Home » Blog » Indirect benefits
CPEC KKH Gojal Hunza

Indirect benefits


MANY critics have rightly highlighted the exclusion of economically enfeebled Gilgit-Baltistan from the $46 billion worth of investments for the China-Pakistan Economic Corridor. However, provided that GB shows the capacity and shrewdness to harness its indirect, trickle-down benefits, there is little ambivalence about the project being a harbinger of prosperity and development in the region, even if these opportunities are enormous challenges waiting to be transformed.

Considering the political hot potato that is CPEC, understanding its implications and fashioning appropriate development policies is the sine qua non for GB policymakers. In an era where evidence-based policymaking is the hallmark of successful governments, the scarcity of research and data poses a significant challenge to understanding CPEC’s benefits, let alone channelling them into development. As policies based on assumptions and rhetoric only create confusion, establishing a CPEC-specific research institute wou­ld be a step in the right direction. In addition, the institute could study potential issues of environmental degradation resulting from CPEC.

Next is the energy crisis. As no hydropower project or any other energy project has yet been identified in GB under CPEC, another issue around the corner is how the government will tackle the energy crisis. Without ensuring continuity in electricity supply, at least in the major cities, attracting investments will not be easy, rendering job-creation claims mere rhetoric. Speaking recently at a seminar in GB, Minister of Planning Ahsan Iqbal highlighted prospects of linking the regional power grid to the national grid. The purpose of doing so, he claimed, is to export surplus power (out of an anticipated 40,000 MW) to the rest of the country. While this is ambitious, its gestation period will be at least seven to 10 years; meanwhile, GB needs a short-term, emergency solution to reap benefits soon.

Further afield, the region has witnessed severe fuel shortages with increasing frequency. This summer, it led to hundreds of tourists being stranded for many days. Previously given short shrift, strategies to ensure the adequate supply of fuel to cope with rising traffic are imperative.

GB must harness CPEC’s potential.

Likewise, GB’s government has hitherto shown little appetite for reforming the tourism sector and promoting entrepreneurship. Under CPEC, tourism is expected to expand, accompanied by an expansion in related industries. The government must capitalise to reduce unemployment among educated youth by providing them with training, apprenticeships and easy access to credit. If this apathy is not addressed, CPEC-related businesses will be grabbed by non-locals, only to create unrest and frustration among the locals. Balochistan is an example.

Another matter of importance concerns technical training for the potential labour force. On the one hand, Karakoram International University (GB’s only university) is producing an army of educated yet unskilled labour. On the other, there is the burgeoning unemployment rate. CPEC gives hope. Without providing training to graduates in skills required for CPEC-related opportunities, however, their hopes cannot be realised. Although the government has already announced the establishment of a technical institute, setting it up and making it function remains a bigger challenge.

GB must also take advantage of the policy window now open under the aegis of CPEC. Building partnerships between KIU and universities in Xinxiang, linking respective chambers of commerce and trade associations, and encouraging students/teachers exchange programmes are just a few policy responses the government can study.

CPEC heralds not just the reincarnation of the ancient Silk Route but also the revival of major cities (especially Gilgit city), which for centuries remained the hub of economic activities and trade. As the capital of the province and now a gateway to CPEC, the strategic importance of Gilgit has increased manifold. Sadly, its expansion is mismanaged and ill-planned. Once CPEC is operational the city will expand ruthlessly, accompanied by in-migration, heavy traffic, and a high demand for housing, healthcare and other services. This must be addressed for CPEC’s potential benefits to manifest themselves, and it must be done while factoring in indigenous rights.

Most importantly, tackling CPEC’s critics will arise time and again. Silencing critical voices by labelling them unpatriotic will not serve our national interests. Allowing for dialogue, even grievances, will not only strengthen regional democracy but also ensure the sustainability of CPEC.

And finally, despite the step-motherly attitude of the centre towards it, Pakistan remains GB’s lifeline; local citizens opted for it 69 years ago and they remain steadfast in their commitment. By not allocating funds out of $36bn worth of energy investment, however, their political deprivation is now coupled with economic deprivation. Harnessing CPEC’s indirect benefits remains the only way ahead for the GB government and its people to gain advantage from it.

The writer holds a PhD in economics and public policy and teaches at Karakoram International University, Gilgit.

Twitter: @saranjam79

Published in Dawn, September 30th, 2016


Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter