Pakistan’s latest shot at industrialisation under CPEC needs homework

Planning Commission’s deputy chairman Sartaj Aziz says joint ventures with Chinese counterparts need of the hour


Shahbaz Rana March 18, 2018
PHOTO: REUTERS

ISLAMABAD: The new phase of industrialisation - this time powered by the China-Pakistan Economic Corridor (CPEC) - will not be possible without joint ventures between Chinese and Pakistani businesses, said Planning Commission Deputy Chairman Sartaj Aziz.

Aziz was apprehensive that Pakistani business leaders were not yet ready to take benefit of industrialisation under CPEC. He was speaking at a forum organised by the Pathfinder Group to underscore the need of projecting the country’s soft image at international forums.

The industrial cooperation under CPEC offers great opportunities and Chinese were considering shifting their industries to prioritised Special Economic Zones (SEZs) of CPEC, said the deputy chairman, a veteran economist.

But full benefits of the SEZs cannot be reaped until Pakistani businessmen enter into joint ventures with Chinese partners, said Aziz. He said that his feeling was that the Pakistani entrepreneurs have not done their homework.

Under the second phase of CPEC, Pakistan and China plan to set up at least nine special zones across the country, although the local authorities have yet to resolve issues that could hamper Chinese investment.

Pakistan sees investment in SEZs as its second phase of industrialisation, which would not only increase per capita income but add hundreds of thousands of jobs.

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Aziz said that Pakistan’s economy was also dependent on global economic growth prospects but the countries have started looking inwards, which is detrimental to global growth. In such a scenario, the exports prospects are not very bright but CPEC provides the balancing factor to Pakistan, said the deputy chairman.

A recent report of the International Monetary Fund (IMF) has projected double digit growth in exports for fiscal year 2018-19, starting from July. For the next two years, IMF projections also show growth in exports in the same league, which is double the projected growth in imports.

Aziz said that the $60-billion CPEC bonanza is a big opportunity for Pakistan’s economy. During first eight months of the fiscal year, the Chinese foreign direct investment was equal to 60% of the total foreign investment in Pakistan.

Aziz also underlined the need to project a soft image of Pakistan in Davos at the World Economic Forum (WEF) meet-up. The deputy chairman said that Pakistan’s economy was at a turning point and this was the best opportunity to showcase it to the global elites.

In 1992, Pakistan was the darling of the WEF when people were curious to know about the country that surpassed India in economic growth, said Aziz who at that time was finance adviser in the then prime minister Nawaz Sharif’s cabinet. Aziz said Pakistani business leaders should attend the Davos forum to improve their business prospects.

In 2018 Davos WEF meeting, people from various walks of life had been invited from Pakistan by the Pathfinder Group to present their points of view at the prime gathering of global elites.

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The movers and shakers of the world attend the Davos gathering every year and Pakistan has to put its foot there to address the image problem, said Dr Huma Baqai, an associate professor at IBA Karachi.

Ikram Sehgal, chairman of the Pathfinder Group, said that that every country should invest in Gwadar, which one day would become the hub of Pakistan’s tourism and a gateway to the rest of the world.

Board of Investment Chairman Naeem Zamindar said that Pakistan needs to target 9% annual economic growth rate and only then could it attain full economic potential.

The government is currently in the middle of setting next fiscal year’s economic growth rate target.

Published in The Express Tribune, March 18th, 2018.

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