The Impact of Cpec on Economy of Pakistan Final

METHOD OF BUSINESS RESEARCH

JINNAH UNIVERSITY FOR WOMEN

THE IMPACT OF CPEC

ON ECONOMY OF

PAKISTAN

Submitted to: Miss Quratulain

Submission Date

BBA 3-B

Researchers:

Farkhunda Sultan

Madiha Sultan

Masooma Batool

Sara Mashkoor

Shahneela Rehman

Shumaila Hussain

CONTENTS

SCOPE OF THE STUDY...9

OBJECTIVES OF THE STUDY...9

THE RESEARCH QUESTION...10

METHODOLOGY... 11 SAMPLING... 11 SUBJECT... 11 SAMPLE SIZE... 11 TARGET POPULATION... 11 STUDY SAMPLE... 12 SOURCE POPULATION... 12 RESEARCH TYPE... 12

VARIABLES OF OUR RESEARCH...13

DEPENDENT VARIABLES...13 INDEPENDENT VARIABLE...13 MEDIATING VARIABLES... 13 MODERATING VARIABLES...13 SHAPES OF VARIABLE... 15 CORRELATION RESEARCH...15 HYPOTHESIS... 17 QUESTIONNAIRE... 17 QUESTIONNAIRE ANALYSIS...21 RECOMMENDATIONS...22

CONCLUSION... 22

INTRODUCTION

Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-held territory. Corridors play a very important role by shortening the distances between countries and destinations as well as plays a vital role in the emerging and extending trend of globalization.

Pak-china economic corridor is one of the greatest projects which have tremendous importance for a developing country like Pakistan. It will help to strengthen the relationship between Pakistan and china. The project is of great importance not only for Pakistan and china but also for other countries of central Asia. CPEC is the greatest example of bilateral relationship between two countries and it will promote mutual development of China and Pakistan by enhancing mutual exchanges and cooperation in transport, energy, marine sector etc. the project has the potential to enhance the strategic importance of Pakistan in the region and will help to bring prosperity to the region.

Pakistan will become an economic hub in south and central Asia i.e. an axis of regional trade. It will contribute in the economic development by providing job opportunities for locals, develop infrastructure, and provide power and energy to energy-starved. CPEC will help the country to start its journey towards stability. The project has four main areas of collaboration between Pak-china. I.e. infrastructure, transportation, energy, and industrial cooperation. The project is not only important for Pakistan but also has great importance for china and the other neighboring land lock countries in the region. The corridor will reduce trade route of china from 12000Km via sea, to 2000Km via land (i.e. from Kashgar-Gwadar).

Gwadar Port is one of the most important deep sea ports in the world. It is located near the straits of Hormuz and can give China direct access to Arabian Sea. The Gwadar Port, will be one of the most important ports in the Arabian Sea after the completion of CPEC project because it will gain the importance as Pakistan’s economic center. In order to understand the impact of the Pak-china economic corridor on the economy of Pakistan, we need to know about the importance of this project as well as the role of corridors for boosting up the economy of a country. There are many people in Pakistan who are still taking this mega project as unnecessary or less progressive project for the country. To develop the level of understanding of common people we need to describe the importance of Pak-china

corridor for Pakistan, the background of the topic and the initial understanding of corridors and their roles in boosting up the economy.

China-Pakistan economic corridor (CPEC) is a mega project of USD 45+ billion and the greatest example of bilateral relationship between two countries. The project is an extension of Silk Road project which is considering as the revival of the legendary Silk Road; one of the oldest known trade route in the world. It is about 3000 Kilometers long, consisting of highways, railways and pipelines that will connect China’s Xinjiang province to rest of the world through Pakistan’s Gwadar port. A new airport, special tax-free economic zones, energy power plants and a dry port in Kashgar is also included in the project.

The CPEC project is being viewed as very beneficial not only for the states involved but also for the region as well. Regional connectivity and economic development are two major aspects of the project. Furthermore, the land-locked Central Asian countries and Afghanistan will get short and easy access towards the warm-watered Indian maritime under the implementation of CPEC.

China can also counter the US dominance in the region through the accomplishment of CPEC. China can play a significant role in the Asian region in terms of economic uplift and regional stability being emerging as an economic giant and future super power. China will also get the chance to develop its North-western province Xinjiang, which is an under developed area.

BACKGROUND

Pakistan shares a 1,200 kilometers long coast line with the Arabian Sea - a mid-sea which joins the strategic oil line of Persian Gulf with the Indian Ocean. On it lie the Karachi Port which is the hub of Pakistan's entire economic activities as 98 per cent of the entire foreign trade is conducted through this port. Port Qasim, It was constructed in the late 1970s, was developed close to the Pakistan Steel Mills complex near the Indus River delta. Port Qasim is Pakistan's second busiest port, handling about 35% of the nation's cargo (17 million tons per annum). Owing to the growing needs of the country, there was a need to develop other smaller coastal ports into major cargo handling ports. Beside Karachi, Pasni, Jiwani, Gadani, Ormara and Gwadar are other ports which are being developed into world class ship handling centers. Of these Gwadar is the latest development, which is almost completed and recently in December 2008, it has started handling shipping operations with the arrival of three urea laded ships.

