Pakistan unveils long-term CPEC cooperation plan

Published: August 30, 2016
SHARES
Email
Bilateral payment mechanism to be established to ease pressure on foreign reserves. PHOTO: AFP

Bilateral payment mechanism to be established to ease pressure on foreign reserves. PHOTO: AFP

ISLAMABAD: Pakistan unveiled on Monday the synopsis of the China-Pakistan Economic Corridor (CPEC) long-term plan that envisaged cooperation in the job-intensive sectors with words of caution from Chinese experts who spoke about risks to smooth implementation of the partnership framework.

The government shed light on draft of the long-term plan for the period 2025-30 during the CPEC summit held in Islamabad on Monday.

CPEC: Perils ahead for Pakistan

So far, discussions have focused on priority and actively-promoted projects, which are expected to be completed between 2018 and 2025.

China Development Bank prepared the draft of the long-term plan, specifying the timing for development of the economic corridor. The CPEC is part of China’s strategic ‘One-Belt, One Road’ initiative, known as OBOR, which talks about connecting about 64 countries in three continents.

The long-term plan talks about establishing a bilateral payment and settlement mechanism to reduce the need for third-party money and ease the pressure on foreign exchange reserves. Central banks will put in place a relatively stable exchange rate mechanism and continue to implement and expand the scope of bilateral currency swap agreements to Rs520 billion.

“Most of the pillars of the long-term plan will deal with the provincial projects and the contribution of provinces will be critical for their success,” said Planning Commission’s CPEC Centre of Excellence Executive Director Dr Safdar Sohail, while discussing broader contours of the plan.

The plan identifies key areas and major projects including the development of an integrated transport system, IT connectivity, energy cooperation, industrial parks, agricultural development and poverty alleviation.

CPEC to introduce technology in agriculture

The other areas of cooperation will cover livelihood, water resources, livestock, people-to-people communications and financial matters.

Discussions had also taken place between Pakistani and Chinese authorities on final draft of the plan last week.

Under the plan, agricultural information project, storage and distribution of agricultural equipment and construction project, agricultural mechanisation, demonstration and machinery leasing project and fertiliser production project for producing 800,000 tons of fertiliser and 100,000 tons of bio-organic fertiliser will be implemented.

Other projects include livestock breeding, livestock and poultry breeding base cleaning, livestock and poultry product processing centre, disease prevention and control system, planting and breeding and agricultural product processing.

“As per proposed targets, gross domestic product will grow by another 1.5% from 2016-20 and another 1% from 2020-30,” said Sohail.

He said the annual average trade would increase 24% from 2016 to 2020 and 16% from 2020 to 2030. The annual average investment growth is expected to be 25% from 2016 to 2030. He said the contribution of industry as a percentage of GDP would increase 1.5% and about 800,000 new jobs would be created.

Challenges

“The OBOR will be the largest economic belt in human history that will link Central Asia, South Asia, South East Asia and Africa,” said China Institute of International Studies President Su Ge.

Su said the CPEC framework revolved around Gwadar port, energy, infrastructure construction and industrial cooperation.

However, he said the CPEC could face challenges and risks. “The risks include security environment, changes in international politics, changes in national development policies and cultural and ethnic differences.”

Modi spoke India’s mind over CPEC

“No matter what difficulties may arise, we need to keep in mind the broader picture,” he remarked. Power Construction Corporation of China (CPCC) Chairman Yan Zhiyong highlighted the security issues, facilitation of investors and problems in land acquisition as the problematic areas.

CPCC is among 500 Global Fortune Companies. It is investing in many power and infrastructure projects of the CPEC including the Port Qasim power plant, Gwadar power project, Sahiwal coal-fired power plant, Karot hydroelectric power project and Karachi-Lahore motorway.

“The new challenge to the CPEC is from the public debate that has resulted in protests,” said China CPEC consultant Zhu Xingiang. “The implementation of CPEC could be adversely affected due to the existing disputes.”

He also advised avoiding unnecessary expectations from the CPEC at the initial stage of implementation.

He sought an end to arguments over the CPEC route and advised Chinese companies not to operate in isolation and instead become active on social media.

“It is important to carefully spell out the risks and challenges so that we can do better contingency planning,” said Adviser to Prime Minister on Foreign Affairs Sartaj Aziz while chairing a session of the CPEC summit. 

Published in The Express Tribune, August 30th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (11)

  • secularnationalist
    Aug 30, 2016 - 10:50AM

    “He also advised avoiding unnecessary expectations from the CPEC at the initial stage of implementation.” People need to realize that whatever our governments are doing, is what they have planned to make this venture a long term financially viable project to turn around our fortunes as a nation. People at the provincial level need to stop crying to get a bigger piece of the pie, as it’s not you who gets to decide what will work and what not. Let the federal government work, please. I’m not a big fan of PMLN but we need to give them some space for this thing to kickstart.Recommend

  • BrainBro
    Aug 30, 2016 - 5:30PM

    This CPEC is a project to serve the needs of China and its Chinese low wage workers, who would be brought in to do all the work. Even electricity projects in Pakistan are being constructed by the low wage Chinese workers, NOT the local Pakistani labor.
    CPEC is nothing but the world’s biggest “China Town.” What would be funny is if the GHQ makes India its best friend in about 30 years time to help it rid itself of a “foreign occupation” by the Chinese.Recommend

  • Abdus Samad Khattak
    Aug 30, 2016 - 6:35PM

    Nawaz & Co advise every one not to speak against the projects in Punjab under CPEC . Anyone who demand uplift of the underdeveloped area , are called to by Indian spy. They are bragging of the development although unable to just control load-shedding. stupid and corrupt leadersRecommend

  • Darvesh
    Aug 30, 2016 - 6:58PM

    Pakistsn should set up burn center across India as good will gesture after all they are our neighbors.Recommend

  • ashar
    Aug 30, 2016 - 7:37PM

    CPEC zindabadRecommend

  • Shuaib
    Aug 30, 2016 - 10:53PM

    @BrainBro: In that case Indians should support CPEC.Recommend

  • hamza khan
    Aug 31, 2016 - 12:12AM

    @BrainBro:
    keep dreaming veggie eater. the labor for this is being contracted by both chinese and pakistani workers. i have seen this with my own eyes. Recommend

  • hamza khan
    Aug 31, 2016 - 12:26AM

    well done! this is good to hear, and should significantly contribute to the growth of pakistani economy over the coming 10-15 years. this ensures our stability and our ability to give india more headaches. hahahahRecommend

  • syed & syed
    Aug 31, 2016 - 12:57AM

    Western route should also be mentioned and projects in Baluchistan and KPKRecommend

  • Sandip
    Aug 31, 2016 - 1:32AM

    @Darvesh: Agree. After all when everything is taken and you have nowhere else to go and nothing else to give, that’s where you all are going to end up. At least for once you are showing some foresight. Way to go buddy!!!Recommend

  • curious2
    Aug 31, 2016 - 4:19AM

    You can’t even provide a link to the synopsis your discussing? Classic CPEC.Recommend

More in Business