Research Article

CPEC and Karachi: Give and Take Scenario


    By Munazza Danish

Karachi being the most populous city of Pakistan has become the focal of attention not only on national level but on global level as well since the announcement of OBOR and CPEC. However its a bit debatable whether CPEC will contribute more to Karachi or vice versa. There are many schools of thought regarding the subject but the need for a comprehensive answer still exists as none has found a suitable response.

Regional integration is a dominion scheme among countries to promote stable growth, macroeconomic cooperation, connectivity and harmony through common bodies and rules. The concept of regional integration is multidimensional. However, the key attribute is economic or trade integration. The Asia-Pacific region is an energy resource ravenous area where China is on the lead with India coming next. On the other hand there are regions full of resources which are Central Asia and Africa. These regions are connected by a communication zone and Pakistan is located in the center of one such zone. China is attempting to use this dynamic region and its ports as China's 60% oil transport is dependent on the sea routes. This makes CPEC a pearl among the strings of OBOR.

China-Pakistan Economic Corridor is a mix of projects which includes multiple infrastructure and energy projects. The value of CPEC has risen from $46 billion to $62 billion. The Chinese Dragon, seized the opportunity and while avoiding the "Malacca Dilemma" has engaged Pakistan in one of the most important venture of history known as OBOR and its flagship project CPEC. While India, on the other hand is trying to establish a corridor of its own, The North South corridor. The success of such a venture is yet to be seen. Irrespective of the fact that Gwadar will become the gate way to China, the main benefit runs in the transit trade. Yet Karachi is going to get most of the advantages in terms of economic development primarily due to its diversified human resource.

Two generations of Karachi have gone through a transformation. These generations, on one hand, has seen boom, progress and development, where on the other hand, has also been the victim of destruction, demonstrations, gangs, mafia, anxieties, migrations, ransom, issue of power shortages, issue of human resource, violence, issues of rations, ethnics, conflicts and at the same time economic conflicts turning into a fact of everyday life. These generations have seasoned through these hard times and because of all these reasons have become stronger, and better prepared to face challenges. This aspect makes Karachi a dynamic city where there are enormous extents of growth and development.

Karachi is the 7th largest city of the world, where people are eager to see economic, infrastructural and social development. They are expecting ample benefits from CPEC which is not just a corridor but a cooperation between two countries. The population of Karachi has grown rapidly in the last few decades and it has more than over 23 million people, with a population density of 63,000 per square mile. Karachi is vibrant, full of resources and CPEC will not only lead Karachi to economic growth, but it will also help to learn what system and approach China opted to achieve diverse objectives and attained success. CPEC will generate economic zone in Karachi and this would upshot in specific mega long term benefits like the 1100 km long road from Karachi to Lahore, Dhabeji project, Karachi, Peshawar main railway line, three energy projects in Sindh includes a 330 MW project for Hub and the third one is Thal-Nova project for 330 MW. Karachi Circular Railways, Orange Line trains for all provincial capitals, the Keti Bander Port and a lot more in coming days will surely help Karachi to transform into a new horizon. It is estimated that the investment under CPEC will be more than equal the Foreign Direct Investment (FDI) that has come into Pakistan since 1970, an amount that is forecast to equal nearly 17% of the GDP. There are huge chances of growth especially in transport sector, construction material, food, skilled labor, health and education, agriculture, and above of all the mobilization of human resources will also take place in Karachi.

Besides the developmental benefits, there are ample of other benefits which will not only advantage Karachi, but will impact on the entire country. CPEC projects are likely to create 1 million jobs in various sector of Pakistan by 2030. In addition to direct impact of CPEC, economists believe that there will be a multiplier factor and long term investments will surge many other businesses that would result in future mega-projects and their spillover effects into other sectors of economy such as in the real estate. Britain State magazine "Economist estimated that in 2015 the GDP of Pakistan marked the growth up to 5.7 percent, making it the fifth fastest-growing Muslim country of the world leaving behind other Muslim countries like Malaysia, Indonesia, Egypt and Turkey.

Karachi will receive benefits from CPEC at large as it has the potential to contribute due to an already established industry of skilled human resource. According to Karachi Chamber of Commerce, 76 % of entrepreneur who succeeded in the last 15 years in Karachi were of the age 30 to 44 years providing the fact that people are fervent and ready to contribute in progress. The United States Agency for International Development (USAID) and United Nations Development Programme (UNDP) trained 200 young women and men under the joint Youth Employment Project. The project provides training and job opportunities in the garment industry to young women and men from conflict ridden and marginalized areas of Karachi. To date, the project has trained over 7,000 people in garment-manufacturing skills and provided job opportunities to more than 4,000 youth. Karachi will be able to deal with all the upcoming challenges, opportunities and thus contribute in the success of CPEC.

Lastly, there is a huge responsibility on government of Pakistan to make the most of all opportunities and maintain law and order situation. According to Dr Moonis Ahmar Former Dean, Faculty of Social Sciences, University of Karachi, CPEC is not without challenges and impediments if we would not be able to provide the required peace and stability for the successful completion of this project. The government must meet the deadlines for construction of roads, railways and power stations and regulate forces effectively to ensure security and eliminate those who are trying to sabotage this project aimed at bringing down foreign investments and derail country from the track. There is a need to control corruption, nepotism and inefficiency which are the major impediments in the launch of any successful mega-project.