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Alleviating Poverty?


The China–Pakistan Economic Corridor (CPEC) project initiated in 2013, with an outlay of $46 billion, includes building of road and railways networks, upgradation of the Gwadar Port, anddevelopment of several special economic zones (SEZs) in Pakistan. The CPEC has been dubbed as a game changer that will play the role of a catalyst for regional connectivity and development, not only for Pakistan, but for the entire region.

Two years since the signing of the CPEC, the country struggles to overcome bomb attacks on ordinary citizens carried out by terrorists and uneasy relationships on its eastern and western borders. One of the nine countries in the world that have nuclear weapons, four out of 10 Pakistanis live in poverty, according to the official multidimensional poverty index 2016. With an unevennational geography of poverty, 9.3% poor live in urban areas as compared to 54.6% in rural areas.

Sold as a hallmark of the success of the country’s foreign policy to gain political mileage in the national elections next year, CPEC is part of China’s One Belt One Road (OBOR) initiative. The OBOR vision, the world’s largest economic corridor and physical infrastructure development programme benefiting over 66 countries, extends from the Baltics in Europe to South East Asia, and from China to Africa. In a multipolar world ahead, China is keen to develop its influence in the world, and its friendship with Pakistan is based on geopolitical compulsions.

Whatever be the significance of the CPEC for Pakistan development planners and OBOR for China, Pakistan needs to achieve job growth that can reduce poverty, as nearly 40% of the country’s population lives in poverty and majority of this population (56%) lives in rural areas. Over the period of time, Pakistan must not see jobless growth if the country is to address the poverty issue. It is yet to be decided what will be the ratio of Pakistanis working in these CPEC-driven SEZs. However, the real test of these SEZs will be their role on establishing urban–rural linkages to help rural transformation reflected through improvement in the quality of the lives of the poor. To ensure inclusive growth, the SEZs must target the sectors where poor work exists (for example, in agriculture), and bedeveloped in places where the poor live, and use the factors of production that the poor possess.

The varied hinterland of Pakistanoffers new and unique opportunities to test the concept of local economic zones (LEZs). For instance, the Federally Administered Tribal Areas (FATA) of Pakistan, after being anointed by the Pakistan army provides workable environment for olive production. The climatic and soil conditions of the belt along the Afghanistan border of Pakistan is suitable for olive production. Italy and Spain are the largest exporters of olive oil to the United States; it is a multimillion-dollar industry. The land of FATA is underutilised and incentives by the local government to lay the foundation of olive gardens would provide input to oil pressing units in these regions. The finished product can then be transported through the road and rail networks built under the CPEC to West Asia, India, China, and beyond.

However, before the CPEC can deliver its promises on regional integration and collective economic gains, peace must prevail among the three land-connected neighbours, that is, India, Pakistan, and Afghanistan. At the moment, the situation is far from satisfactory with a high level of mistrust and frequent cross-border firings between Pakistan and its neighbours. Though it would be optimistic, in the interest of the poor people of this region, these South Asian countries need to fight the appalling poverty and inequality in their countries than fight with each other and benefit from this historic opportunity offered through the CPEC and the OBOR.

Abdur Rehman Cheema


Updated On : 7th Jul, 2017


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