The ADB Pakistan office has lately been touring provincial capitals in the country to seek ideas on how it can support economic corridor development in Pakistan. In today’s column, we briefly suggest five ideas that the ADB can work on to develop their strategic cooperation framework and beyond.
First, the ADB can sponsor pre-feasibility studies to explore the need for developing new cities along the corridor. This can be done by conducting a baseline market demand analysis, followed by (if need be) an analysis of various potential sites/regions across a multivariate criterion including, population, income levels, skill set concentration, education and health status and availability, connectivity and so and so forth.
Second, they can develop an evaluation matrix ala the ease of doing business rankings, but one that incorporates the economic and governance elements that make cities effective industrial and transit nodes along economic corridors worldwide. Accordingly, this should go hand-in-hand with an annual evaluation of those cities along the corridor (like any other annual rankings) and recommendations thereof.
Third idea lies in the space of water. Pakistan’s water woes are no news. While the impact of corridor development on water may be a long-term phenomenon, water supply is a critical element towards the development of CPEC’s western corridor, the potential industrial or transit nodes thereof, and indeed the development of Gwadar itself. The ADB would do well to incorporate water studies in its plans.
Fourth, developing specific plans and feasibilities for (a) agriculture, (b) mining, and (c) logistics industry. Agriculture is one of the six pillars of the CPEC. Yet Pakistan has no idea how to manage its modalities in terms of how will it pan out; whether she should only allow agriculture value chain investments, or contract farming or direct farm land sell offs. Nor does she know how to find a balance against food security risks.
Likewise, mining can be a great new source for exports and for attracting FDI. But public and private sector understanding of that sector – be its financial or legal aspects – was found wanting in the wake of recent mining sector legal episodes. Similar is the need to develop the country’s logistics sector, especially in the context of corridor development. How to formalise and upgrade Pakistan’s trucking; forwarding & customs clearing; and warehouse industries is something that corridor development thinking should comprise of.
Fifth, is to understand the natural value chain prospects across both the east-west and north-south corridors. Considering the ADB is an Asian Development Bank and not Chinese development bank, research for the purpose of developing the east-west corridor ought to fall in ADB’s agenda for the next few years. Whether the political pundits across the many borders pick up on it is another matter, but at least there should be a document ready to bank upon when needed. The window of opportunity in such cases is often too short!
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