13/04/2023
China has been contributing to Africa’s economic growth, both in terms of trade and with building infrastructure. All over the continent, it has built roads, railways, ports, airports, and more, filling a critical gap that western donors have been shy to provide just as in the case of Pakistan.
The concern that CPEC will strictly create jobs for Chinese nationals can be answered by the fact that rising Chinese wages in certain sectors may lead to Chinese manufactures to export jobs to Pakistan if it can find cheaper labour. One such example is Zambia, where some 300 Chinese companies now employ around 25,000 people. Ethiopia’s shoemaking sector has also benefitted from Chinese investment that has created jobs and exports. Likewise, according to government estimates, CPEC will create around 2 million new jobs directly and indirectly.
Pakistan is no ‘golden sparrow’
A third reason why CPEC is different from EIC is that there was no yearning for foreign investment at the time by the Mughals when EIC worked its way in. In fact, it was the other way around, as the British had their eyes on the riches of the sub-continent, whose share of the world income stood at 27% in 1700 AD (compared to Europe's share of 23%) - which plummeted to 3% in 1950 when the British finally decided to leave.
CPEC challenge and opportunity
However, prior to the investment that CPEC brought in, Pakistan was no ‘golden sparrow’ for China to eye. Along with its dwindling economy, massive energy shortages, grave security concerns, Pakistan had an image problem which had kept foreign investment far away from reach hence the need is Pakistan’s.
Just consider that CPEC investments, spread over 15 years, will bring a total of up to $51.5 billion; around $35 billion on the energy front in an Independent Power Producers mode and the balance going to infrastructure development. This is likely to increase Pakistan’s GDP from 4.7 per cent to around 6 per cent by 2019.
Local checks and balances
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