The economic benefits of the modern silk road: The China–Pakistan Economic Corridor (CPEC)
CPEC and its impact on the people of Pakistan
The China Pakistan Economic Corridor (CPEC) is an unprecedented undertaking for Pakistan. The Chinese Ambassador to Pakistan, His Excellency Mr Sun Weidong, has summarised CPEC and its benefit in the following manner.
‘[The] China-Pakistan Economic Corridor is a major and pilot project of the Belt and Road Initiative, to which the leaders of our two countries have attached great importance and rendered active promotion. It has also won the across-board support from our two peoples as it aims to provide new opportunities to the citizens as well as bring new impetus and vision to China–Pakistan friendship.
‘CPEC is a long-term and systematic project to promote economic cooperation through collaboration on Gwadar port, energy, transportation infrastructure and industrial cooperation.
‘CPEC will bring solid benefits to our two peoples. With the completion of energy and infrastructure projects, conditions in Pakistan will improve
There will be more electricity integrated into [the] national grid and the electricity supply will be more stable. People will enjoy more convenient transportation and a better livelihood. Alongside the major projects, we are setting up social welfare institutions, especially in Gwadar, in the form of [a] primary school, vocational training centre, and [a] hospital with [the] Chinese government’s grant. We will also provide KPK province with medical, educational and training projects in line with the need of local people, to translate the benefits of CPEC immediately among them. For average persons, the outcomes of the CPEC are tangible, accessible and enjoyable to hundreds of thousands [of] families across the country’ (CPEC 2017a).
Change is imminent
In an online survey of around 500 finance and business professionals, conducted for this report, 79% of them expressed the view that businesses will adapt to the changes engendered by CPEC and such adaptations will be made in the business plans of organisations in Pakistan within one to five years.
The skills needed for finance professionals to deal with change
In order to deal with the imminent changes, finance professionals need to equip themselves with the key skills of effective communication, better use of business analytics, knowledge of the relevant taxation structure and strong leadership.
Around 86% of survey respondents agreed that they should attend short courses on business, Chinese language and culture.
Following the increase in Chinese investments in Pakistan, professionals in accountancy can explore providing a one-stop-shop solution to investors, from registration of a company to accountancy and tax advisory services.
Over 54% of respondents agreed that the board of directors will be the appropriate forum for discussing and deciding upon the opportunities that CPEC will bring, while 32% agreed that organisations’ risk management committees should be engaged in evaluating such opportunities.
Around 54% of respondents either agreed or strongly agreed that there is a need for risk-management mechanisms in organisations for reviewing and assessing the challenges and risks that will arise from CPEC-related business changes. Not everyone had firm opinions on this, with 34.2% remaining neutral.
Only 26% of respondents agreed that their organisations are taking steps to address the environmental issues that will arise from the impact of business growth due to CPEC, while around 50% remained neutral on the key question about the steps that their entities will initiate to protect the environment from these changes.
The key strengths cited by the business and finance professionals include availability of human resource in the country, the potential for tourism, the quality of infrastructure in the form of roads, etc. Despite the availability of human resource, however, one common weakness cited was a lack of skills, so there is a need for adequate capacity building and increasing the literacy rate, enabling Pakistan’s people to benefit from the CPEC developments. Lack of awareness about CPEC was also cited as one of the country’s key weaknesses: more workshops, seminars and publications are required to educate people to equip themselves for the future changes. Possible failure to maintain law and order is one of the key threats cited, along with the mismanagement of resources and governance-related issues, while the opportunities commonly cited include the generation of employment opportunities, increased trade and improvements in infrastructure.
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