DALIAN: Pakistan has been smoothly implementing an ambitious plan to build an economic corridor with China, despite experiencing some challenges, Planning Minister Ahsan Iqbal said on Wednesday.
China has promised $57 billion in investment in projects along the China-Pakistan Economic Corridor (CPEC), part of its ambitious Belt and Road plan linking China with the Middle East and Europe.
Chinese President Xi Jinping proposed the Belt and Road project in 2013, but it is still short on specifics.
“We are smoothly implementing and we are very satisfied with the speed of the implementation,” Mr Iqbal, the Islamabad lead on the project, told Reuters on the sidelines of the World Economic Forum in the Chinese city of Dalian.
In addition to the investment pledges from China, Pakistan would invest close to $10bn, he said.
The economic corridor, to be completed in three phases by 2030, will boost Pakistan’s energy security and infrastructure, helping it attract more foreign investment, he said.
Mr Iqbal told the forum there were some challenges to be addressed, including on coordination among different government ministries and among “internal and external stakeholders”.
“There are a number of challenges which have to be addressed,” he said.
“There are actually many gaps that we have to correctly address. First and foremost is the coordination gap,” he said.
Pakistan and China aim to build a network of rail, road and energy infrastructure as part of the Belt and Road initiative. Pakistan has been one of the most enthusiastic supporters of the initiative, in part because many projects are for power plants to alleviate its chronic energy shortage that leads to frequent blackouts.
Addressing the 11th Annual Meeting of New Champions, also known as the Summer Davos, Mr Iqbal said that CPEC was creating opportunities for sustained growth by breaking cycles of poverty and under-development.
“CPEC is the flagship project of the Belt and Road initiative, which has turned an idea into a $50bn plus portfolio within a span of two years,” the minister said, adding that it would bring together the growth engines of South Asia, China and Central Asia, thereby leading to tangible economic benefits to three billion people of the region.
He explained that CPEC was bringing much-needed investment into the energy and infrastructure sectors, which had become investment starved and bottlenecks for faster growth.
“The investments are going to under-developed areas and connecting hinterlands with coastal areas. It is creating opportunities for sustained growth by breaking cycles of poverty and under development,” he said.
In response to a question, Mr Iqbal said that Pakistan’s macroeconomic indicators had witnessed across-the-board improvement in recent years. The budget deficit has been cut from 9 per cent of the GDP to less than 4.5pc, foreign reserves have doubled, GDP growth is at highest level in ten years, he added.
“This fact has been noted by international financial institutions and is evidenced by the increasing foreign investment in Pakistan — both from China and other countries,” according to Mr Iqbal.
“Investors are finding it impossible to overlook Pakistan’s 200 million population-market, with 60-80 million growing class of affluent consumers, and the government’s business-friendly policies,” he added.
The minister said that the increasingly visible success of the CPEC reflected the shared commitment of Pakistan and China to the project’s early and effective realisation.
“The fruits of CPEC are beginning to deliver instant results with reduction in power shortages and providing connectivity between remote places and developed areas, bringing economic opportunities for people,” he added.
Separately, Mr Iqbal also addressed a gathering titled ‘New Roads to Globalisation’ alongside senior representatives of the governments of Russia, Singapore and Moldova, as well as leading figures from international financial institutions and the private sector.
Published in Dawn, June 29th, 2017