By: Zhou Rong Source: China Economic Net Published: 2020-03-16
Pakistan’s future is and will be dependent on export-led growth.The development of 10 special economic zones (SEZs) is vital to improve the capacity of the Pakistan export. SEZs are open for business people from all countries, as incentives under SEZs are the same for every investor. The investments in various sectors had started pouring in and the pace would pick up in the near future if Pakistani security situation would remain stable. The second phase of CPEC is about industrial and agricultural cooperation, so speed up SEZS is a must.
Pakistani government may fix the next phase as connectivity with regional and global markets, as a part of the Belt and Road Initiative (BRI), so for the next phase of Cpec, SEZs mutual establishments are even more important. The second phase of the Free Trade Agreement between China and Pakistan will surely further boost the growth in overall exports of Pakistan, not only to China, but will enhance SEZs as basis for CPEC-made or joint venture export. The second phase of CPEC is about the engagement of the private sector, local community and society at large, and also cover industrial cooperation, agriculture cooperation, social cooperation, poverty alleviation and cooperation in science and technology, with an aim to boost the economy of Pakistan as well as to raise the skill set and living standards of the local population, SEZs will surely be severing as export-led industry gardens.
If the government would not further enhance prices of electricity and gas and that the people and Pakistan export-led industry could not bear further pressure on that account, more and more investors will come to SEZs, things will be even better than expected.
The Pak economy now should sustain stability in the prices of gas and electricity.
Another good news is that it is estimated that Pakistan would be saving $5 billion as a result of the decline in the oil prices and lower oil prices will tend to reduce inflation thus raising purchasing power of the consumers please take this opportunities on time.
The Chinese investors have been showing keen interest in the SEZs and during the last six month Chinese private businesses have come into joint ventures of manufacturing tyres, buses, trucks and textile. They are also interested in investing in the SEZs, but the SEZs preferential policy towards foreign investments should go further and adjust more positive as much as incentive.
The economists believe that CPEC would boost the GDP growth to the extent of 2-3% which by any standards would be a substantial increase. It is significant that China embarked on the road to the phenomenal growth, development and poverty alleviation due to special economic zones which were established at different locations of the country. It proved a worth emulating model particularly in view of the priority being given by the Pakistani government to poverty alleviation and changing fortunes of the people through industrial development and export-led growth strategy.
On the regards of subsidy, Pakistan should make sure that all the subsidy was given only to those units that exported goods and was not availed by local industries, those who do not belong to the export-led should not on the list as Pakistan financial capacity should focus the most important sectors.Be sure to fully utilize savings in the Public Sector Development Programme. Not only that,the wheat support price should continue for at least next one year, which has already increased from by another Rs35 to Rs1,400 per 40 kilogramme, hopefully that supporting price will continue and do further preferential policy towards export-led industry and keep on doing this without sudden change. So a committee to devise a mechanism for better utilising the approved subsidy should play a key role to coordinate different interest groups.
Pakistani government should continue cheaper gas supply to export-led industries, such as textile, leather, carpets, medical instruments and sporting goods that are the major sectors for export.
On the regard of jointly cultural innovation, I would like to stress some points.
With more and more job opportunities brought about by the China-Pakistan Economic Corridor (CPEC), the number of schools and universities teaching the Chinese language is growing faster in Pakistan. Many top-ranked schools and universities including the National University of Sciences and Technology, Comsats University Islamabad and Arid Agriculture University Faisalabad have made Chinese language a part of Compulsory Education. But the issues are how much time we should spend on cultivate Chinese language speaking population. I am very happy to hear the news from Roots school in Islamabad. They started Chinese classes a decade ago, and at that time parents were not so interested in sending their children here, but now the situation is entirely changed, almost every parent wants his (or her) child to learn Chinese. Currently over 30,000 students are currently studying Chinese in different classes, especially for medical and applied sciences, is also becoming popular for Pakistanis, some of them studying on self-finance basis. all those information are encouraging. But for joint innovation and creation, we first need to overcome obstacles of languages which we mentioned every time but things have not yet solved. Only until Pakistan has larger Chinese language speakers and readers, that joint innovation and creation can be available and more likely, otherwise, the cooperation on cultural sectors will be more artificial rather than substantial.
China has brought a huge technological revolution in Pakistan over the last two decades through introducing smart phones.Chinese telecom company Zong provides one of the fastest internet and other telecommunication services in Pakistan. Zong had the highest number of 4G subscribers in Pakistan and it has recently tested 5G service in the country. The people who come from China bring with their good values which they share with Pakistani peoples, they are keen and very enthusiastic to teach locals about new technologies and share their knowledge with them, which will help Pakistani youth a great deal in their professional career. So, the cultural innovation should source from the ground cooperation and people’s real feeling from CPEC as well as people-to-people contacts by enhancing friendly and sister-province relationship and and sisiter-city forms of the two countries.
The Author is Senior professor of Chongyang Institute for financial studies of Ren Min University.