‘CPEC opens door to golden circle of trade for Pakistan’

LAHORE: China’s “one belt and one road” concept has provided Pakistan with a great opportunity to accelerate trade in the "golden circle" of China, Russia, Pakistan, Iran and Turkey, experts said on Saturday. 

“It is only because of Chinese initiative that Pakistan has finally been able to understand the importance of its strategic location,” said Dr Salman Shah, a leading economist, keynoting a discussion where majority of speakes saw huge opportunities for Pakistan in the China-Pakistan Economic Corridor (CPEC).

“Economic concepts have changed hands in last one decade that. Today China is the greatest proponent of free trade, while United States, under Trump, is looking inwards.”

Saying that the CPEC has definitely has the potential of benefiting Pakistan, Shah however warned that it would not happen immediately.

“Over the years Pakistan has neglected the trade potential of China that is the largest global economy with a GDP of over $18 trillion, while $2 trillion worth of exports and equally valued imports have made China the global trade leader.”

Dr Shah added that China has the state of art technology and they are capable of supplying goods of various qualities according to the demand of the buyer.

Dr Shah revealed that in 2004 the Chinese had the same per capita income of $1500 that we have now. “In 13 years their per capita income has crossed $10000. If China can do it then so can Pakistan provided it played its cards right and strengthened its institutions,” said Shah. He further revealed that even in 2004 the Chinese possessed better skills and education than Pakistanis had now. The golden ring, Shah said, has the potential to become the most lucrative economic center of the world as after the CPEC, Pakistan has access to many global economies. “Currently Pakistan-China trade is dormant much below its potential. To exploit this potential the rulers should give preference to updating its transport and logistics system,” he said. He continued that Pakistan would have to develop world class logistics to handle an estimated $500 billion annual trade to be conducted through this route. “Private sector would have to be encouraged to invest in transport and logistics. The government simply does not have the resources or the competence to handle this trade,” said Shah.

The economist was of the opinion that to achieve this, the government would have to deregulate prudently in consultation with private sector and the customs would have to provide seamless services. “Special economic zones are good but they should not be Chinese specific and other economies and the private sector in Pakistan should also be facilitated in this regard,” he said adding the economic corridor should be fully secure. He said at present only the North-South corridor was secure, while much needs to be done at East-West corridor that connects Pakistan with Iran and Turkey.  “The hardware of the CPEC is being provided by the Chinese but the software part pertaining to the implementation through strong institution is very weak,” he said.

Shamshad Ahmad Khan, former foreign secretary, said Pakistan faces no external threats as the real threat came from within. “When ethnicism is given priority over nationalism, there’s no accountability,” said he.

Recalling the past, Khan said that during his days as an ambassador to South Korea, former prime minister Nawaz Sharif visited the Asian tiger with the then prime minister Mohammad Khan Junejo and was stunned by the shining progress of Koreans. “Sharif was told the three secrets behind Korea’s astonishing economic success were rule of law, meritocracy, and motorways; however when he assumed power he only remembered the motorway” said Khan adding that. About the absence of economic diplomacy, Khan said that diplomats work on the direction given by the government. “There are four parts of economic diplomacy i.e., trade, investment, loans and grants, but all Pakistani governments have been interested in loans and grants more than anything else,” said he.

Khan observed that Pakistan’s strategic location like a double-edged sword is both an opportunity as well as a threat at the same time. “There are many powers that want to deny Pakistan the benefit of its strategic location. In this situation, the nation and the armed forces will have to remain vigilant to protect the economic corridors,” said he and concluded that governance was a far bigger issue than foreign policy.

Dr Akmal Hussain, Dr Tahir Pervaiz and others also gave their views on the strategic importance of Pakistan and the trade potential of golden circle.