The development of infrastructure is necessary to attract direct foreign investment. The country is already facing trade deficit and continuous decline in remittances sent by the expatriate Pakistanis, leaving little room to spare enough funds for developmental projects. The government is signing loan agreements with international financial institutions one after another to keep the foreign exchange reserves at certain level. However, the cosmetic steps will bounce back one day if concrete steps are not taken to put the economy on the right track. Many economists have expressed misgivings on the unrevealed clauses of agreements with the Chinese government with regard to much publicized economic corridor programme. They fear that Pakistan will have to return the loan money and it may affect the annual rate of growth in the national income. However, it is not easy to understand the dynamics of the economy at a time when the country is drenched in corruption, political environment is charged and the future of the nation is placed on the shoulders of bureaucracy.
The economy is rising despite all odds and experts point out the potentials of the China-Pakistan Economic Corridor to address infrastructuralissues to some extent as the country spends only two to three percent of its gross domestic product on the development projects. The CPEC is likely to take another decade to complete, but the country is still not ready to do homework to reap the benefits of this mega project.The world financial institutions, including International Monetary Fund and the World Bank, had projected the economic growth over five percent for fiscal year 2018-19.The Chinese investment is not only boosting consumer and investor confidence on the country’s economic situation, but also paving the way for investment from other countries as the United Kingdom and the central Asian states are also weighing options to be part of the corridor.Experts believe the large-scale investment in infrastructure projects will boost construction industry and spur industrial activities, creating more jobsand more investment from the private sector.
It is time the government should concentrate on industries which could push increase in exports which have been on the downward trajectory for the last four years. The government should not put all the eggs on one basket. The Chinese investment is welcome, but it should also look for other opportunities to convert the proposed export processing zones along the CPEC into thriving industrial hubs. It is also necessary to attract local investors to the processing zones who have invested heavily in Bangladesh, Sri Lanka and Dubai markets.
