NAME: Umer Khan

SUBJECT: PAKISTAN STUDIES/ ISLAMIYAT

Lecturer: Sir Bilal Ahmed

STD ID: 1954-2021

 Q#1 : Write short note on cpec?

CHINA PAKISTAN ECONOMIC CORRIDOR:

China-Pakistan Economic Corridor (CPEC), massive bilateral project to
improve infrastructure within Pakistan for better trade with China and to
further integrate the countries of the region. The project was launched on April 20, 2015
when Chinese President Xi Jinping and Pakistani Prime Minister Nawaz Sharif signed 51
agreements and Memorandums of Understanding valued at $46 billion. The goal of CPEC is
both to transform Pakistan’s economy—by modernizing its road, rail, air, and
energy transportation systems—and to connect the deep-sea Pakistani ports
of Gwadar and Karachi to China’s Xinjiang province and beyond by overland routes.
(Xinjiang borders the countries of Mongolia, Russia,
Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, and India, and the ancient Silk
Road ran through its territory.) This would reduce the time and cost of transporting goods
and energy such as natural gas to China by circumventing the Straits of Malacca and
the South China Sea. The announcement of joint space and satellite initiatives between
Pakistan and China, spurred by CPEC, followed in 2016. CPEC is part of the larger Belt and
Road Initiative—to improve connectivity, trade, communication, and cooperation between
the countries of Eurasia—announced by China in 2013.

CPEC is an ongoing development mega project which aims to connect Gwadar Port of
Pakistan to China’s northwestern region of Xinjiang, via a network of highways, railways,
and pipelines. The economic corridor is considered central to China–Pakistan relations and
will run about 2700 km from Gwadar to Kashgar.

China-Pakistan Economic Corridor and its connectivity with Central Asia, Middle East and
Africa will help to shape the entire region. Overall construction costs are estimated at
around $46 billion, with the entire project expected to be completed in several years.

The Corridor is an extension of China’s proposed 21st century Silk Road initiative. This is
the biggest overseas investment by China announced so far and the corridor is expected to
be operational within three years. The corridor will be a strategic game-changer in the
region and would go a long way in making Pakistan a richer and stronger entity.

The CPEC projects, investment on the corridor will transform Pakistan into a regional
economic hub. The corridor will be a confidence booster for investors and attract
investment not only from China but from other parts of the world as well. Other than
transportation infrastructure, the economic corridor will provide Pakistan with
telecommunications and energy infrastructure.

MAIN COMPONENTS OF CORRIDOR:

1. Gwadar ( including port and city and Gwadar region socio-economic development)
2. Energy (Coal, Hydel, Wind, Solar, LNG, Transmission)
3. Integrated Transport & IT systems including Road, Rail, Port, Air and Data
Communication Channels
4. Agricultural Development
5. Socio-Economic Development (Poverty Alleviation, Medical Treatment, Education,
Water Supply, Vocational Training)
6. Human Resource Development
7. Investment & Industrial Cooperation (Gwadar Free Zone and other industrial parks
to be finalized)

Q#2: How can we improve our growth of Pakistan?

IMPROVEMENT OF ECONOMICAL GROWTH OF

PAKISTAN:
Here are my top ten most important things for the government of Pakistan to get right in
order to have sustained economic growth. This is by no means an exhaustive list. I
acknowledge that I have had to leave some really important issues out.

The government should have a clearly defined understanding of the problems in these
areas, develop critical key performance indicators (KPIs) to track its own performance,
and provide periodic progress updates to the public to ensure better accountability.

1. INTRODUCED MARKET BASED REFORM IN ENERGY SECTOR:

The government needs to introduce market-based reforms in the energy sector – for both
electricity and natural gas – based on a transfer of control over the distribution
infrastructure to provinces.
The government should also bring market-based reforms in the petroleum sector.
Currently, the government of Pakistan sets the wellhead price, the retail price, refining
margins, as well as investor returns, all of which incentivises rent seeking behaviour and
poor resource allocation. This has also caused Pakistan to have the highest electricity
rates in the region at 12 cents per kilowatt-hour (kWh) as well as reduced annual gross
domestic product (GDP) growth by 2%.

