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‘CPEC offers great economic potential’: Report

ISLAMABAD: The World Bank, Asian Development Bank (ADB) and several other international development agencies have observed that the $60 billion China-Pakistan Economic Corridor (CPEC) offers enormous economic potential for Pakistan.

The participant agencies — Britain’s Department for International Development and the Japan International Cooperation Agency — have discussed several economic corridors in various parts of the world in a joint report titled ‘The Web of Transport Corridors in South Asia’.

However, appraisal simulations for CPEC and the Kolkata-Dhaka corridor suggest that complementary measures are needed to improve local conditions that, in turn, will create formal jobs and generate tax revenues that could pay for such corridor investments.

Commenting on the report, World Bank Country Director for Pakistan Illango Patchamuthu said that the upcoming Khyber Pass Economic Corridor project is an example where trade facilitation and the development of local economic activities are explicitly integrated in the project’s design.

The report notes that the many transport corridors proposed across Asia would cost trillions of dollars to implement, far exceeding the financing resources available.

Hence, countries need to prioritise the most promising corridors that will deliver the expected transformative impacts for their economies and people.

Engineering designs and geopolitical considerations could be important, but sound economic analysis is the key to designing truly successful corridors, the report argues.

The ability of large-scale transport investments to generate wider economic benefits depends on the population density in the areas they cross. Their capacity to spur structural transformation along the way depends on complementary factors around the transport corridors, such as the skills of the local population or restrictions on local land use.

Published in Dawn, March 23rd, 2018

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