Being the “key link” in Beijing’s multi-trillion dollar Belt and Road Initiative, Pakistan is among the few participating nations that has benefited most from Chinese investments made under the auspices of this international cooperation initiative.
Beijing’s investments in Pakistan’s energy and transport infrastructure projects during the past ten years have been the extent of Sino-Pakistani cooperation on the China-Pakistan Economic Corridor (CPEC), the core project of the Belt and Road Initiative (BRI) that aims to connect nations by rail, road, and sea lines.
Around $25 billion was invested by Chinese companies in Pakistani infrastructure development during a period when foreign investment was declining. However, there has been little advancement in industry or agriculture to increase exports or productivity. Around $25 billion was invested by Chinese companies in Pakistani infrastructure development during a period when foreign investment was declining. However, there has been little advancement in industry or agriculture to increase exports or productivity.
Physical infrastructure is essential for trade development and economic progress, but in order to address its ongoing debt and balance-of-payments crises, Pakistan must boost exports and productivity through foreign investment and technology transfer.
For this reason, a lot of people argue that Islamabad has lost a great chance to turn around its economy and has not been able to fully achieve the promise of CPEC.
Pakistan has benefited from China’s redoubled efforts to promote BRI global cooperation during the third Belt and Road Forum for International Cooperation, which was held this week to commemorate the initiative’s tenth anniversary. In addition, Beijing has committed to investing $1.5 billion in this region’s refinery industry and financing and modernising the Peshawar to Karachi train line at a discounted cost of $6.7 billion.
During his participation at the forum in Beijing, interim prime minister Anwaar-ul-Haq Kakar signed these agreements and had meetings with President Xi Jinping and Prime Minister Li Qiang.
Bilateral cooperation in these crucial areas has previously been hampered by a number of factors, including the dollar liquidity crunch, bureaucratic roadblocks, reckless remarks made by PTI ministers against CPEC investment, the agonisingly slow progress being made on Special Economic Zones to create industrial infrastructure that will enable the relocation of Chinese industry, subpar regulatory and policy regimes, and more. The Covid epidemic, Beijing’s strained relations with the West, and its worries about the safety of Chinese nationals employed in Pakistan also contributed to the deceleration of BRI and CPEC.
President Xi’s statement to the forum that Beijing is reclaiming its role as the pioneer of “economic multilateralism and globalisation” and is shifting from “sketching the outline” to “filling in the details” is indicative of this.
In order to create a green, open, and inclusive economy, the question is: are we prepared to take use of this second opportunity to fully realise the promise of cooperation on the CPEC?
