Population heterogeneity and the struggle for profit maximization under economic corridors
The establishment of an economic corridor is a holistic strategy that ameliorates and upgrades investments in transport, energy and telecommunications in the region. Economic corridors lay the foundation of industrial growth and development by attracting investment and generating economic activities along the underutilized region.
Such corridors are believed to improve the transportation system and lead to poverty reduction in the long run. They are a source of job creation and cost minimisation. However, a big question mark lies as to whether this is true. In a heterogeneous population, like that of Pakistan, where there is diversity among people in terms of the location, behaviour, skills, expertise, resources, capabilities and interests towards business activities, it might not be the case. This is because the benefits are concentrated in the hands of a certain few, firstly, based on their skillset and expertise and secondly, among those, who are the dominating elites, in control of all the resources. To gain maximum profits from economic corridors, skill development of the majority population is the key. Population polarisation, because of income inequality and unequal distribution of wealth, resources, technical skills and expertise, means that the rich can be involved in the exploitation of economic corridors. The main purpose of the corridors is lost somewhere amid the struggle for profit maximisation.
The famous ongoing economic corridor project in Pakistan, China-Pakistan Economic Corridor (CPEC), is a collection of infrastructure projects, which are currently ongoing in different regions of Pakistan. The CPEC is considered to bring immense profits to both countries. It is the biggest project in the history of Pakistan as well as all over Asia. It promises to bring industrial reforms, which will boost the economic growth of Pakistan three times by the end of 2020.
It is the job of the government to provide technical and vocational training to its citizens so that they can equally compete with the Chinese population
Nature and expertise of people living near and away from this corridor will affect how they can maximise their profits and how they gain benefits from this. For instance, an industrial area, like Faisalabad, may export garments to China and other countries; Gilgit-Baltistan may export dry fruits. North can specialise in its tourism industry. But whether the benefits are shared among the population equally and proportionately can be determined by the concentrated and consistent efforts of the Government of Pakistan as well as the private sector. An argumentative, antagonistic and dilapidated approach within Pakistan is a clear reflection of the non-corporation and the blame game, where the provinces blame the federal government and the government complains about the lack of capacity in the provinces. Meanwhile, the private sector believes it is being ignored and bypassed or a level playing field is not available. All this would end up in diminished benefits to the country. It is a shameful and a pitiful situation that while importers are being encouraged and facilitated, manufacturers are being suppressed. The fact that they have to pay different taxes because of the regressive taxation system of the country makes the cost of doing business too high.
The CPEC will not necessarily bring benefits to the regions through which it passes and is likely to bring more development to already developed regions, instead of poor areas such as those of Balochistan.
It will not bring profit to the indigenous population because of the high level of competition and the struggle for profit maximisation. For example, the already oppressed groups of Balochistan are bound to become minorities as Han-Chinese workers and Punjabi businessmen are likely to settle in the surrounding areas where the corridor is implemented. Gwadar port is a glaring example of this phenomenon.
For Pakistan to derive maximum benefits from CPEC, short-lived policies, quick-fixes and patch-work by the government officials and bureaucrats should be given up now. The majority of the population should be facilitated through comprehensive, well-planned and sustainable policies that have long-term objectives.
Policy reforms and institutional arrangements, which can enable Pakistan to get maximum economic benefits, minimise risks and enhance the welfare for a large segment of the population, despite its heterogeneity, are the crucial needs of the time. Preference should be given to residents for employment. The training and skill up-gradation of Pakistani engineers working on CPEC projects must be the top agenda, along with the transfer of knowledge and project management, which would ultimately lead to the enhancement of our highly skilled manpower inventory. In the long run, this will prove to be a major boom for Pakistan’s economy.
Chinese have all technical and mechanical skills needed for the CPEC, so they will get maximum profits out of it. We need to invest in our people’s skill development through education. Along with the rising interest among policymakers in appraising and prioritising economic corridors, there should also be a burst of academic interest for empirically evaluating the socio-economic and environmental impacts of large infrastructure projects under economic corridors. It is the job of the government to provide technical and vocational training to its citizens so that they can equally compete with the Chinese population and gain equal benefits as the elite and business class of the society. Skill development leads to a higher wage rate and the eventual eradication of poverty. Along with attention to skill enhancement, a strong emphasis of the government should also be on job creation, especially for the marginalised population of the country.
It is the critical need of the time that all stakeholders follow a more concerted, cooperative and effective approach. In my view, the present atmosphere is more self-fulfilling rather than conducive and may have disastrous results.
The western route connecting Gwadar to Karakorum Highway has the potential to open up the backward districts of Balochistan, so it should be given priority. This will eventually integrate the population with the national market for goods and exchange. Educational, health, drinking water, vocational training and credit facilities should be made available to the communities living along the Western Corridor to improve their economic and social conditions. Careful planning should be done so that the local population benefits in employment and other services sectors. Finally, I think it is high time that our government introduces a progressive taxation policy so that the poor are not exploited at the hands of the rich and the real essence of projects like CPEC are met and enjoyed by the majority of the population, not just the ruling elite.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.