Naghmana A. Hashmi
Human beings have always craved community and connection. It is evident from a cursory look at the history to realize that the world today, with all its technological and social development, cultural diversity, languages and heritage is the result of millennia of intermingling of different peoples – sharing ideologies, cultures and enriching each other.
The creations that come from shared experience have built our societies and led to our most monumental inventions and deepest insights about the world around us.
Geographical isolation has always been seen as the main hindrance to economic progress and development.
- Whether it was the ancient Silk Route, Grand Trunk Road, RCD rail connection, KKH, Eurasian land bridge, Trans-Siberian Rail or now BRI and CPEC connecting China to rest of Asia, Africa, Middle East and Europe have all enriched and developed the nations along these routes. In the 21st century, Connectivity, particularly regional connectivity, has gained prominence reflected in the increasing demand for resources to be invested in linking communities, economies and countries.
- President Xi’s vision of regional connectivity and people-centric development model through BRI should be seen in this context and the established trend of Globalization. CPEC is an important part of BRI serving as the buckle with Gwadar Port as the Jewel in the crown. Connecting Gwadarto Xinjiang in China through a network of highways, railways and pipelines to transport goods, technology, oil and gas and fiber optic cable for flow of knowledge, presents enormous opportunities to people from Gwadar to Kashgar and beyond.
- The strategic concept of connectivity between Pakistan and China has been in the works for decades. It originated with the decision to build the Karakoram Highway linking Pakistan and China through Khunjrab Pass. The two sides moved towards translating the concept into reality with the decision in 2001 to construct a deep sea port at Gwadar. The financial package for linking KKH to Gwadar port with a network of roads and bridges, reviving the energy sector of Pakistan, establishment of Special Economic Zones (SEZs) and project layout of CPEC was agreed in April 2015 during President Xi”s visit to Pakistan taking a big stride forward for accomplishing the vision of connectivity and development.
- CPEC has huge strategic significance for Pakistan and has helped Pakistan lay a strong energy and road infrastructure for subsequent development of industry, agriculture and human resource. It has already provided seventy thousand jobs to the youth along the CPEC route. Therefore, completion of CPEC including operationalization of SEZs should remain a priority for Pakistan irrespective of the criticism and negativity spread by our detractors and efforts by them to sabotage CPEC through acts of terrorism. More than ever before, a national consensus on CPEC across the political spectrum is of paramount significance to ensure its smooth implementation opening the path for enhancing growth and development of Pakistan in earnest.
- With the first phase of CPEC nearing completion, the focus should squarely be on the fast track development and operationalization of Special Economic Zones (SEZs), sustainable development, poverty elevation, agriculture, health care and knowledge economy. Proper establishment and successful running of the SEZs are of critical importance for CPEC to take off and contribute to the long awaited socio-economic development of Pakistan and the region. SEZs can attract investment in low and high-technology products, lead to product diversification, promote exports, create employment lead to growth of manufacturing and services sector,enhance business activities, lead to technology transfer, skill up-gradation and improve external competitiveness through the development of a better supply and value chain provided the SEZs they are supported by the right policies.
- In order to be successful in Pakistan, SEZs need to be supported with the right incentives and planning, including an effective design, ease of conducting business and effective implementation and management of SEZs. To maximize the benefits, sufficient linkages between the SEZs and the rest of the economy need to be ensured. The success of SEZs does not depend solely on the institutional framework and administrative bodies. It requires a multitude of other factors including location, ease of doing business, good governance, a transparent policy regime and good infrastructure. Factors such as location, availability of land, price of land, connectivity, infrastructure within and outside the SEZs, autonomy of the SEZs, fiscal and other incentives, supporting regulations and type of governance affect the success or failure of an SEZ.
- It is heartening to see that finally the government has announced some incentives and have reduced the cumbersome administrative requirements and clearances for the Chinese investors in SEZs but more needs to be done to attract FDI from China and third countries. For Pakistan developing world-class infrastructure inside SEZs should be a priority. The government needs to take a proactive role to ensure that SEZs are developed to attract the best enterprises from China and other countries. Badly developed SEZs will only attract substandard enterprises. The above mentioned elements are essential to maintain the attractiveness of SEZs.
- SEZs in Pakistan still face several challenges that are easily manageable if a central, clear and uniform policy is adopted for SEZs throughout the country. The Federal and provincial governments must be in sync on the methodology and incentives for the development of SEZ. Presently the barriers faced by SEZs include; institutional mechanism and its implications; challenges related to land acquisition; location; sharing of infrastructure and the business model; barriers related to fiscal incentives; challenges related to backward and forward linkages, unavailability of skilled labour; lack of basic amenities on plug and play model and many more.
- 10. Pakistan is situated at the nexus of the four most dynamic regions of the world. Through CPEC Pakistan and China should aims at the establishment of an efficient and integrated system of communications and transport, in order for both to benefit from and contribute to the regional dynamism. If Pakistan wants to be part of the global production networks and value chain, we have to fully grasp the concept of economic corridors and cross-country partnerships. The success of economic corridors in Asia is based on the concept of how domestic trade and subsidy policy can be linked to SEZs and trade agreements. Pakistan is now actively promoting economic corridors, and the experiences of China and ASEAN countries in promoting and developing regional and sub-regional corridors will benefit Pakistan.
