In an effort to strengthen the nation's faltering economy, Pakistan's new administration intends to give initiatives covered by China's Belt and Road Initiative some much-needed impetus.
Ahsan Iqbal, Pakistan?s federal minister for Planning, development, and Special Initiatives, who also co-heads the committee responsible for the China-Pakistan Economic Corridor, mentioned that the South Asian nation is considering joint ventures for renewable energy projects, collaboration in agriculture, and potentially attracting some Chinese companies to relocate to Pakistan. He shared his optimism, stating that he had recently been in China and had meetings with their senior leadership. He expressed seeing significant interest on the Chinese side to reinvigorate momentum for CPEC and advance it into the second phase. This was conveyed by Iqbal at his office in Islamabad, where a large map showcasing the China-Pakistan Economic Corridor adorned the walls.
With CPEC, which includes new power plants and a port in the southern town of Gwadar, Pakistan was viewed as the premier location for BRI projects. Following the COVID-19 epidemic and Pakistan's ongoing economic challenges, which have necessitated the participation of the International Monetary Fund, new project development has paused.
For the past two years, Pakistan's Prime Minister Shehbaz Sharif, who was elected to a second consecutive term in February, has been trying to rekindle commercial ties with China. When Pakistan joined the BRI in 2013, Nawaz, Sharif's elder brother, was the leader of the nation. Approximately $25 billion worth of projects, including power plants that eliminated the country's long-standing electricity shortfall, were completed during the first phase.
A Pakistani committee approved a long-delayed railway upgrade project last week, but scaled it down from $10 billion to $6.8 billion. The railway, in its first phase, will run from Karachi, the southern coast city, to Multan, a little over halfway to the capital, Islamabad.
Iqbal mentioned that the Sharif government had completed several key Belt and Road Initiative (BRI) projects that had been pending for years. These included a water supply project in Gwadar, dredging work at the port, and an electricity transmission line from Iran.
He expressed that these accomplishments had significantly contributed to reinforcing China's perception that the new government was once again committed to CPEC initiatives, thereby restoring their confidence in Pakistan's seriousness. He further stated that to commemorate the tenth anniversary of CPEC the previous year, China's Vice Premier, He Lifeng, unveiled five new corridors, including one focused on growth to enhance economic activity in Pakistan. The remaining corridors were associated with livelihood, innovation, green energy, and regional connectivity. Iqbal noted that Sharif was likely to visit China soon.
One change in the second phase would likely involve Islamabad taking a step back while urging the private sector to forge partnerships with Chinese firms. The other big focus, albeit a long-shot prospect, is to try and attract Chinese firms thinking of relocating from China amid rising labour costs and heightening geopolitical tensions.
He added that such a visit would be considered a success, particularly given the current trend of over 80 million jobs being relocated from China to other countries due to high costs. Iqbal pointed out that these jobs had moved to countries like Vietnam, Laos, and Cambodia, leading to overcrowding, and China was actively seeking new destinations