Gwadar is on the Arabian Sea coast in Baluchistan province and some 72 kilometers from the Iranian border. It is situated about 400km from the Strait of Hormuz, a major conduit for global oil supplies. More than 13 million bbl/d of oil pass through the Strait. It is strategically located between three increasingly important regions:

the oil-rich Middle East, heavily populated South Asia and the economically emerging and resource-laden region of Central Asia. The present town of Gwadar, Pakistan, lies on the Arabian Sea coast about 30 miles (48 km) to the east of Gwadar Bay.

Pakistan identified Gwadar as a port site in 1964. However, it was only in 2001 that significant steps were taken with the help of Chinese assistance in the construction and development of the deep-sea port. The total cost of the project is estimated at US$1.16 billion, of which China has contributed about $198 million for the first phase for construction of three multi-purpose ship berths. China has also invested another $200 million toward building a highway connecting Gwadar port with Karachi.

Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-held territory. Corridors plays a very important role by shortening the distances between countries and destinations as well as plays a vital role in the emerging and extending trend of globalization. The CPEC is a comprehensive development program that entails the linking of Gwadar Port to China’s northwestern region of Xinjiang through highways, railways, oil and gas pipelines, and an optical fiber link. Major physical infrastructure to be built includes 2,700-kilometre highway stretching from Kashgar to Gwadar through Khunjrab, railways links for freight trains between Gwadar and Khunjrab linking to China and having possible regional connectivity with Afghanistan, Iran and India, and the Karachi-Lahore motorway. Besides physical links connecting Pakistan and China, the project also envisages establishing several economic zones along the corridor. Also, an Energy Planning Working Group of the CPEC has been established that will undertake fast-track implementation of power projects related to the CPEC. Those projects of 21,690 MW power productions will be undertaken with the assistance of China under the CPEC plan (Pakistan Today, 2014).

The corridor will connect Gwadar Port in Baluchistan (Pakistan) to Kashgar in north-western China, which will make Gwadar not only fully operational but also a significant deep sea port in the region. The project will also undertake the revival and extension of the Karakorum Highway that links Xinjiang with Pakistan's northern region Gilgit–Baltistan and Khyber Pakhtunkhwa.

Pak-china economic corridor is an example of bilateral trade between the two countries. China and Pakistan have developed strong bilateral trade and economic ties and cooperation over the years. China has gradually emerged as Pakistan’s major trading partner both in terms of exports and imports. Bilateral trade and commercial links between the two countries were established in January 1963. Free

Trade Agreement (FTA) between the two countries – signed on November 24, 2006 and implemented from July 1, 2007. Opened for operations in 2007, the control of Gwadar Port was transferred to China’s state-owned China Overseas Ports Holding in February 2013. Since then, Gwadar is undergoing a major expansion to turn it into a full-fledged, deep-water commercial port (South China Morning Post, 2014). It will serve as a primary gateway for trade between China and the Middle East and Africa. The corridor is expected to cut the 12,000-kilometre route that Middle East oil supplies must now take to reach Chinese ports (Ibid). Besides meeting China’s needs in energy and developing its far west region and upgrading Pakistan’s economy, the CPEC is expected to benefit the people of countries in South Asia, contributing towards maintaining regional stability as well as economic integration (China Daily, 2013).

LITERATURE REVIEW

China and Pakistan privilege to have an “all-weather” friendship. Their geographical nearness enhances geo-economics worth to their overall relationship. To enhance the benefits of their common border, the two sides in 1982 accomplished the legendary Karakorum Highway (KKH), linking China’s Kashgar to Pakistan’s Islamabad, through the Khunjerab Pass. Throughout the 2000s, the highway was stretched and modernized to make it functioning for all kinds of traffic, year round. An internal network of roads connects KKH with Pakistan’s Gwadar and Karachi ports in the south of the country (Ghulam, 2015)

In addition, the precious stone in the crown for China is the development of Gwadar port and Gwadar region (Saqib and Qi, 2014), as Gawadar port is a vital part of CPEC which would provide Beijing a firm and trustworthy long-term foothold in the Indian Ocean and adjacent to the Persian Gulf, efficiently making it a two-ocean power. The CPEC will behave as a channel for the novel Maritime Silk Route that imagines connecting three billion people in Asia, Africa and Europe. A leading project of the one Belt and one Road initiative as well, the CPEC aims to revive the earliest Silk Road with an emphasis on infrastructure, and establishes the strategic structure of bilateral cooperation. (Saqib and Qi, 2014).

ECONOMIC

Pakistan and China have long-established diplomatic and military ties and are now entering an epoch of developing an economic relationship with the China-Pakistan Economic Corridor (CPEC).

