices rising by nearly 70% in Gwadar. Also, Balochistan’s government has introduced a new state of the art housing schemes to stir up real estate activity in the area. With the CPEC project taking shape in years to come, property prices are further expected to increase especially along the routes and its various axis. This will boost the real estate market by building investor confidence, which will result in accelerating the economic activity.
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs-transactions, payments, savings, credit, and insurance that delivered in a responsible and sustainable way” (World Bank). New International commercial banks are shifting to Pakistan; it’s a good omen that the Bank of China has established its branch in Pakistan. It would bring new and modern financial products which will support and upgrade the existing financial system.
Private Stakeholders of ICMA and ACCA Educators
Services sector of Pakistan grew by 5.98% and accounted a share of 59.59% in GDP of Pakistan (economic survey, 2016-17). Financial and accounting services carry a great potential to expand and grow. We have certified organizations and certified education system in Pakistan (CA, ACCA and ICMA etc.). These services will have more potential in near future. Accounts and Financial Associations like ICAP, ICMA, etc. need to work jointly with other countries to ease the movement of certified professionals in and out from Pakistan. This would be another potential area which will increase the job numbers in Pakistan and ultimately the quality of life.
Research Think Tanks and HEIs
CPEC is a long term multi sectorial portfolio hence the role of research and support of Think Tanks and higher education institutes (HEIs) working across Pakistan and China is inevitable to make CPEC a long term sustainable initiative. Evidence based research and policy recommendations about the seven key cooperation areas mentioned in the CPEC long term plan are required by the policy makers. The centre of excellence for CPEC, PIDE, MoPDR being the official thank tank on CPEC (cpec-centre.pk) would be happy to receive the research and share it to the relevant convener of the joint working groups (JWGs) of the CPEC.
Trade prospects and Potential industries
- CPEC will play a key role in enhancing the trade through shifting the mode of transportation. Currently about 86% of trade is done through sea and only 2% through land. The availability of improved infrastructure (rail and road network) will help to increase in trade through decrease in transportation and transaction cost. China is the largest trading partner of Pakistan. About US$16bn of trade with China occurs mainly through the sea (97%) and only 1% through land. A significant fraction of trade with China will be diverted to the land route after the completion of the project.
- Agriculture export receipts has dropped more than 15% for the year 2015-16. Agriculture export to China constitute 15% of total exports of Pakistan. Due to lack of linkages with manufacturing a great percentage of agrarian products are exported in the raw form. China is taking keen interest to invest in agribusiness to add value. Textile industry also lost competitiveness due to low value addition which is also considered for the investment and value addition to increase the export.
- Marble and mineral processing, food processing and packaging, and leather have great potential in maintaining the trade balance.
Financing sector opportunities in Pakistan under CPEC
- Financial inclusion through CPEC: Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs- transactions, payments, savings, credit and insurance that delivered in a responsible and sustainable way” (World Bank). New International commercial Banks are coming to Pakistan, just like Bank of China has established its branch in Pakistan. It brings new and modern financial products those can support the existing financial system.
- Financial integration by bancassurance: Bancassurance is an arrangement in which a bank and an insurance company form a partnership so that insurance company can sell its products to the bank’s client base. This could be implemented by agreement of understanding and strategic alliance etc. This opportunity is purely for the financial sector firms like banks and insurance companies, which could prospectively benefit from the higher degree of financial integration within Pakistan as well as with Chinese financial institutions.
- Opportunities for consultancy and brokerage services: There are new opportunities to provide consultancy and brokerage services for Chinese and Pakistani investors. Chinese and other foreigners might be reluctant to invest in Pakistan because they are not well aware of Pakistani financial environment, so Pakistani experts (Consultants) have opportunities to provide consultancy and brokerage services to these people.
- Opportunities for real estate business: The Gwadar port city is expected to soon become one of the most in-demand real estate investment destinations in Asia. CPEC is poised to give tremendous boost to the real estate industry in Pakistan, which even otherwise, has a promising outlook, given that a 2.8% annual population growth rate (source: Federal Bureau of Statistics, 2016) entails that more housing projects will need to be established. Real estate corporations have opportunities for the housing schemes and commercial buildings.
Urban development opportunities in Pakistan under CPEC
- Rapid Urbanization under CPEC is creating agglomeration economy with opportunities in the sectors of real estate, urban infrastructure, construction, and municipal service delivery. CPEC projects are expected to create smart cities that would have technological and knowledge spillovers ensuring sustainability.
- CPEC brings investments from the Pakistani private sector in ‘Low-carbon Urban Transportation’ and other ‘Clean Technologies for Cities’. In this regard, private sector in Pakistan can access to the international climate finance through Green Climate Fund (GCF) and other global funding opportunities.
- CPEC an economic corridor can become an ‘environmental corridor’ if the mechanism for development of the ‘Regional Renewable Energy Trade’ between China & Pakistan is formulated & implemented. Benefiting from the Chinese experience, Pakistan can move on the path of GREEN DEVELOPMENT.
