PUBLISHED
August 06, 2023
Between months of political turmoil and a long-drawn-out process to unlock crucial funding from the International Monetary Fund, Pakistan’s economy finds itself at a critical crossroad. Born from a perfect storm of minimal reserves, soaring public debt, inflation, and a depreciating currency, compounded by wider instability, the crisis shows no signs of imminent recovery, much less sustainable growth.
With staving off default the top priority for Pakistan’s planners in the foreseeable future, it would appear unlikely the government can spare much for development, despite any optimistic promises. Still, against this backdrop, a beacon of some hope may appear in the shape of the second phase of the China-Pakistan Economic Corridor.
The visit this week of China’s Vice Premier He Lifeng to Pakistan to commemorate the 10th anniversary of CPEC held immense significance as both sides agreed to revive Phase-II of the flagship project of the Belt and Road Initiative (BRI). Corresponding to the visit, President Xi Jinping’s statement that China will work with Pakistan to aim for high-standard, sustainable and livelihood-enhancing outcomes and further build CPEC into an exemplary project of high-quality Belt and Road cooperation, has added further impetus to the project, offering hope for economic revival.
Alongside the revival of CPEC Phase-II, Vice Premier He Lifeng’s visit has also heralded , expanding cooperation into new domains such as rural revitalisation, agricultural development, industrialisation and green development. By focusing on these areas, Pakistan aims to unleash the potential for inclusive growth and prosperity across the nation.
At a time when Pakistan faces severe economic challenges, the renewal of CPEC’s second phase comes as a timely opportunity to address the country’s immediate needs while paving the way for long-term development. As BRI’s flagship project, CPEC has already demonstrated its transformative impact on Pakistan’s infrastructure, energy, and regional connectivity. Now, with the initiation of Phase-II, the partnership between China and Pakistan is set to deepen further, solidifying their strategic relationship.
The expansion of cooperation into rural revitalisation and agricultural development holds immense potential to uplift Pakistan’s rural communities and boost the agriculture sector—a crucial backbone of the country’s economy. Additionally, the focus on industrialisation and green development aligns with Pakistan’s aspirations for sustainable growth and environmental conservation. Through the transfer of technology and expertise, CPEC’s second phase promises to enhance Pakistan’s capabilities in these critical areas.
Vice Premier He Lifeng’s visit to Pakistan and the signing of six MoUs demonstrate China’s continued commitment to the success of CPEC. Despite global economic challenges and geopolitical complexities, China’s unwavering support signals a firm belief in the project’s potential to bring mutual benefits to both nations.
As CPEC enters its second phase, President Xi Jinping’s statement takes on heightened significance. By emphasising high standards, sustainability, and livelihood enhancement, Xi underscores the importance of inclusive growth and the well-being of the people at the heart of CPEC’s objectives. This reaffirms the project’s commitment to fostering shared prosperity and a closer China-Pakistan community with a shared future.
Moreover, President Xi’s statement of standing firmly with Pakistan, regardless of changing international landscapes, further solidifies the all-weather friendship between the two nations. In a time of global uncertainties, China’s steadfast partnership provides much-needed reassurance for Pakistan’s economic revival efforts.
Despite criticism from Western analysts, with accusations of ‘debt-trap diplomacy’, CPEC has not solely relied on bilateral governmental investments; it has attracted private Chinese investments across various sectors, stimulating employment and economic opportunities in Pakistan. Moreover, China’s foreign policy, emphasising non-interference in the internal affairs of other sovereign states, has led to limited meddling in Pakistan’s politics or economic policies, unlike some Western multilateral financial institutions.
To fully capitalise on the opportunities presented by CPEC’s second phase, Pakistan must prioritise political stability, policy continuity, and broad-based economic reforms. The government’s focus on fiscal discipline and economic growth aligns with the goals of CPEC, making it essential to overcome internal challenges and create an enabling environment for investment and development.
As President Xi’s upcoming visit to Pakistan approaches, anticipation builds for further high-level discussions and agreements that will reinforce the trajectory of CPEC’s success. It is a momentous occasion that will not only deepen China-Pakistan ties but also set the stage for accelerated progress in the second phase of this transformative economic corridor.
Recent developments surrounding CPEC, thus, offer a glimmer of hope amid Pakistan’s economic crisis. With Vice Premier He Lifeng’s visit reinvigorating Phase-II and President Xi Jinping’s reaffirmation of cooperation, CPEC’s significance as a driver of growth and shared prosperity remains unshaken. As Pakistan navigates through its economic challenges, CPEC stands as a beacon of opportunity, promising transformative development and cementing the enduring friendship between China and Pakistan.
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