The financing and the operation of the Gwadar Port is a clear indication of how necessary it is to integrate Pakistan and China economically. Increasing economic integration will help fulfill the national interests of both countries. Chinese Prime Minister Li Keqiang stated, “We hope to create a giant economic corridor that would not only enhance China’s strategic significance but would also help in restoring peace and stability to Asia.”

In need of an economic revival, Pakistan (including the province ofBalochistan) is going to be moving towards a stronger economy. Every emerging or growing country faces challenges when it is in the transition phase of economic development.

Every emerging or growing country faces challenges when it is in the transition phase of economic development. China and Pakistan have the opportunity to create connections, which if worked as planned and without any disruptions, will strengthen the Asian economy as a whole.

Today, Pakistani–Chinese diplomatic engagement follows a pattern that has been called a “subtle partnership.” It does “the minimum necessary to preserve Pakistani security from a distance, but it has sought to avoid all overt entanglements” in Islamabad’s challenges to Indian primacy in South Asia. Closer economic relations between China and Pakistan risk irking India. (Arooj Naveed, 2015)

While China has been important to the world economy for decades, the country is now wielding its financial heft with the confidence and purpose of a global superpower. With the center of financial gravity shifting, China is aggressively asserting its economic clout to win diplomatic allies, invest its vast wealth, promote its currency and secure much-needed natural resources. (Krepon, 2015)

South Asia is one of the least economically integrated regions in the world – Sub-Saharan Africa, the Middle East, and North Africa all have higher intra-regional trade. Intra-regional trade is only 3-5% of the total trade of the region, representing just over 1% of regional GDP, while this percentage is 7% in East Asia. India’s trade with its neighbors is less than 3% of its total trade. These challenges have an immense impact on South Asia’s economies. However, China, with the second largest economy in the world, wants to use its economic influence in the region.. The China-Pakistan Economic Corridor (CPEC) is one of the key components of China’s plan. ( Zainab Ahmed,2015)

India’s opposition to CPEC is justified on the grounds of breaching its strategic autonomy as it will pass through the troubles regions of kashmir. I wonder how Pakistan has been misused by US and now China. Both have made commitments of Billions of dollars in aid to resurrect the fragile Pakistan economy. Pakistan has regularly approached IMF for regular bail-outs and this reflects how badly its economy is managed. Now, with the coming of China, Pakistan must investigate Chinese invasion in Africa too. No doubt, the commitments Chinese have made are difficult to achieve, rather will they provide any job to Pakistan locals is doubtful. ( Samar Tyagi, 2015)

Pakistan’s economy is meager not owing to its less resources but because of corruption at the top echelon of the country including government and military officials. Still if these corrupt officials keep black money at home, its economy will grow. The CPEC is going to give Pakistan’s economy an unconditional boost. Its geographical location gives Pakistan an edge just to take annual rent of the port and enjoy the life. As compare to this Indian economy is more in bad shape as compare to Pakistan because Indian economic policy ignores 40% of the population while making any national economic policy that is increasing poverty in India at an alarming level. ( Rana Ejaz Ahmad, 2015)

All countries in the world have to seek their interests as top priority. Pakistan’s interests can be materialized in true sense only if all institutions and political players in the country agree on “Charter of Economy” as to receive transit money from China will be the minimum benefit. Where to establish Economic zones, what to export, how to Train manpower to meet the needs of relevant industries needs a lot of brain storming at our End in Pakistan. (Muhammad Usman Awan,2015).

SECURITY

In CPEC Gawadar port playing a vital role in establishing this phenomenon because the financing and the operation of the Gwadar Port is a clear indication of how necessary it is to integrate Pakistan and China economically. Increasing economic integration will help fulfill the national interests of both countries. (Arooj Naveed,

2015) conversely, After 9/11, the emerging security alignment and changing

parameters in the geo-strategic balance in the region have greatly upset Pakistan’s ambition of obtaining the “strategic depth” in Afghanistan and Central Asia. However Gwadar Port provides both Pakistan and China to strengthen its security vis-à-vis India. As it said that „the security of Pakistan is adequately established by developing relations with China to counter India’s hegemonic aspirations in the region. Similarly, the security of Pakistan, Iran and Afghanistan is interlinked and is indivisible. Pakistan has always tried to project itself as the only country in the region that can compete with India. In addition Gwadar port has a great strategic advantage for Pakistan. It provides Pakistan with strategic depth vis-à-vis India in the Arabian Sea. On the other hand a strong Indian navy and its presence in the Arabian Sea pose threat to Pakistan’s security. Gwadar port will also provide a strong base for Chinese ships and submarines. Since Gwadar Port can fulfill its political, security and commercial objectives vis-à-vis India, China has spent a huge amount on its construction. (Khan, Z. A.2013) China and Pakistan must guard against hegemony and unilateralism, and safeguard their own sovereignty and security interests. They must learn the lesson of turbulences from West Asia and North Africa, firmly safeguard their domestic security and stability, steadily promote their reform, and oppose the interference of foreign forces in their internal affairs.(

Khan, A. U. 2014).

