China Pakistan Economic Corridor: India urged to change approach

Minister for Planning, Development and Reform Ahsan Iqbal Thursday urged India to review its negative approach towards the China-Pakistan Economic Corridor (CPEC), as it is neither a conspiracy nor a military project but a project for regional connectivity and development.
The minister protested with the World Bank Group (WBG) for not showing Northern Areas (Azad Jammu & Kashmir and Gilgit-Baltistan) in the map of Pakistan in the presence of Indian high commissioner to Pakistan during a launching ceremony of a report tiled "The Web of Transport Corridors in South Asia."
The report was published by the Asian Development Bank, United Kingdom's Department for International Development, Japan International Cooperation Agency and the World Bank.
Lead Economist WBG Martin Melecky was presenting an overview of the report, during which Iqbal noticed that Pakistani map was incomplete and said that Kashmir was not there. Later, the officials assured him and announced that they would revisit the report. The report was also not offloaded on the website till filing of this story. When asked from the WB officials, they said that due to some technical glitch, the report would be offloaded in one to two days.
Iqbal said that South Asia was the least integrated region in the world, and due to least integration the regional countries including India, Bangladesh and Pakistan were ranked among list of least developed countries in terms of social indicators. This needs to be changed in order to have inclusive and sustainable development in the region.
"Pakistan invites all the countries in region to cooperate with one other in trade and commerce for welfare of people of South Asia. Pakistan wants a shared prosperity in the region. Trade barriers and inefficiencies in border management impose huge economic costs and they need to be addressed effectively to materialize wider economic benefits of transport corridors," said the minister, adding that no country in South Asia should feel threats from the CPEC.
"In the presence of Indian high commissioner it is stated with sorrow that world is progressing but we are indulged in conflicts. Next generations would not forgive us," said the minister. He said Pakistan and India had not cordial relations but they should move forward towards development while surpassing conflicts.
He further said that by adopting regional cooperation and connectivity approach, billion of people could harness benefits while investing in health, education and infrastructure development sectors. Future of Asian countries depends on promotion of trade and commerce and connectivity through transport corridors. He called upon India to get benefits from the CPEC rather than pursuing unnecessary criticism.
"Transport corridors help connect the countries and play a pivotal role in economic integration, trade development and regional connectivity across the globe," Iqbal said, adding the regional cooperation was opening new opportunities for growth and progress. He stressed the need for developing more markets to create demand for growth and said it was only possible through enhanced cooperation and connectivity among regions as well as with other markets of the world.
He further said CPEC was a step for regional cooperation and connectivity and it was creating a new supply chain market and shared prosperity across all the parts of the country by enhancing market access of all stakeholders. The minister said other aim of those corridors was to reduce distance among different economies, besides increasing connectivity and opening better return opportunities for socio-economic development.
Iqbal reaffirmed that the CPEC was not only an economic integration project of the region but it would open ways for market access to Central Asian states and through Central Asia to other parts of world. He further noted that transport corridors were a key to develop new markets that would help developing economies climb up the development ladder. "I do not envisage infrastructure development simply as a platform for cars/trucks; instead transport corridors allow economies to materialize spillover effects in land, labor and product markets," he added.
Later, talking to the media persons, he said CPEC was a purely an economic development project that would bring prosperity. Besides the CPEC project, Pakistan was also making progress on other corridors in order to enhance its connectivity through Central Asia Regional Economic Cooperation (CAREC), he added. He said India's reaction towards CPEC was not positive and the country should revisit it.
"The upcoming Khyber Pass Economic Corridor Project is a positive example, where trade facilitation and the development of local economic activities are explicitly integrated in the design of the project," said World Bank Country Director for Pakistan, Patchamuthu Illangovan. He said CPEC was providing a big opportunity for the development of Pakistan, besides it would promote regional cooperation.
With investments in roads, railways and ports, the $60 billion CPEC offered enormous potential for Pakistan to boost its economy, reduce poverty, spread benefits widely and help those likely to be affected by the new trade route, said the report.
Highlighting the salient features of the report, Martin Melecky, lead economist, said there were many corridor proposals but there was a dire need for bridging the gap between investment and financing capacity and stressed the need for adopting the holistic appraisal methodology.
"The largest economic gains from investing in transport corridors may arise from urbanization and job creation around this new infrastructure, rather than from many more vehicles using it," said one of the report's authors, Martin Melecky, who added, "Not all corridor investments are equally successful in creating large economic surpluses that spread fairly throughout society."
The report noted that the many transport corridors proposed across Asia would cost trillions of dollars to implement, far exceeding the financing resources available. Hence, the countries need to prioritize the most promising corridors that will deliver the expected transformative impacts for their economies and people. Engineering designs and geopolitical considerations could be important, but sound economic analysis is a key to designing truly successful corridors, the report argued.
The ability of large-scale transport investments to generate wider economic benefits depends on the population density in the areas they cross. Their capacity to spur structural transformation along the way depends on complementary factors around the transport corridors, such as the skills of the local population or restrictions on local land use. The new transport infrastructure must come with the means for people to take advantage of the improved connectivity right from the start.
The investment in transport corridors is expected to create large economic surpluses that can spread throughout the economy and society and stressed the need for fair and equitable distribution of the investment benefits across the population.
The report aimed at presenting past and recent case studies of corridor initiatives and makes an assessment of corridor investment supported by international development organizations. The report urged for engaging private sector and considering disparities in regional development. It called upon the policymakers to ensure the private sector understanding about the corridor programme, take ownership and ensure that it was not overwhelmed by the risk.
The analysis suggested that so far the engagement of the private sector might have contributed to the development success of corridor projects. The report reviewed the international experience with economic corridors, from the Pacific Ocean Belt in Japan in the 1960s to high-speed train networks in Europe more recently. It also analyzed the impacts of the Golden Quadrilateral Highway System in India and found positive effects, including higher economic activity and better (non-farm) jobs for women. However, air pollution rose in parallel and gains in household consumption were not equally shared across connected districts. Appraisal simulations for the CPEC and the Kolkata-Dhaka corridor suggest that complementary measures are needed to improve local conditions that in turn will create formal jobs and generate tax revenues that can pay for corridor investments.
In the light of international evidence and specific analyses for South Asia, the report advocated for a more comprehensive design of corridor programmes that actively manages tradeoffs and closes potential financing gaps in a sustainable manner.