Name: Zahid Rafiq, Chairman,Habib Rafiq (Pvt.) Limited, Pakistan

Title: Challenges in Infrastructure ConnectivityUnder the Belt and Road Initiative – Pakistani Perspective

Abstract:

China-Pakistan Economic Corridor (CPEC) is one of the most important and integral component of the great vision of the Chinese leadership put forward in the form of the Belt and Road Initiative. CPEC not only is the significant part of the Belt and Road Initiative but also has been culminated on ground physically in the form of various projects in the energy, power, industry, and infrastructure development sectors. The projects include developing thermal power projects, hydropower projects, renewable energy projects, and power transmission line projects; developing port facilities; constructing new road links; up-gradating existing roads; multiplying industries; up- gradating existing railway system for increasing the passenger and cargo transportation capacity; building rapid rail transit system in large cities, and developing economic zones to create manufacturing hub. The initiation of these mega projects has created enormous opportunities for the private sectors of both Pakistan and China. Under the CPEC, Chinese government has a strong intention to arrange an investment of about $45 billion within a period of five years. The magnitude of the proposed investment in such a short period has no parallel example in the past and is expected to change the economic outlook of Pakistan. Both the government of China and the government of Pakistan are keen and determined to ensure success of all the CPEC projects. Major portion of this investment is to be made in the development of power sector, in which Pakistan desperately needs the support to pull the country out of the severe shortage of electric power and put the country on the path of rapid economic growth. Major chunk of remaining financial resources are meant for developing the infrastructure for enhancing the connectivity between China and rest of the world through Pakistan. The direct investment ensured by the Chinese government has created environment for indirect investment opportunities in the allied fields of engineering services, construction industry, production of construction materials, and manufacturing of engineering products. This paper highlights the future opportunities in the engineering, construction, and manufacturing sectors along with the identification of existing and future challenges faced for harnessing these opportunities. The business opportunities are open for the public as well as for the private sectors based on the magnitude and appetite for investment. Very attractive returns are ensured for investment in the hydropower sector. In addition, the availability of natural resources, relatively inexpensive labor force, and favorable tax regimes offered by the government of Pakistan creates an excellent environment for the business community to establish new markets and expand existing businesses. The challenges include issues related to physical constraints of financial and human resources, trade balance, social interaction between the Chinese and Pakistani counterparts, environmental aspects connected with rapid growth and international view toward CEPAC. The benefits are expected to emerge from the implementation of the Belt and Road Initiative as well as Pakistan's clearly outweighing the challenges and issues related to the framework.

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