ANALYSIS over CPEC’s role in driving Pakistan’s economy
China and Pakistan have decided to widen the scope of the China Pakistan Economic Corridor (CPEC), the Economic Times reported, adding that the two countries have signed new agreements to launch industrial, agricultural and socio-economic projects under this initiative.
Why take this step at this very sensitive moment? In recent months, the project has been blamed for causing a debt trap and economic woes for Pakistan.
There is speculation that Pakistan’s attitude toward the CPEC has caused dissatisfaction in China and that Beijing may be hesitant about continuing to offer loans for the project.
New projects will help reduce public misunderstanding of the CPEC. It’s a flagship project of the China-proposed Belt and Road initiative. Although the project does face some difficulties, it is unlikely that China will change its supportive attitude on the CPEC.
China’s efforts to push forward the CPEC won’t be given up halfway. The CPEC has created an opportunity to support economic growth in the South Asian country, instead of an unbearable debt burden. Debt from China makes up only a small part of Pakistan’s total burden.
The latest developments involving the CPEC add to evidence that the two countries believe the project will bring tangible benefits amid the current economic woes.
Several years after its launch, the CPEC has laid a foundation for sustainable economic development through infrastructure improvement. Perhaps now is the time to launch the second stage of the project to turn its focus to areas including industry, agriculture and socioeconomic projects, and further develop the Gwadar Port.
Some Middle East countries have showed an interest in investing in projects under the CPEC framework.
It is normal and natural for China and Pakistan to call for the accelerated development of the economic corridor and widen the scope of the project to attract more investment.
The CPEC’s development may appear to slow down in the past few months, sparking concern that Beijing is hesitant about further investment. But it always takes time to discuss issues and details before drawing up detailed plans to launch a new stage of a project. At its second stage, the CPEC will play a bigger role in Pakistan’s economy as the project focuses more on manufacturing and agriculture.