TRADE ROUTE

China has steadily appeared as Pakistan’s largest trading partner equally in terms of exports and imports. Mutual trade and commercial links between the two nations were established since January 1963 when both nations engaged the first bilateral long-term trade agreement (Ministry of Finance, 2014) Two countries have frequently exchanged high-level visits ensuing in a variety of agreements and investments in both nations at government level as well as private bodies (Muhammad and Qi, 2015)3. Pakistan and China signed a bilateral Free Trade Agreement (FTA) in 2006 which came into effect in 2007. The agreement was separated in two parts with Phase I ending in December of 2012 and negotiations for Phase II beginning in July of 2013. The agreement targeted bilateral trade of 20 billion dollars between Pakistan and China at the end of Phase II. Total trade of Pakistan and China under FTA rapidly increased from US$ 3.5 in 2006 to US$ 14.3 billion in 2013.China was second major importing partner of Pakistan with share of 16.17% of Pakistan’s total imports in 2013 (Muhammad and Qi, 2015).

The China-Pakistan Economic Corridor (CPEC) is expected to further strengthen trade and economic cooperation between the two countries. Chinese Premier Li Keqiang emphasized the construction of the CPEC during his May 2013 visit1 to Pakistan (Tiezzi, 2014)2. CPEC purpose to connect Kashgar in China’s Xinjiang Uygur Autonomous Region with the southwestern Pakistani port of Gwadar (GOP MOFA 2013)3. The CPEC will behave as a channel for the novel Maritime Silk Route that imagines connecting three billion people in Asia, Africa and Europe. A leading project of the one Belt and one Road initiative as well, the CPEC aims to revive the earliest Silk Road with an emphasis on infrastructure, and establishes the strategic structure of bilateral cooperation.

Corridor is a trade routes or a belt of land linking two other areas or following a road or river. Or it is a narrow tract of land forming a passageway, as one connecting two major cities or one belonging to an inland country and affording an outlet to the sea or a narrow strip of land through foreign-held territory.

A corridor plays a very important role by shortening the distances between countries and destinations as well as plays a vital role in the emerging and extending trend of globalization.

The project is not only important for Pakistan but also has great importance for china and the other neighboring land lock countries in the region. The corridor will reduce trade route of china from 12000Km via sea, to 2000Km via land (i.e. from Kashgar-Gwadar).

This project is an extension of Silk Road project which is considering as the revival of the legendary. The Silk Road is one of the oldest known trade route in the world. It is about 3000 Kilometers long, consisting of highways, railways, oil and gas pipelines, and an optical fiber link that will connect China’sXinjiang province to rest of the world through Pakistan’s Gwadar port.

Pakistan shares a 1,200 kilometers long coast line with the Arabian Sea - a mid-sea which joins the strategic oil line of Persian Gulf with the Indian Ocean.

The corridor will also connect Gwadar Port in Baluchistan (Pakistan) to Kashgar in north-western China, The project will also undertake the revival and extension of the Karakorum Highway that links Xinjiang with Pakistan's northern region Gilgit– Baltistan and Khyber Pakhtunkhwa.

The corridor is expected to cut the 12,000-kilometre route that Middle East oil supplies must now take to reach Chinese ports (Ibid).

GEOSTRATEGIC DYNAMICS

Pakistan could emerge as a hub of commerce and trade in the region with the construction of the CPEC that would entail establishing several economic and industrial zones and physical road and railway links connecting Pakistan and China. As the corridor also anticipates having regional connectivity with India and Afghanistan–although it is still too early to comment whether regional element of the CPEC will become operational or not–it could also enhance regional economic and trade cooperation, that in turn would contribute towards regional peace and stability.

Gwadar holds central place in the utility of the China-Pakistan Economic Corridor because without making the Gwadar Port fully functional, it would be difficult for China to see the anticipated corridor as an energy corridor that appears as one of its main objectives behind the construction of the CPEC. Located near the Strait of Hormuz, which channels about one third of the world's oil trade, Gwadar could play a key role in ensuring China's energy security as it provides a much shorter route than the current 12,900km route from the Persian Gulf through the Strait of Malacca to China's eastern seaboard (Chowdhury, 2014).

