China - Pakistan Economic Corridor - CPEC
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Brigadier
Impact of Global Value Chains on Pakistan: An analysis
Picking up from the export-competitiveness thread published yesterday, the second theme that repeatedly comes up – besides import tariff liberalisation – in stakeholder discussions is diversification of exports. It’s a difficult thing to achieve, however. For one, Pakistan cannot be expected to graduate from exporting semi-processed raw materials to sophisticated components and machinery. And second, market access in advanced countries, already saturated, doesn’t come easy.
If going it alone is difficult, why not partner with others? In that context, Pakistan can diversify its exports by linking up with global value chains (GVCs). GVCs signify finished products that are designed, processed, assembled and marketed in different countries. As per WTO, over two-thirds of global trade takes place through simple and complex GVCs. While North America, Western Europe and East Asia form three inter-connected GVC hubs, South Asia and Africa are largely absent from the GVC map.
Global exports are about value addition across a spectrum that starts from research and design, moves into the middle stages of component manufacturing and assembly, and ends down the line at marketing and after-sales services. The middle stage – component manufacturing and assembly – is what developing countries like Pakistan have a reasonable shot at, with the beginning and end stages usually handled by advanced countries where high-skilled labor is competitive and end-user demand is lucrative.
To become GVC-competitive, tariff liberalisation, though necessary, won’t cut it alone; the whole trade governance regime needs a fix. It’s an ambitious agenda. For a GVC to work in Pakistan, efficiency is needed in procedures and logistics to a point where intermediate goods and components can smoothly enter and exit the country after necessary processing within.
Besides, reforms are needed to bring down non-tariff trade costs – identified by the WTO as major impediments to a developing country becoming part of GVC – of both monetary nature (e.g. freight, insurance and trade-related fees) and non-monetary nature (e.g. customs clearance, contract enforcement, and IPR protection).
All that may sound like a pipedream, especially considering that Pakistan is situated in one of the least integrated regions economically. But there is an opportunity, thanks to the China Pakistan Economic Corridor (CPEC), which can potentially catalyze regional economic cooperation in the future. CPEC, the great North-South corridor, can arguably benefit Pakistan by branching out East and West, opening up economic opportunities on the way.
China, which has mastered the art of economic deal-making despite conflicts with some of its neighbours, would like India to be a part of the massive Belt and Road Initiative (BRI) to really make the most of its connectivity investments. Given the warming of Indo-China ties lately and the growing US belligerence towards even its allies, India may want to hedge its bets by dropping wholesale opposition to BRI some point after Modi’s re-election next year. Pakistan has already signaled openness to India coming on board.
Pakistan has to raise its competitiveness in making intermediate goods by becoming part of the regional-value-chain of textile apparels, auto parts and electronics assembly spearheaded by China. The proposed SEZs under CPEC can be instrumental in that regard, ensuring speed and efficiency. But it will still pay to reform tariffs as well as trade governance across the board so that local small-and-medium-sized domestic suppliers who are not part of SEZs can also be a part of the value-addition equation. It will be interesting to see where major political parties stand on GVCs in their upcoming election manifestos.
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Brigadier
In 2007, Pakistan was labelled as the most dangerous country in the world by the western media.
Today, because of the China-Pakistan Economic Corridor (CPEC), Pakistan has managed to attract $2.2 billion in Foreign Direct Investment (FDI) with China being the top most contributor. CPEC has also managed to create a favourable environment in Pakistan for FDI with countries like the United Kingdom (UK) and Malaysia making significant contributions.
Although the FDI is still not enough to cover the existing fiscal deficits, it is predicted that the FDI is going to increase in the future which will cover these deficits.
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Brigadier
to start Service to multiple countries.....
Federal Minister for Maritime Affairs, Mir Hasil Khan Bizenjo said that Pakistan intends to start Ferry Service to various neighboring and middle eastern countries.
He said that the draft Ferry Policy would be presented in the next Federal Cabinet meeting for approval.
The minister said the draft policy has given a wide range of concessions, with a tax holiday up to 2040. Under the policy, there would be no duty and taxes on ferry service as well as on purchase of a ship for introducing the service in the country.
Initially, ferries will be launched from port to , and and eventually the routes would be enhanced to facilitate people for getting alternative sources of entertainment.
In order to promote and encourage this new service in the country, the Ministry for Maritime Affairs has also suggested that there be no port charges for 4-5 years as well as allowing prospective investors to launch both ferry and dining cruise services.
Mr Bizenjo said that during the Musharraf era, a ferry service was introduced which badly flopped because there were no rules and regulations to run a completely new trade in the country.
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Brigadier
Road networks expanding, Highway to be connected to Free Zone...
Construction of East-Bay Expressway, connecting Mekran Coastal Highway (N-20) with Free Trade Zone of Gwadar Port, is in full swing to reap maximum fruits of the game-changer China Pakistan Economic Corridor () project.
The 19-kilometer expressway, being constructed at a cost of Rs1,450 million, is scheduled to be completed by this year, official sources told APP. The government has released an amount of Rs180 million for the construction of East-Bay Expressway during the fiscal year 2017-18.
At present, Gwadar deep sea port has the only transit source of a narrow 16 feet wide thoroughfare of Gwadar town at the West-Bay.
The trawlers and trucks loaded with imported shipments pass through this strip causing disruption of normal traffic as they have no other suitable source.
The port does not have a dedicated wide highway to cater the transporting requirements of the post. The port operation, even with the available three multi-purpose berths, demands construction of the planned East-Bay expressway.
The 6-lane expressway along with a provision of 30 meters wide railway corridor would not only connect the port with the rest of the region rather provide quick, smooth and safe transport route.
The main purpose of the project is linking Gwadar Port with the main artery of national highway network and smooth logistic transportation of import, export and transit goods. The project would be executed under the supervision of the Ministry of Maritime Affair.
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Brigadier
1410 MW Tarbela 4th Extension HydroPower Project....
The construction work on 1410 MW Tarbela 4th extension hydropower project is in full swing at Tarbela dam. The first unit of 470 MW of 4th Extension Power Project of Tarbela was inaugurated on 10th March 2018.
The project is being constructed on tunnel No 4 of Tarbela Dam with three proposed units with an installed capacity of 470 MW each. The second unit of the project is scheduled to be commissioned in June 2018 and the third unit by the end of July 2018.