The government has to move away from actively participating in markets to a role of a
regulator of markets through empowered institutions that encourage competition.

2. ESTABLISH WORLD CLASSIC SCIENCE BASE ACADEMIC INSTITUTION IN PARTNERSHIP WITH

CHINESE:

These knowledge spillovers will be critical to support long-term productivity growth. We

also need the government to support e-learning and upgrade the primary and secondary
school curriculum to include problem solving (logic/mathematics), critical
thinking/reasoning (science/philosophy), creative expression (art and humanities) and
principle-based decision making (values/ethics).

3. PRICE WATER USAGE AND STOP AGRICULTURAL SUPPORT PRICE ESPECIALLY SUGARCANE:

About 90% of water in Pakistan is used to generate only about 5% of the GDP. And GDP
productivity is only $1.5 per cubic metre of water, versus the global average of $8 per
cubic metre. Water is already scarce – we have less than 1000 cubic metres per capita in
Pakistan – yet we are producing water thirsty, low value-added crops which can easily be
imported, and yet at the same time we are importing water value added crops like
vegetables and legumes. Fun fact about Pakistan: agricultural productivity actually
increases during droughts due to lower “market failure” as farmers switch to more water
productive crops.

4. INCREASE THE TAX NET THROUGH PROPER DOCUMENTATION WHILST REDUCING TAXES
ON FORMAL SECTOR:
This will help access to formal financing for the small and medium enterprise (SME)
sector, which currently accounts for only 5% of bank financing. The government also needs
to push for the elimination of the practice of double book-keeping, as well as encouraging
greater use of technology-based solutions, which will lead to more productivity gains.
In addition, the government of Pakistan must take immediate and meaningful steps to
increase credit to the private sector – such as through tax incentives. Private sector
credit in Pakistan is currently at just 18.8% of GDP, versus 50% in India. More credit to
the private sector will have a multiplier impact on GDP growth.

5. DIVERSIFY AND EXPAND THE EXPORT BASE THROUGH NEW PRODUCTS, NEW SERVICES
AND NEW MARKETS:

Our exports have not changed much since the Indus Valley Civilisation traded cotton and
grain with Mesopotamian empires over 5,000 years ago. Cotton textiles and foods still
account for over 70% of Pakistan’s exports. We need the government to create specialised
industrial zones that will be based on manufacturing of goods to export but for new
products and markets (such as engineering, chemicals, electronics and food products).

Also, the government needs to support the development of formalised information

technology services export sector – IT consultancies, business process outsourcing (BPO),
etc. – through a cluster approach. No country has ever gone from developing to developed
without exports. and we need to target having an exports-to-import ratio of 2, from the
current 0.5.

6. ENCOURAGE THE DEVELOPMENT OF A DIGITAL INFRASTRUCTURE IN ORDER TO BRIDGE

THE DIGITAL DIVIDE AND DEMOCRATISE LEARNING AND MARKET:

Every 10% increase in broadband penetration increases GDP growth by 1.2%. Fixed-line
broadband penetration – the most reliable and high-quality kind – is still only 0.25% of
the population. Over 50 million people live in areas that have 3G or 4G cellular coverage
but still do not have access to a smartphone. This needs to change.

7. INTRODUCE MARKET-BASED REFORMS AND INVESTMENT IN THE TRANSPORT INDUSTRY ,

ESPECIALLY HIGH SPEED RAIL, PORT INFRASTRUCTURE AND INTRA-CITY TRANSPORT:

Currently, about 92% of all land transport is through trucks, which is among the highest in
the world. Poor logistical efficiency leads to a loss of competitiveness for local industries,
poor city planning, environmental degradation, and poorer living standards.

8 .ENCOURAGE LOCAL AND INTERNATIONAL TOURISM:

The potential for large scale employment and foreign exchange inflows through tourism is
enormous. Plus, it gives the country a softer image and allows for more exchange of ideas
and capabilities. There is a tremendous opportunity in this sector, given Pakistan’s natural,
historical, religious, and cultural assets. Yet a total of 17,823 tourists visited Pakistan in
2019 compared to 1.9 million visiting Sri Lanka, 10 million in India, and 39 million in
Thailand.