However, there is the view that the construction of the CPEC will ‘place Gwadar on the matrix of intense geo-strategic competition’ (CPGS, 2014). It has been said that Gwadar will also put China and Pakistan in a strategically advantageous position along the Arabian Sea compounding already existing Indian concerns that stem from ‘China's involvement in nearby ports such as Hambantota in Sri Lanka, Sittwe in Myanmar and Chittagong in Bangladesh’ (Chowdhury, 2014). One the other hand as India is also energy hungry it looks forwards to developing Iran’s Chabahar Port. In October 2014, Indian Prime Minister Narendra Modi’s cabinet decided to develop Chabahar Port, which many believe is central for India to open up a route to landlocked Afghanistan, where it has developed close security ties and economic interests (Dawn, 2014a), and to have access to energy-rich Central Asian States. While Gwadar is located in Pakistan’s Balochistan province, where a nationalist insurgency is rife, Chabahar is located in the Iranian province of Sistan-Baluchistan where unrest prevails as well mainly due to certain violent Sunni sectarian-nationalist groups operating in the district. If peace and stability is not achieved in Afghanistan after the drawdown of international assistance forces, and countries in the region, mainly India, Pakistan and Iran, engage in proxy wars, it could have some implications for internal security mainly for Pakistan, Afghanistan and Iran that could impact development projects. Pakistan has blamed India in the past for supporting Baloch insurgents from Afghan soil. Similarly, Iran has concerns regarding Jundullah–a sectarian insurgent group based and operating in Iran’s Sistan-Baluchistan province with free cross-border movement into and from Pakistan. But analysts argue that while Pakistan has struggled to achieve security in Balochistan, Iran has the capacity to enforce its writ in Sistan-Baluchistan that suggests Chabahar could become functional earlier than Gwadar, if pursued by India and Iran fervently.

Nonetheless, China has devised a pro-active foreign policy vis-à-vis the Middle Eastern countries by using the United Nations as a platform to negate the ongoing war in the region (CPGS, 2014). As far as Iran is concerned, China wishes to resolve the Iranian nuclear issue through peaceful political settlement. Moreover, when it comes to ties between Pakistan and India, China has played its part (Ibid). At the same time, for China, Pakistan’s geo-strategic position is very crucial as it serves as a window into the Middle East. Meanwhile, it has already expanded its trade, infrastructure and energy links with most of the Central Asian Republicans (Pakistan-China Institute, 2014). But insecurity and instability in Afghanistan are a major source of concern not only for China but also other neighboring countries including Pakistan, India and Iran. China is already the biggest economic investor in Afghanistan with about $7.5 billion investment (Ibid). China has recently enhanced bilateral and trilateral efforts aimed at strengthening regional cooperation and coordination. It hosted the Fourth Ministerial Conference of the Heart of

Asia-Istanbul Process Beijing on October 31, 2014 with a view to promote security and stability in the Afghanistan, in cooperation with its neighbors (Arif, 2014). China has also pushed the matter of Afghanistan’s future after the drawdown withdrawal to the top of the Shanghai Cooperation Organization’s agenda (Pakistan-China Institute, 2014).

While cooperation among all countries in the region, at least in terms of trade and economy, would be an ideal scenario with changing regional dynamics, there is a strong likelihood that persisting bilateral conflicts and an environment of mistrust will keep them polarized and part of alliances where Pakistan would certainly remain closer to China, with emerging regional dynamics having little impact on the construction of the CPEC and functioning of the Gwadar Port. But it still remains to be seen whether or not the CPEC and Gwadar could become instrumental in forging and enhancing regional coordination and cooperation, although they are designed to have regional connectivity with India and Afghanistan.

SCOPE OF THE STUDY

The scope of this study is to develop a common understanding about the importance of the project; Pak-china economic corridor and its impact on the economy of the country and the sub-continent. As well as the need to develop distance shortening routes both corridors and maritime to boost up the economy as well as to develop bilateral and strategic relationship between the countries.

The study focusing on enhancing the factors affecting the project as well as the economy of Pakistan. It elaborates how beneficial the project is, not only for Pakistan but also for china and others neighboring countries, especially the land lock one. Analysis of various researches has been carried out to identify various variables and aspects for understanding and elaborating the accountability and need to increase the volume of maritime trade and short trade routes to link countries, necessitate handling the growing volume of trade through such type of free trade agreement projects. It also enhances the role and importance of Gawadar port as a primary gateway for trade between China and the Middle East and Africa.

OBJECTIVES OF THE STUDY

The main objective of the study is to enhance the importance of Pak-china economic corridor for the economic development of Pakistan and china as well as for the sub-continent. The study aims to provide awareness to common public regarding the role of corridors and land routes to cope up with the challenges of globalization by shortening the trade routes and the importance of this project for Pakistan. Beside this, it also provides information and data to the business sectors of the country as

well as of the globe to identify the business opportunities and investments scope in the project. It covers the main issues related to the security, political influence, and unstable relationship with the neighboring etc. which have a devastating influence on the development, establishment and success of the project.

The specific aims of the study are to:

 The impact of CPEC on the economy of Pakistan and the region.

 The role of corridors in the development of economy and shortening the distances between the destinies.

 Importance of regional connectivity and bilateral strategic relationship.

 The current situation of trade routes i.e. maritime, road routes and road links between Pakistan and china as well as the situations after CPEC will complete.

 To elaborate CPEC as an integral element with the potential to enhance the regional connectivity and trade.

