CPEC is a major Chinese project closely related to its One
Belt, One Road initiative that aims to boost Asian trade internally as well as
externally. The initiative is ambitious on an unprecedented scale. It dwarfs
the Marshall Plan which rebuilt Europe after the Second World War. It will
impact about 65 per cent of the world’s population, about one-third of the
world’s GDP, and about a quarter of all the goods and services the world moves.
We are fortunate to be part of it. However, it is time for Pakistan to move
from discussions around the project into developing a national vision that
takes full advantage of the opportunities presented. Much is at stake if we do
not do this in an accelerated time frame. Following are some of the major areas
that need to be addressed:
Environment: Environmental
cooperation is usually a major part of such agreements but this component has
yet to be addressed. This is a problem since it has been estimated that once
trade starts flowing up to 7,000 trucks a day will pass through the
ecologically sensitive Khunjerab Pass and generate up to 36.5 million tons of
Co2 emissions en route to Gwadar.
All experts agree that the emissions will melt the
northern region’s glaciers and negatively impact agriculture and food and water
security of our growing population. We need a solution and one that has not
been discussed so far is to use the project to facilitate the migration of our
transportation sector to first hybrid and then electric power. This will have
three major benefits. The repowering station requirements of CPEC transport
vehicles moving to electric power will accelerate and enable the early
migration of our remaining transportation infrastructure to renewable energy.
Oil-related products currently account for approximately a third of our annual
imports. It will free us from the circular debt problem associated with them.
Secondly, it will open up opportunities for the private sector to set up micro
hydroelectric plants in G-B, AJK and K-P and small-scale solar and thermal
power plants in Punjab, Sindh and Balochistan that generate power for the
vehicle repowering stations along the route.
Thirdly, if properly regulated this could allow
communities to be brought together in common economic interest to service the
traffic passing through their area (repowering stations, food outlets,
workshops, hospitals, etc). The vested economic interest will enhance security
and provide more confidence to the Chinese sponsors to increase investments
along this corridor.
If environmental impact is not addressed then as factories
get built in the economic zones, the pollution will further exacerbate our
problems of climate change. This is a great concern given that according to
PWSER research, Pakistan is on track to experience an African-style, large
scale water famine as early as 2025. The only solution is massive water
storage projects which can also generate cheap renewable hydropower electricity
for our residential, agricultural and industrial sectors. Currently, 35
per cent of our energy is oil based which requires foreign exchange externally
and has led to circular debt internally. The suggested projects will generate a
lot of employment and most of the large-scale construction could be locally
managed minimising foreign exchange requirements which depreciate the local
currency. We should seek assistance from the Chinese to set up a regional
carbon trading market that finances a lot of these renewable energy projects.
Ideally we should have been debating and finalising a comprehensive programme
put together by our government to address this upcoming crisis before this
time. In our democracy, an endeavour this big will take time to educate and
build national consensus and then it will take more than a decade to implement
this programme.
Industrial development: CPEC
is a game changer and opens up trade between the Central Asia and the Middle
East, Africa and Europe. Its major purpose is for China to increase its trade
with these regions by improving and simplifying logistics and transportation.
Currently imports into Europe from China account for about $450 billion which
has room to grow in a $7 trillion market. As trade increases along this
corridor, it would be foolish if Pakistan did not develop its own national
strategy to cooperatively capitalise and cash in some of the economic
opportunities presented. However our current exports are dominated by textile
and organic commodities with low value addition. Clearly, our current corporate
and SME sectors is by and large not ready to address this upcoming opportunity
and we are in danger of being swept aside.
An illustration of what can happen is found in many
marginalised communities who are situated along the Iran trade corridor in
Balochistan or the Afghan trade corridor in K-P and get no visible benefit from
the passing trade. Under the Obama Administration, USAID had announced a $40
million project called SME-A for intervention that provides technical
assistance to 6,000 SMEs in the areas of textile, ICT, light engineering,
hospitality, minerals, leather, logistics and packaging. Given what’s at stake,
the government should seriously consider taking a piggy back ride on this
initiative and expand collaboration if it continues in the Trump
administration. It should consider taking it over if for some reason the US
backs off the project.
Regional hub: CPEC provides an
unprecedented opportunity to Pakistan as it fulfills its geostrategic potential
as the gateway of trade between Central Asia to the Middle East, Africa and
Europe. It is ideally situated to become the defacto maritime trade hub between
the Europe and Asia. A regional hub provides many opportunities other than
logistics and transportation including legal, financial, marketing, business
communication and other services.
China has created the Asian Infrastructure and Investment
Bank and the Silk Road fund to support this realignment of global trade with
roles loosely defined around the World Bank and IFC. Many new institutions will
be required for instance similar to the World Bank International centres for
Settlement of International Disputes. Pakistan is in an ideal position to
develop these capacities if our government provides the enabling environment
for it through capacity development programmes, enlightened legislation and
policies. Our argument would be that Karachi is more suited location wise than
Mumbai or Colombo and cheaper than Singapore to address these needs. Pakistan
has in the past shown the ability to set up world-class institutions that
serviced global trade and can rise up to the challenge if it puts the right
people in charge. In time, the acquired competencies and broader understanding
of the benefits would give us the political will to overhaul our internal
justice system and inefficient bureaucracy. Ranked at 106/113 in the WJP Rule
of Law Index, this is something we badly need.
In conclusion, CPEC is a game-changing opportunity for
Pakistan. Global pundits are looking at the multi-trillion dollar investments
being made by China and saying that its effective utilisation is key to the
success of this vision. Similarly, for Pakistan, if we do not evolve a vision
of how we use this improved infrastructure and realignment of global trade in
this region for our benefit, and execute on it effectively we are in danger of
being left behind. Indeed it will be a shame if we do not rise to the
opportunity and fashion national consensus on an inclusive strategy that
leverages this project to propel a major part of our population, and not just a
few families, into the economy of the 21st century.
Published in The Express Tribune, March 30th,
2017.
Like Opinion
& Editorial on Facebook, follow @ETOpEd on
Twitter to receive all updates on all our daily pieces.
No comments:
Post a Comment