9. REDUCE THE PROPENSITY FOR REAL ESTATE TO BE USED TO PARK BLACK MONEY:
This artificially increases asset prices, thereby reducing the ability for people to buy
homes through mortgages. Pakistan has one of the highest home price-to-annual income
ratio at 11:1 versus 8.35 for the UK, even though interest rates are much lower
there. Loans to bank employees are more than the entire mortgage market of the country.
Also, the government should consider federal insurance schemes to kick start mortgage-
based financing, which will substantially increase private sector credit and create demand
for many ancillary local industries.

10. INVEST IN ENVIROMENTAL AND SOCIAL ASSETS

Pakistan is the 7th most vulnerable country to the effects of climate change and has one
of the lowest forest cover, currently at 2% of our land area. Furthermore, the health
impact of a poor environment is large due to poor water and air quality-related medical
issues, especially amongst the most vulnerable segments of the population. About 75% of
medical issues in children in Pakistan are due to water- and airborne diseases.

In addition, greater involvement of women in the labour force will also drive economic
growth. The female labour force participation rate in Pakistan is 18% versus 59% in
Thailand.

Q#3: List down the important industries of

Pakistan?

IMPORTANT INDUSTRIES OF PAKISTAN:

Industries, on the basis of the respective production, can be classified into three kinds:

a. Capital goods industries

b. Consumers goods industries
c. Agro-based industries
The details of these Pakistani industries are given as under:

a. CAPITAL GOODS INDUSTRIES:

The industries which produce further capital are called ‘capital goods industries’ therefore,
machine, tools, parts, raw material producing industries are included in the capital goods
industries. The capital goods industries in Pakistan are given below:

1. Iron and Steel Industry:

No country, without the development of Iron and Steel Industry, can develop economically.
All the developed countries are developed due to the developed iron and steel base. Pakistan
does not produce steel according to her needs therefore; the gap between demand and
supply is bridged up through import of steel. Pakistan Steel is the steel producing project
which could, no doubt, be regarded as the pioneer of Heavy Industry in Pakistan.

2. Engineering Industry:

Engineering Industry is of strategic importance for the industrial development. Modern

Korea, Taiwan, Singapore and Malaysia are economically prosperous because of development
of engineering industry. This industry, due to reasons, could not develop in Pakistan
therefore; the engineering goods are imported to cater the local needs. Heavy Mechanical
Complex (HMC) is a big name in the Engineering industry in Pakistan. This complex has been
manufacturing complete cement plants and sugar plants. Moreover, it is also producing
Boilers, cranes, road making machinery and different items for Pakistan Railways.

3. Automobile Industry:

Automobile industry create constructive effects on tractors, threshers and other

agricultural tools, defence vehicles, automobile and other industries which include metal
wires, fiber glass, paints, rubber, plastic and glass industry. The first automobile plant was
established in Pakistan Automobile Corporation (PARCO) was established in 1972. Presently,
Pak. Suzuki Motor Company, Hino Pak, Alghazi Tractors, Gandhara Nissan were producing
automobiles with recent addition of Toyota and Honda Motors.

4. Electronic Goods Industries:

Electronic goods include many items like electric fans, bulbs, Heaters, transformers,
batteries etc. Siemens Engineering Company has been playing an important role in
producing electronic goods. Electronic goods industries in Pakistan are engage in producing
cold storage plants, air conditioners, radio, refrigerators, television, audio, cassette etc.
5. Chemical Fertilizer Industry:

Pakistan is an agrarian country therefore; fertilizer industry is of strategic importance

here. The first chemical fertilizer plant was set up at Daud Khel and the second was
established at Faisalabad. As a result of Nationalization programme in Pakistan, the
private fertilizer plants were transferred to National Fertilizers. There are 10 chemical
fertilizer factories in Pakistan which are producing Nitrogenous and Sulphate fertilizers.
6. Petro-Chemical Industry:

All the goods that are made of petrol and natural gas are concerned with the Petro-
chemical industry. These goods include artificial fiber, plastic detergent and rubber.

b. CONSUMER GOODS INDUSTRIES:

Consumer goods are the goods which are used to extract utility or the satisfaction
directly like cement, sugar, leather etc. Following are the consumer goods industries in
Pakistan.

