How CPEC Phase II will galvanize industralization and

employment in Pakistan? Pakistan Affairs (CSS-2021)

Attempted By Faysal Hayat CSS`2020 Qualifier

A. China Pakistan Economic Corridor – A brief overview

1. The China-Pakistan Economic Corridor (CPEC) is perceived as a game-changer for
the South-Asian region and beyond.
2. China Pakistan Economic Corridor (CPEC), a flagship project of the Belt and Road
Initiative (BRI) launched by Chinese President Xi Jinping in his visit to Pakistan in
2015. In beginning, it was a $46 billion project.
3. CPEC is a great opportunity for Pakistan. CPEC connects us to China which is one
of the biggest markets in the world.
4. CPEC includes the various projects of energy, infrastructure, connectivity, as well
as social sector development.
5. The projects – including roads and railways from Gwadar in Pakistan to Xinjiang in
China – will cut short Beijing’s trade routes with the world through sea
approximately by 12,000 miles. The corridor will shorten oil, gas, and other trade
routes by thousands of kilometers by cutting overland from western China rather
than going around South and Southeast Asia by ship.
6. It is building strong roots to take economic growth to next level not only within
Pakistan but across the region.
7. As of now the estimated investment size of CPEC has reached beyond $60 billion.
B. Different Phases of CPEC
1. The CPEC projects in Pakistan are divided into three phases.
2. Pakistan has already set up projects like power production plants under phase-I
by 2020.
3. The country aspires to develop medium-term projects under phase-II by 2025
and long-term projects under Phase-III by 2030.
a. CPEC Phase-II
CPEC has now entered into its second phase. The key goals of the second phase
of CPEC are industrialization, agriculture, science, improving the livelihood of people,
and technology transfer to Pakistan. By 2025, the CPEC aims for: industrial system
approximately complete, major economic functions brought into play, the people’s
livelihood along the CPEC significantly improved, more-balanced regional economic
development. In short, the second phase calls for all the goals of Vision 2025
achieved.
b. CPEC Phase-II and galvanized industrialization in Pakistan
1. CPEC is a multi-layered project. Under CPEC’s second phase, the industrial base of
the country would be expanded which would help in increasing the country’s
exports.
2. As far as industrial development is concerned, productivity would be increased
and exports would see a big jump with a reduction in imports under CPECs second
phase.
3. Phase-II would redress the issue of the trade imbalance between Pakistan and
China.
4. As per a recent statement by Chief of Army Staff General Qamar Bajwa Chinese
companies were showing keen interest to invest in all three Special Economic Zones
(SEZs). He said that the process for relocation of the Chinese industry in Pakistan
was in progress.
5. Investment in the agriculture sector of both countries by establishing special
economic zones will boost cooperation in the Chinese and Pakistani agriculture
sectors.
6. Mango is Pakistan’s leading export and it is expected that the exported product
will be sold in supermarkets across China.
7. Joint venture in agriculture is the first step to reduce the price which can be
achieved through the introduction of technology and working with farmers and
exporters to set a reasonable price for imported fruits and vegetables.
8. Many products can be transported by road to China through the establishment of
a cold chain system that’s an initiative of CPEC. Up till now, the short shelf-life
products, like mango fisheries and other agricultural products, were exported by air
with increased prices. They would now be transported at a reasonable cost.
9. Pakistan produces a huge amount of cotton which can be exported to China as
Beijing has a vast number of textile industries. Balochistan is the only province
producing Onyx in the world and the Chinese have a specific inclination towards the
stone.
10. The gem was another area where Chinese joint ventures could help building
Pakistani industries especially exports of gold and copper to China. Pakistan has
abundant gems in northern areas but it lacks advanced technology to polish gems.
However, the Chinese could help the country to make beautiful jewelry products.
11. Moreover, Pakistan would be able to exchange skilled labor with China and
other countries of the region once the connectivity rail, road projects are completed.
12. Operations of the China-Pakistan Free Trade Agreement would decrease prices
as import duty would not apply to products.
13. The industrialization that is the main pillar of the second phase will provide
required sources of economic growth and help generate employment.
14. Furthermore, In Pakistan, cottage or household industries hold an important
