Another corridor

As China builds economic corridors under Xi Jinping’s Belt and Road Initiative (BRI), development multilaterals have become more active in this area, having long championed it. Pakistan has been getting some attention, with CPEC emerging as the BRI’s flagship project. Donors are interested, too, thanks to Pakistan’s location connecting Central Asian Republics (CARs) with the Arabian Ocean and South Asia.

Pakistan still has years to go before fruits of economic corridor development are picked. A lot of trunk infrastructure has been built under CPEC and other government- and donor-funded connectivity projects.

But economic activities that focus on job-creation and urbanization along the transport routes are largely absent. More imagination and planning needs to go in this area to turn a transit route into an economic corridor. Besides, irritants in transportation and trade facilitation governance also need to be removed.

A project launched by the World Bank earlier this month has attempted to connect the two aspects of transport infrastructure and economic development. The roughly $500-million, six-years-long project – called “Khyber Pass Economic Corridor” (KPEC) – will be funded via a 30-year IDA loan of $460.6 million. KPEC, which will be implemented by the NHA, aims to facilitate trade between Pakistan and Afghanistan via the Khyber Pass, a mountainous area Northwest of Pakistan, close to Afghan border.

As per project documents, trunk infrastructure will receive over 80 percent of project financing. A four-lane, controlled access highway, running 48 kilometers, will be built, called Peshawar-Torkhum Expressway. This new road will divert traffic from the existing, 40-km-long N-5 alignment between Peshawar and Torkhum, helping cut trading time and costs for truckers going back and forth.

In terms of economic development, KPEC plans to build physical infrastructure along the route and undertake trade facilitation measures. Targeted economic activities include development of local roads, building of rest areas, historical and cultural sites. Better physical connectivity and border-crossing can aid Afghans traveling to Pakistan for health and education purposes, helping the local economy further.

KPEC is part of a broader donor plan to improve regional connectivity. Transit through the Khyber Pass is critical for other regional corridors as well. For instance, two corridors (5 and 6-c) under the Asian Development Bank’s (ADB) CAREC program pass through the pass, linking CARs and Western China to the Arabian Sea. Better connectivity along these routes can provide Pakistan with an opportunity to improve its currently-abysmal share in CAR imports.

Pakistan’s geographical location can be tapped for economic activities beyond transit trade. If a transport corridor is used towards industrialization (based on economic and social conditions of the sub-regions along the corridor), it can lead to growth in jobs, new urban centers, and more export avenues. Towards that end, technical assistance from the likes of World Bank and the ADB is welcome.