1. Pharmaceutical Industry:

At the time of inception of Pakistan in 1947, there was pharmaceutical industry in

Pakistan and all the medicines used to be imported. P.I Dogar Company and Frontier
Chemical Works were making some minor medicine at the time at Lahore and Peshawar.
Today there are 235 licensed pharmaceutical units out of which 32 are multipurpose.

2. Leather Goods Industry:

Pakistan, as an agrarian country, is rich in cattle wealth like oxen, cow, buffalo, goats,
camel, sheep etc. Moreover, Pakistan is also a Muslims country where meet is main in food
items. This is the reason that the raw materials (hides and skin) for leather goods industry
is abundantly available here. The future of leather goods industry in Pakistan is very
bright. The centers of leather goods industry in Pakistan are at Karachi, Hyderabad,
Multan, and Lahore. The leather goods include shoes, leather begs, leather garments etc.

3. Cement Industry:

There were two cement manufacturing factories in Pakistan in 1947; Daimian Cement and
Associated Company of Bombay. In the light of importance of cement for the construction
work in the country one cement plant was established in Hyderabad with the name Zeal Pak
and white cement plant at Daud Khel named Maple Leaf. Presently, there are 22 cement
plants in Pakistan out of which 8 in Sindh, 9 in Punjab, 3 in NWFP, one in Islamabad and one
plant in Baluchistan. The cement plant under completion is National Cement Plant, Cement
Plant of Petro, Army Welfare Cement Project and Associated Cement Wah

c. AGRO-BASED INDUSTRIES:

Agro-based industries which, for their raw material, depend on agriculture like textile,
ghee, sugar edible oil, tobacco, fruit/vegetable processing industries. Agro-based
industries of Pakistan are given as under:

1. Cotton Textile Industry:

Cotton textile industry is the most important industry in Pakistan because it contributes
60 percent of total exports of the country and it is 18 percent of total heavy industrial
output. Cotton is the raw material for cotton textile industry which is the cash crop of
agricultural sector. Textile industry developed fast during fifties and sixties but after
the Nationalization process of 1972 in Pakistan it has been converted into ‘sick’ industry.
Presently, there are 503 textile factories in Pakistan.

2. Sugar Industry:

After textile, sugar industry occupies the second important place in Pakistan. Sugar cane
and Sugar beat are the raw materials for sugar industry which are the agricultural crops.
There are 74 sugar mills in Pakistan out of which 38 are in Punjab, 30 in Sindh and 6 are in
NWFP. Sucrose proportion in sugar cane of Sindh are embodied more than that of sugar
cane of Punjab, therefore, concentration for installing the new factories is being given in
Sindh.

3. Edible Oil/Ghee Industry:

Edible/Ghee industry is the biggest one which uses imported edible oil. Edible oil is
achieved seeds of soya bean, sunflower and cotton and cotton and Canola as well s palm. All
these are the production of agricultural sector. Pakistan imports soya bean and palm oil in
bulk. There are 9 ghee producing plants with Ghee Corporation of Pakistan.

4. Tobacco Industry:

Tobacco is the cash crop of agricultural sector. ‘Virgina’; the best tobacco is cultivated in
Peshawar. The other kinds of tobacco are cultivated in Rawalpindi, Multan, Lahore,
Bahawalpur and Khairpur Divisions. Tobacco is also cultivated in Baluchistan. Mostly,
‘Filter’ tobacco is produced in Pakistan which is used in Cigarette Industry. Apart from
Filter, other kinds of tobacco are Virgina, Flue cured, Verly and While Ash. There are
123 cigarette factories in Pakistan. Eighty four percent of total market demand of
cigarette is met by 3 big cigarette companies including Pakistan Tobacco Company, Lexon
Tobacco and Premier Tobacco Company