position in the rural set-up. Most villages are self-sufficient in the basic necessities
of life. They have their own carpenters, cobblers, potters, craftsmen, and cotton
weavers. Many families depend on cottage industries for income. There is a great
demand for hand-woven [carpet]s, embroidered work, brassware, rugs, and
traditional bangles. These are also considered important export items and are in
good demand in international markets. CPEC upon completion would give away to
further the market outreach for cottage industry.
15. CPEC’s Special Economic Zones (SEZs) will play a pivotal role. SEZs would
provide basic infrastructure and impetus for industrialization. A special economic
zone is an area in which the business and trade laws are different from the rest of
the country. These zones are located within a country’s national borders, and their
aims include increased trade balance, employment, increased investment, job
 creation, and effective administration. A lot of industrialization in the province
which will solve the issues.
How exactly CPEC Phase-II would reduce unemployment in Pakistan?
Employment is considered the main factor for the trickle-down of economic benefit.
Therefore, the success or failure of industrialization will determine the fate and
perceived benefits of CPEC.
1. Pakistani officials anticipated that CPEC will enable the environment to create 2.3
million jobs between 2015 and 2030 and add 2-2.5% points to the country’s annual
economic (GDP) growth.
2. Connectivity with CARs would help Pakistan to access fuel rich regions of the
world that is likely to reduce the fuel crises alongside reducing the cost of fossil
fuels in Pakistan.
3. China-Pakistan Economic Corridor (CPEC) is a strategic economic project aiming
at increasing regional connectivity for the economic development of Pakistan and
China.
4. As many as 700,000 new job opportunities for local people are estimated to be
created by 2030 under the China Pakistan Economic Corridor (CPEC), according to
the report of The Express Tribune.
5. CPEC is not only expected to be beneficial for Pakistan and China but is also
expected to have positive spillover effects to other neighboring countries by
enhancing the geographical connectivity of Pakistan with landlocked Central Asian
states.
6. Investment in infrastructure undeniably increases and creates jobs in the service
sector.
7. About nine projects under CPEC have already been completed, producing
5,320MW electricity with an investment of $7.9 billion. The energy-generating
projects have provided jobs to 5,000 Pakistani citizens according to a report by
Business Standard.
8. CPEC Authority Chairman uttered that eight more energy projects are being
constructed to generate 4,470MW electricity with an investment of another $9.55
billion and would provide employment to over 15,000 Pakistanis.
9. As the main focus of the CPEC phase two is socio-economic development, trade
promotion, employment, and economic growth, so, the cause can only be fully
served through special economic zones (SEZs).
10. RSEZ in KPK is top precedence and is a flagship project of Khyber-Pakhtunkhwa
Economic Zones Development & Management Company (KPEZDMC) which will
implement it with the collaboration of the China Road and Bridge Corporation
(CRBC). The zone is spread over almost 1,000 acres and located near M-1 Nowshera.
It will have international standards infrastructure and will be developed in three
phases with almost $128 million.
11. RSEZ will transform the transportation services of the province along with
business and trade. After the start of its operations, it will become a hub of
economic activity for the province. According to stats shared on the eve of its
groundbreaking ceremony, RSEZ will produce 200,000 jobs in engineering
industries and food processing along with boosting business activities in the
province.
 12. It will also provide multiple benefits to Pakistan like an increase in
people-to-people contact and foreign direct investment in the coming years. The
special economic zone is likely to attract foreign investors which will increase
economic activities in Pakistan and this will spread its soft image to the world.
13. Chinese companies shared advanced techniques and successful experience
to help Pakistan modernize its human resources. They also sponsored thousands of
Pakistani students to study in China and sent hundreds of Pakistani engineers and
professionals to China for training on scholarships.
Conclusion:
Conclusively, CPEC Phase-II will not only galvanize the industrialization in
Pakistan by its multi-layered projects concerning improved business and connectivity
but it is likely to increase the employment opportunities for the people in various
sectors of the economy.
By Faysal Hayat CSS`2020 Qualifier
CSS Mentor (Current Affairs – Pakistan Affairs)
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