 Role of CPEC aimed at improving Pakistan’s trade and investment relations with China as well as Central Asia.

 The wide range of business opportunities for the nation and the rest of the world.

 Identify the constraints to be overcome in order to achieve full benefits of the project.

 Define the necessary steps needed to take for the development of the projects.

 To enhance Pakistan’s greatest constructive role in regional and international affairs.

 To highlight the challenges face by the two countries in establishing the corridor and to identify important measures needed to adopt to cope up with these challenges.

THE RESEARCH QUESTION

The importance of the mega project CPEC is still not being realized by many, due to lack of coherent and consistent academic work on this project. However there’s a bit and pieces of information do exist but, a coherent and comprehensive work is still required.

In order to provide a comprehensive and coherent piece of information to enhance the importance of this mega and economy boosting project as well as its impact on the economy not only of Pakistan but also of the sub-continent, the paper addressed the research question;

“What will the Impact of Pak-china economic corridor on the economy of Pakistan?”

A comprehensive question integrated by numbers of questions to enhance the impact of CPEC on the economy of the country as well as its importance for the region. The research is followed by the number of evidences, factors, development programs and the expectations associated with CPEC, as well as the reasons for its success or failure. The paper also evaluates the need of such projects for the economic boost in the country. And the role of good bilateral strategic relationship between Pak-china in the economic and infrastructural development of the country. The paper has tried to develop a common understanding regarding corridors and its necessity for the land lock countries as well as to shorten the distances between the two destinations.

The benefits of shortening the distances on trade and economy. Moreover the role Pakistan will play in facilitating these facilities to china as well as other neighboring countries. Besides the benefits Pakistan will receive in return by providing these facilities, which will have a tremendous impact on the country’s economy as well as on the stability of Pakistan and the region.

The paper has addressed the role of Gwadar port as a turning point for the economy of Pakistan as well as for china. The paper will analyze how much the CPEC will boost the economy of the country, what economic benefits can be obtain from selecting Gwadar and the route for CPEC. The role both the countries needed to perform and should perform for the reinforcement of the success of the project in all related fields of the project. Will try to identify the areas where sufficient and effective efforts and policies are lacking, if any. For this account, the paper would make qualitative recommendations to optimize the economic benefits from the project and to reduce the chances of its failure.

As Gawadar port is expected to give a tremendous boost to Pakistan’s accountability in the region by providing it a great strategic value and by providing an opportunity to act as a trade and energy get way for the entire region. Because it is the most shortest and economical trade route for china, central Asia states to reach the rest of the world markets. A huge trade is going to flow through Gawadar therefore it is expected that it will generate a lot of revenues for the country and hence boost up Pakistan’s economy.

On the other hand the paper tried to wipe out a miss conception regarding the one sided benefits for China from CPEC project, by elaborating the project’s scope for Pakistan as well as for china. CPEC is the mega project that will serve all the countries in South Asia, but its objectivity is related to china and Pakistan only, by contributing towards the regional stability as well as the economic integration.

METHODOLOGY

SAMPLING

A sample is subset of population or in other words sample is the small group of people or individual Which represent the whole population.

SUBJECT

Our research topic is “ECONOMIC CORRIDOR”. And take opinion from professional persons about the research. Take different opinion and make the group.

SAMPLE SIZE

In sampling to collect 50 of unit from the population.

TARGET POPULATION

Age: We select the age group between 22 to 40 (onwards)

Domain: Business person, Management, Security forces, journalist, economist, international person.

STUDY SAMPLE

In study sample we get knowledge through “Secondary Data”. In Secondary data we take knowledge from, books, thesis, website etc.

SOURCE POPULATION

o Who do you want to generalize to?

 The Theoretical population

o What population can you get access to?

 The study population

o How can you get access to them?

 The sample frame

o Who is in your study?

RESEARCH TYPE

We conducted Explanatory Research about impact of CPEC in Pakistan economy. The CPEC is a comprehensive development program that entails the linking of Gwadar Port to China’s northwestern region of Xinjiang through highways, railways, oil and gas pipelines, and an optical fiber link. Our Research based on secondary data from which we evaluate the different variables and give more explanation in our Research.

VARIABLES OF OUR RESEARCH

 Relationship with Neighbor countries

MEDIATING VARIABLES



MODERATING VARIABLES

 Terrorism

 Terrorism  Visionary leadership

China-Pak Economic

Corridor

Economy

Administratio

n

Route

_{Relation with}

Neighbor

Countries

Security

Political

Stability

Geographical

Location

SHAPES OF VARIABLE









CORRELATION RESEARCH

Correlation research is looking for variables that seem to interact with each other, so that when you can see one changing, you have an idea of how the other will change. This often entails the researcher using variables that they can't control. In our study of this topic, we have come to know that there are a lot of variables that may directly or indirectly affects the CPEC project. Some major variables are discussed below.

