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CPEC-Opportunities and Challanges for Pakistan

Posted on June 21, 2019 at 01:00 PM

The China Pakistan Economic Corridor (CPEC) was inaugurated in April 2015 and brought a promising investment of US $64 billion in Pakistan. The CPEC project helped Pakistan to overcome energy crisis and it is the flagship project of China's one belt, one road initiative and it is aimed to enhance connectivity amongst Pakistan-China and Eurasia. It consists of an array of transportation and energy along with the development of Special Economic Zone and it will be completed in 2030.

The energy sector takes the largest share of CPEC investment which is 72 %. The second largest investment in CPEC is the transportation sector which includes the construction of roads and railways system and the other major thing is the development of Special Economic Zones.

Pitfalls for CPEC

CPEC holds strategic importance for Pakistan and China, but how successfully these countries execute the project. The lack of information sharing between the government and Public also undermines trust. Since the era of PML-N lack of information has raised many questions and fear among the people. And these issues will cause a major dissatisfaction among the people and institutes. And keeping the fiscal tight budget will cause the incompletion of projects in Pakistan or late completion of projects.

The business community has also some doubts about the foreign direct investments and it is feared that after the completion of CPEC, Chinese goods will flood into the market and the domestic industry of Pakistan which is already facing issues and will face the competition of Chinese goods as PML-N government is accused of providing favours to Chinese investors and investment. While the Sino-Pak free trade agreement and issues have trust issues between both countries.

The purpose of the Special Economic Zone in Gwadar may be seen as giving the economy of undeveloped Balochistan and to overcome the issue of water in the province and distillation plants are the only efficient solutions for this problem but a lack of financial resources has made it unrealistic strategy. The distillation plant set up in Gwadar and Karwat is supposed to provide the capacity of two million water daily but has only the production of 0.3 million of water on a daily basis.

However, the construction of new dams in Balochistan government has constructed new dams like Diamar and Dasu dam for KPK and Gilgit Baltistan regions respectively who believe that the resources are being used in other provinces.

However, the non-flexible and strict terms and conditions leading to unsuccessful negotiations between Pakistan and China. As the Pakistani government backed away from Diamar Bhasha dam in 2017 due to unrealistic terms and conditions.

China wanted to take ownership of the entire project which was declined from the government. Thus Diamar Bhasha Dam was excluded from CPEC projects. Now the project is being funded by Pakistani


The critical analysis of CPEC shows that it is not a win-win situation as it looks rather it is a continuum of challenges and opportunities. It is an economic opportunity and depends upon how government utilises may depend on many variables.

The Pakistani government should share the secret terms and conditions and share them with the Public and business community.

The Pakistani government should encourage academics and experts to come forward and exchange dialogue with Chinese strategists.

Before finalising the projects with Chinese the Pakistani government should ensure all parties about project.

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