Energy Pipelines and Transmission Lines between China and Pakistan
As first phase of CPEC has been completed, now the next phase is industrialization. For industrialization there should be sustainable and secure energy. China-Pakistan can adopt Oil and gas pipeline, and transmission lines model to connect its energy base. Gwadar port will greatly enhance connectivity of other provinces and areas with Baluchistan to facilitate further development. It is very close to geographical positions of oil and gas resources in the Middle East, offering low cost and much convenience. Adjacent to booming gulf countries, it enjoys convenient and fast transportation and low transport cost and risks. Large-sized cargo ships, oil tankers and passenger liners can conveniently berth as it is adjacent to the world’s main shipping lines. As the channel of Gwadar Port is short and deep, with a big transshipment area, ship turning takes a little time.
Gwadar as Trading hub
- Gwadar Port is one of the initial and key projects under CPEC. The port is being developed to meet the international standards having a capacity of 120 berths and will be able to deal with trade traffic of about 45-65 million tons (in 15 years) up to 300 million tons (in 50 years). It will strengthen the trade ties with landlocked countries and it is estimated that up to 4 percent of global trade will pass through Gwadar by 2020.
- The revenue from Gwadar port is estimated to be $US40 billion annually. About 70% increase is expected in maritime trade through Gwadar port along with Ports in Karachi.
- Properly functional Gwadar port will promote the development of petrochemical plant, clothing factory, cement plant and automobile factory and oil refinery.
Industrialization and Industrial Cooperation
- The development of Special Economic Zones (SEZs) is also a mandate of Belt and Road Initiative (BRI) and in line with this, 9 SEZs are also prioritized in Pakistan. The SEZs are placed in naturally rich regions to tap the regional potential of Pakistan. These SEZs will have the potential to attract FDI, to expedite industrialization process and improve the export base for manufacturing, food and minerals processing, herbs, wood and fisheries.
- Potential Chinese industries which are interested to relocate in SEZs in Pakistan includes light engineering, footwear, leather and textile which are labour intensive and will open job opportunities for unskilled labour. Some SEZs like Mohmand Marble zone and Quaid-e-Azam Apparel Park are dedicated to add value in marble and textile products respectively and improve the export base.
- Special incentives will be given to those enterprises in SEZs which will add 20% and more value in the products and to high tech related industries.
ICT Based Smart Cities
- As first phase of CPEC has been completed, now the next phase is industrialization. For industrialization there should be sustainable and secure energy. China-Pakistan can adopt Oil and gas pipeline, and transmission lines model to connect its energy base. Gwadar port will greatly enhance connectivity of other provinces and areas with Balochistan to facilitate further development. It is very close to geographical positions of oil and gas resources in the Middle East, offering low cost and much convenience. Adjacent to booming gulf countries, it enjoys convenient and fast transportation and low transport cost and risks. Large-sized cargo ships, oil tankers and passenger liners can conveniently berth as it is adjacent to the world’s main shipping lines. As the channel of Gwadar Port is short and deep, with a big transshipment area, ship turning takes a little time.
Growing employment opportunities
- According to the international labor organization, CPEC would bring more than 400,000 jobs to the country while the Applied Economic Research Centre has estimated that the mega initiative would provide around 700,000 direct jobs between 2015 and 2030. The Planning Commission’s data shows even more promising results, with CPEC generating around 800,000 jobs in the next 15 years. Besides, there will be a positive multiplier effect and more indirect and induced jobs will be created. Pakistan is about to gain a lot from these opportunities as there would also be a noteworthy increase in the annual economic growth of the country. CPEC created job opportunities are not only for laborers but also for professionals. For instance Port Qasim Coal Power Project conscripted hundreds of engineers to be sent to China for training. Being educated in China, and acquainted with the Chinese technologies and values, Pakistan has a prodigious competitive edge with this opportunity.
Cultural Exchange Programs under CPEC
- The MoU has been signed between Suzhou Vocational University and Education Department of Gilgit-Baltistan.
- The functions of CPEC CCC are as follows: Sino-Pak Students Exchange, Academic Research and Seminar, Vocational Education, Chinese Culture Experience Camp, Teachers Exchange and so on. CPEC CCC will cultivate the talents especially for “B&R” and CPEC, it will become the Brand Program in the field of Sino-Pak education and culture communication.
- CCC has a great piece of plan which is hundred talents of personnel education plan, in this plan, at least 100 students from Pakistan will be trained in higher education in China and get job offers. As a great piece of plan in 2017, CPEC CCC will offer them free tuition for the whole study.
Tourism Opportunities under the realm of Socio-Economic Sector
- CPEC will boost tourism in 73,000 sq. km region in Gilgit-Baltistan. This will be creating job opportunities for the local people and will further multiply the income prospects of the locality of GB. This is going to benefit not only the local people but it will also transcend its positive implication to other parts of the country.
- Also, Northern areas of the country for ecological tourism and southern coast line for coastal tourism have potentials to be tapped.
CPEC Educational opportunities
- CPEC Consortium of Business Schools: The consortium aimed at setting the course of academic collaboration between the two countries Pakistan & China. Top 10 business schools from both countries are the part of this consortium.
- Such initiatives will reshape the relationship of the universities with society by turning the former into an active player in economic development through creating scientific technological knowledge and innovation that goes beyond mere teaching and research but application of technological knowledge for the development in various fields.
- Scholarships for Pakistani students: CPEC is like a catalyst for economic development in terms of providing educational facilities. Chinese scholarships increased to 600 a year under CPEC for Pakistani students for the year 2016-17 from all over Pakistan. Moreover, about 131 students got scholarship certificates that further enhances the education exchanges programs in the times to come.