POLITICAL STABILITY

Pakistan needs political stability and continuity of democratic process to ensure economic growth and development and to achieve its huge potential of becoming a regional hub for trade and commerce as political stability is required for the mega project.

SECURITY

The pivotal concern of Pakistan’s national life is security, both internal and external i.e. country’s defense from hostile forces from within and without. Pakistan is facing extensive challenges to its security which have direct linkages to external threats.

Without proper security the CPEC progress will remain questioned as it is the most important project for the betterment of the economy of Pakistan

Central Asia, an emerging region rich in untapped resources, will benefit. Being landlocked is one of the greatest barriers to increasing Central Asia’s exports. Pakistan intends to connect Gwadar Port with Central Asia for trade and energy transportation. Once the way is open to Central Asia for bi-lateral trade, the markets of Europe will also be accessible as it is the benefit of being on ideal location for Pakistan.

ROUTES

The three routes of the economic corridor are set in a way that the western route originating from Gwadar will pass through Turbat, Panjgur, Nag, Basima, Sorab, Qalat, Quetta, Qilla Saifullah and Zhob and reach Dera Ismail Khan before leading to Islamabad.The second (central) route will originate from Gwadar and reach Dera Ismail Khan The third route will include Gwadar, Basima, Khuzdar, Sukkur, Rahimyar Khan, Bahawalpur, Multan and Lahore/Faisalabad and then reach Islamabad. The three trade routes that shall stretch from the Himalaya Mountains to the Arabian Sea are actually inter-connected these highways have inter-linked transportation and trade encouraging small towns and cities to develop along the routes and for Pakistan such a project is a jewel in the crown. In terms of trade route, China mainly relies on the shipping route that passes through the Strait of Malacca and it takes some 45 days to reach Europe via the Middle East. When the CPEC is completed, it would take approximately 10 days for Chinese shipments to reach their destination, as the Kashgar-Gwadar route will play a pivotal role in reducing the staggering amount of time and distance. Not only this, the reliance on the Malacca route would be significantly reduced.

ADMINISTRATION

Nepotism, weak judicial mechanism and military leadership involvement in the political process is causing weak administrative level for our country which may cause effects on the development of the CPEC.

CONCLUSION

The above described factors are the most important variables for the betterment of CPEC as these are independent variables that affect the Economy & Trade in the state. If proper steps for these variables would not be taken than the economy may suffers and causes the declining state of Trade which is being forecasted to be getting on its peak after the establishment of CPEC.

For get rid of these issues we need to control the terrorism level in Pakistan as it is creating hurdles in the accomplishment of Economy setup goals & proper visionary

leadership should be provided for the enhancement of the internal & external environment of the CPEC.

HYPOTHESIS

 Pakistan needs political stability and continuity of democratic process to ensure economic growth and trade.

 There is positive correlation between Security and development of economy and trade sector.

 Routes have great impact on CPEC as china will receive their shipment in 10 days that will improve their and Pakistan’s Economy.

 Strong administration will give boost Pakistan Economy as well as manage operation of CPEC.

QUESTIONNAIRE

Designation: ……… AGE: ………

GENDER: 1 ( ) Male 2 ( ) Female………..

Q#1: Are you aware of the objectives of CPEC?

 Yes

 No

Q#2: Are you satisfied with the objectives of the project?

 Yes

 No

Q#3: Do you believe that Pakistan really needs such type of mega projects?

 Yes

 No

Q#4: Do you agree with the accountability of the mega project for Pakistan to hold an economic command over the trade from central Asia to Europe?

 Yes

 No

Q#5: Are you satisfy with the role and strategies adopted by the forces of Pakistan to maintain peace in Baluchistan?

 No

Q#6: Are you in the favor of such mega projects in Pakistan with the collaboration of other countries like china?

 Yes

 No

Q#7: Do you satisfy with the areas selected to be cover in CPEC and their importance for the development of the country?

 Yes

 No

Q#8: Do you know about the land-locked countries?

 Yes

 No

Q#9: will CPEC help to boost the economy of Pakistan as well as the sub-continent?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#10: The governments of Pak-china are conducting bold step for the accomplishment of this mega project?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#11: Gawadar will play the role, expected to play as the gateway to the economic zone?  Strongly Agree  Agree  Neutral  Disagree  Strongly Disagree

Q#12: Do you believe that security is a big constraint in the success of CPEC?

 Strongly Agree

 Neutral

 Disagree

 Strongly Disagree

Q#13: Do you agree that the route selected for the CPEC is fruitful and safe?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#14: CPEC will strengthen the relationship between Pakistan and china?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#15: CPEC is the project that will benefit only china?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#16: Gawadar will be a turning point for the economy of Pakistan?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#17: Pakistan will become an economic hub for the region once the CPEC starts its operations?  Strongly Agree  Agree  Neutral  Disagree  Strongly Disagree

Q#18: CPEC will help to reduce U.S. dominancy in the sub-continent?

