Today is the second day of Board of Investments (BoI) conference in Islamabad. One of the items on the agenda today was to discuss whether China-Pakistan Economic Corridor (CPEC) is a game changer for Pakistan and the region. Only that, thanks to an unexpected change in programme agenda, that very session has already happened yesterday, much to the dismay of delegations that were supposed to arrive today just for the CPEC panel.
Anyway, the answer to whether the CPEC would be a game changer or not, will most likely be a resounding yes. After all who could deny the potential growth in jobs, economic output, geopolitical significance and so forth, stemming from the corridors projects? The right question, therefore, should be whether or not Pakistan is prepared for CPEC.
To be well prepared for something, the relevant stakeholders ought to know all there is to it today; and ought to identify all that needs to be known tomorrow. Without a sense of clarity, everything will only be wishy-washy, hopey-changey, and a promise of a grand utopian future without a sense of how to get there.
Yet, to this day, there is a lack of transparency surrounding the subject. There is little clarity on how the concept will be operationalised. Except for the names of some major projects, key details are still missing. Sources tell us that the retired khaki officer working as project director in the Planning Commission holds the CPEC cards so closely to his chest that he doesn't even share pertinent information with his colleagues in the commission.
And without the details, the skeptic notion, that CPECs $46 billion promise is too big to be true, only gathers strength. Few people know that China's total stock of outward FDI to-date in any country (outside of Hong Kong & tax havens) is in the US, where it has invested $22 billion. Thats according to UNCTADs World Investment Report 2014. (For more on this subject, see BR Research column: Contextualising the $46bn Sino promise, May 22, 2015)
Even if we assume that the $46 billion promise is for real, the realisation that local financing would be required despite Chinese financing muscle hasn't seem to set in yet. How do banks, DFIs and the capital market plan to deal with it, and what are Finance Ministrys' and central banks' plans thereof? This question needs to be answered, too.
Is the third sector or the civil society ready as well? How many think tanks have come out with studies on CPEC with precise, actionable policy suggestions? The research outputs (if any) of Pak-China Institute in Islamabad, and those of Pak-China Joint Chamber of Commerce and Industry in Lahore are rather wanting, to put it euphemistically.
How many business schools have begun identifying the specific CPEC-related prospects for Pakistan's economy? What kind of geographical and business clusters, supply-chain, logistics, types of skilled labour, and news industries are we looking at? And have business associations, chambers or advocacy groups started doing such exercises? To this date, the industry-academia link remains weak for most pockets of Pakistan's economy, and CPEC is no exception to that.
And what is the HEC up to? If CPEC is so high on government agenda, shouldn't different universities have China Centers, each focusing on their niche areas? Despite decades of Sino-Pak friendship mantra, how many "Sinologists" or China specialists / scholars has this country produced?
Last, and sadly often the least, are the environmental concerns. Left unchecked and unplanned, all that infrastructure development in Gilgit-Baltistan and likely mushroom growth of trading towns and bustling markets along the Karakorum Highway and adjoining areas will bring along environmental hazards.
Does Gilgit-Baltistan government have enough will and wherewithal to deal with the market influx? Do the federal and Khyber-Pakhtunkhwa governments care for it? Already, garbage heaps in Abbottabad and neighbouring areas are nearly growing into hills right along those very green hills that everyone so loves to take selflessness with.
To conclude, CPEC offers a wealth of promise. Whether or not Pakistan's public and private sectors are prepared for needs to be discussed. Constructive skepticism would do no harm; rather it can identify the gaps and help fill them through calls to action.
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