“China has a total trade volume of $4,477 billion. If CPEC (China-Pakistan Economic Corridor) is linked with the development of markets along this corridor, and thereby attracts even one percent of China’s trade, a trading volume of about $45 billion annually could be generated by the market networks on the hinterlands of CPEC,” said the study launched by the United Nations Development Programme Pakistan and ministry of planning, development and reforms. Pakistan’s trade with China amounted to more than $15 billion during the last fiscal year of 2016/17 with trade oddly in favor of China.
The report, principally authored by economist Akmal Hussain, said CPEC has the potential of developing many remote areas if government builds ancillary roads for linking remote communities with the main highway, organise the communities in the areas and provide them with skill training, credit, communications and marketing facilities “so that they can produce goods and services required by the vast traffic along the main economic corridor”.
“The government of Pakistan has not effectively counteracted the tendency of the market mechanism to cumulatively increase regional disparities and as a result, these disparities have been continuously increasing and have become a persistent political issue in Pakistan,” the report, titled ‘Inclusive and Sustainable Development: Analytical Basis and Policy Framework’, said.
“… there is a need to make the regional dimension central to the planning exercise. There is a need to identify growth nodes in backward areas and to develop infrastructure in such regions.”
Minister for Planning Ahsan Iqbal said, while launching the report, said Pakistan has accorded the highest priority to goals, which will enable it to join the league of upper-middle-class countries by 2030. “The goals (are) to include zero poverty and hunger, universal access to health services, education, modern energy services, clean water, and sanitation.”
The study also called for an institutional framework to enable small-scale industries in the high value-added sectors such as export-oriented automotive parts, electronics, molds, dyes and software sectors, especially along the CPEC.
“This could lead to a higher and more equitable growth accompanied by higher export growth,” it said. “Training of software experts supported by credit and market access could induce the rapid growth of software companies which would not only enable self-employment for educated youth but also accelerate and change the composition of Pakistan’s exports towards knowledge-intensive products and services.”
The report urged the government to develop an institutionalised mechanism for the large-scale manufacturing sector to outsource the manufacturing of various components and automobile spare parts for which many small-scale units have a potential in terms of basic technical skills but they find it difficult to get orders and thus resort to producing low value-added items for the retail market.
The study advised establishment of small farmer development corporations to provide integrated support services to the small farm sector through land development, drip irrigation, soil testing, provision of seeds and credit, linking value production with the supply chain of international standards.
“A strategy of growth through equity in agriculture would require an improvement in the distribution of productive assets by enabling small farmers to acquire ownership of land on one hand and enabling them to use it efficiently on the other,” it said.
For equitable growth, there is also a need for dedicated credit allocations by the financial institutions to women entrepreneurs in livestock and textile sectors to help mobilize 41 million potential women workforce, it added. The government should also give incentives to businesses and corporations to invest in women-led businesses and set quotas in government contracts for women-owned businesses.
The report further said the constitution makes it mandatory for the provincial governments to financially empower local governments.
“… it is necessary to make laws specifying the local governments as a separate (third) tier of government with its unique set of powers and distinct from the federal and provincial governments,” it added. “In this regard, an Act could be passed in the National Assembly which recognizes the local governments as a third tier of government in Pakistan with political, administrative and financial powers.”
The study said the provincial governments should not have the powers to alter the basic framework of local governments or to centralize any of the core functions assigned to these governments.
“The criterion for the transfer of resources from the provincial governments to the local governments ought to be similar to the one which is used for the transfer of resources from the federal government to the provinces,” it added.
Source: The NEWS