 Strongly Agree

 Neutral

 Disagree

 Strongly Disagree

Q#19: do you agree with the importance of friendly relationship with Iran and Afghanistan for the success of CPEC?

 Strongly Agree

 Agree

 Neutral

 Disagree

 Strongly Disagree

Q#20: are you satisfied with policies designed by the two governments for the establishment as well as for the development of the project?

 Very Satisfied

 Somewhat Satisfied

 Neither Satisfied Nor dissatisfied

 Somewhat dissatisfied

 Dissatisfied

Q#21: are you satisfy with the role and strategies adopted by the forces of Pakistan to maintain peace in Baluchistan?

 Very Satisfied

 Somewhat Satisfied

 Neither Satisfied Nor dissatisfied

 Somewhat dissatisfied

 Dissatisfied

Q#22: CPEC will bring to Pakistan; a) Stability

b) Number of business opportunities c) Economic boost

d) Increment in employment e) All of them

f) Any other_______________________________.

Q#23: CPEC will help to develop in Pakistan; a) Country’s Infrastructure

b) Reduction of energy & power starvation c) Both

d) Any other_______________________________.

QUESTIONNAIRE ANALYSIS

On the basis of research question we interpret the questionnaire after getting responses from respondents, out of 50 unit sample 48 respondents responded the questionnaire. The 48 respondent includes people from different sector i.e. business, security, traffic, IT officers etc. All respondents helped us to interpret the result of our questionnaire. According to the objectives of our research we have to enhance the importance of China-Pak corridor in the economy of Pakistan and the sub-continent. Following are the points that we have derived from the result of questionnaire.

 46 respondents said that they are aware about the objectives of CPEC & 44 are satisfied with the objectives.

 43 respondents understands the need of CPEC in the Sub-continent, are satisfied with the strategies adopted by the forces of Pakistan & are in favor of the mega projects in Pakistan with collaboration of other countries.

 43 respondents are Agreed that CPEC will boost up the economy of Pakistan, they are agreed that both countries are taking bold step on the accomplishment of the project & respondent also agreed that Gawadar port will be a gateway to the economic zone of the sub-continent and also a turning point for the economy of Pakistan.

 39 respondents agreed that Pakistan will become an economic hub for the region and it will also decrease the U.S. dominancy.

 38 respondents accepted that CPEC will bring the stability, number of business opportunities, economic Boost & increment in employment.

Hence, our research question got answered after the interpretation of the Questionnaire, CPEC will be fruit full and important for the economy of Pakistan. According to our sample unit we have proved that CPEC will have the great impact on the economy of Pakistan because after its accomplishment there will be decrease in un-employment, Pakistan will become an economic hub for the region, Gawadar port will be the most integral part for the CPEC as Pakistan is providing a way or route to the land-locked Countries, Balance of payments will be in positive and all the shipment to the china will be handled from Gawadar Port.

RECOMMENDATIONS

Pakistan’s political and economic decline has turned it into a state of failures. Pakistan is suffering from many disasters like; political instability, economic instability, lack of investment, terrorism, extremism, weak educational system, unemployment, security issues etc. all these factors comparatively has made a drastic effect on the development of the country as well as on the country’s economy by leaving Pakistan with a large, Young, and poorly educated population who are unable to perform their roles for the development of the country.

CPEC is one of the positive signs for Pakistan to become a viable state which is emerging as a hope to bring peace and prosperity not in the country but into the region as well. The importance of this project is known to everyone, but the project is can be fruitful only if Pakistan plays the role he needed to play. There are so many factors and variables we have studied in our research which can or are influencing the accountability and worthiness of CPEC for the region.

Following are some of the recommendations:

• If bold steps are taken in the areas we have studied in the research, Pakistan can fully get the benefits of this project. There is a greatest need of transparency in all the fields and domains of the project which are either directly or indirectly related to it.

• A proper check and balance on the performance of every single factor and area of CPEC will help to increase the performance as well as the efficiency of the work force and the team.

• No matter what are the political circumstances in the country, the policies should be designed to prevent any political influence on the project’s prospective and its accomplishment.

• There should be on time payments of budget and rapid investment so that there is no delay in the project processes. The western alignment which has the

potential associated with the development of the operation, but it is possible only if the planning, financial allocations and releases are on time.

• Land lord policies should be adopted to privatize the terminals which can help to increase port’s performance.

• Sufficient and more effective military operation is necessary to end terrorism and to root it out completely.

CONCLUSION

In this research we concluded that CPEC will act as a vital sign for the economy of Pakistan as well as the region. The research has explained that CPEC is not the project only for china but it has a wide impact for the development of Pakistan’s economy as well as its infrastructure.it will serve as a key ingredient to strengthened the bilateral relationship between Pakistan & China and also help to lower the U.S. dominancy in the region, if the Two governments adopt bold & strong decision and policies for the accomplishment of this project so it will help to achieve the goals & objectives of CPEC.