Challenges and Opportunities of China Pakistan Economic Corridor (CPEC) for Pakistan: A Human Resource Development (HRD) Perspective (1970s to 2018).

Byline: Kashif Rathore, Mukaram Ali Khan and Muhammad Iqbal Chawla


China-Pakistan Economic Corridor (CPEC) is one of the major developmental projects in the history of Pakistan and is named as a "game changer" for socio-economic development of Pakistan. CPEC is part of the even larger "One Belt, One Road" (OBOR) plan of China. It has been estimated that regional economies will go up to at least $2.5 trillion and population of over 4 billion will benefit from this project across more than 60 countries. OBOR intends to connect China with Central Asia, Europe, and Russia through the Persian Gulf and the Indian Ocean1. Other than the aforementioned regions, Pakistan will also be one of the major beneficiaries of the project due to huge investment in various sectors. Pakistan economy is majorly dependent upon agriculture sector, industry sector and services sector with the contribution to GDP by 21.4%, 20.8%, and 53.3% respectively.

All these sectors have been severely hit by the energy crisisin the country resulting in the decreased interest of investors2. In the midst of these crises, CPEC serves as an opportunity for Pakistan to bring investors back and generate economic activity that can result in socio-economic development. CPEC's major share of the proposed investment is in energy sector i.e. $34 billion. Apart from investment in the energy sector, investment in roads, railway-track, fiber optic network, Gawadar development, and other related projects amounts to approximately $12 billion3.Looking at the opportunities linked with CPEC, proposed investment increased from $46 billion to $56 billion earlier, whereas according to recently documented sources, it has further increased from $56 billion to $62 billion4. As per the current economic policy of Pakistan, CPEC is very likely to result in a high number of employment opportunities ranging from 600,000 to 1,000,000 between 2015 and 2030.

In order to cater to the needs associated with these projects and employment opportunities, a very well equipped and skilled workforce is required5. For that matter, a major consideration needs to be paid to issues related to HRD and capacity development. In this context, Human Resource Development is a key area of concern for the Government of Pakistan that if focused and given due attention, can serve as a major breakthrough in availing CPEC related opportunities. At present, a large number ofskilled work-force is being inducted from China due to the lack of appropriate skillset available with Pakistani professionals6. This situation stresses the need for a proper HRD policy in Pakistan.

Moreover, International Labor Organization (ILO) has identified the obligation to inquire HRD related developments on a global level, "to address broader economic and social goals such as to improve good governance systems and human resource capabilities"7. 8HRD policies are required at the national level in order to integrate the anticipated needs and requirements of the countries. Therefore, two dimensions in this regard should be researched upon by researchers:i) how to explore HRD practices at national level which have not been explored yet and ii)how to increase the horizon of HRD related policy issues for the development of the economy. It has been observed that Pakistan has focused more on unskilled labor instead of the development of the skilled workforce9. Moreover, there are a number of examples in the world where even developing economies like Singapore by focusing on human capital have developed themselves even in the absence of natural resources10.

South Asian region is the victim of economic growth not just due to political reasons, but also due to the non-focused policies on HRD initiation policies, therefore, this specific region has remained behind from other economiesin terms of human development11.In light of the above discussion, this research intends to explore the gaps in the implementation of Human Resource Development projects under CPEC and the reasons for not implementing the HRD in context of CPEC. The reason for developing this conceptual paper emerges from the following questions;

i. Over the years, whether Pakistan has the sufficient number of HRD related institutions in place?

ii. Whether there is a sufficient number of skilled workforce available in order to capitalize on the opportunities associated with CPEC as compare to the past?

iii. What is the current structure of HRD in Pakistan?

iv. Do we have an administrative structure in place in the context of CPEC?

v. What are the challenges (if any) for Pakistan in order to develop the pool of skilled workforce?

1.1 Significance

CPEC is regarded as the most important projects for the socio-economic development of Pakistan with economic activity for about62 billion US dollars. This project is crucial for the two key partners i.e. Pakistan and China and is part of the greater transcontinental OBOR project. Its vitality can be judged from the fact that several developed countries including the UK, France, and Russia have shown their keen interest in the projects under CPEC12. The projects planned under CPEC will "serve as engines of economic and job-growth" and will thus require a varied and diverse set of skills and competencies in Pakistan's future labor force13. As far as this study is concerned, it intends to explore the CPEC project through the lens of a need and the gap for an HRD policy.

HR is one of the key resources any organization or economy needs, skilled and trained workforce is always encouraging for foreign investors and according to a Chinese official, Pakistan does not have the required workforce with high-quality skills that are needed with reference to the modern tools and techniques and it is evident from the fact that several employees are being brought in from China to work in Pakistan. If Pakistan had a properly developed strategy that is in line with the goals and projects of Planning Commission including CPEC, this project could have helped Pakistan to curb the menace of unemployment to quite an extent that CPEC is likely to produce around 1 million jobs as mentioned earlier.

Moreover, CPEC is not a short term project as it involves investments until at least the year 2030, therefore, the local stakeholders and policy-makers can capitalize this opportunity and enable the local population to acquire and enhance the skills that can be utilized effectively for this game changer project. Nevertheless, not just CPEC, a national level HRD policy that covers the analysis of current and required workforce and the knowledge, skills, and abilities they require is of great significance. A policy that integrates the HRD with national development goals is of dire significance.

  1. Literature Review

    2.1.Historical context of CPEC under OBOR

    OBOR is taken as one of the key initiatives in the history of China to escalate economic prosperity by increasing access to various un-accessed markets14. This initiative has its deep-rooted history linked with Maritime Silk Route/Road. 15It was "the first official international sea-trading route in Chinese history" (p.1231). From Tang administration to European imperialism, Chinese silk and ceramics navigated this fundamental trade road which linked China with the commonwealths of Southeast Asia and past into India, the Middle East and Europe16. 17"The Maritime Silk Road should be considered with the same historical importance attached to the more celebrated overland Silk Route" (p.1231). This is on the grounds that the trading channel made China the best maritime country on the globe and facilitated the economic success of a few Chinese traditions18. It was argued that China's success as a result of Maritime Silk Road had many geostrategic and political ramifications.

    Moreover, the "Sino-centric world order" is also termed as "tributary system" and it existed in the region until the nineteenth century19. Likewise, Southeast Asia was more of businesslike and clung to this various hierarchal orders, conceding to Chinese leadership with an end objective to access its gigantic markets. For China, the Maritime Silk Route, just as the success and status it delivered, highlight towards a golden era before time of dominion by "Western powers and Japan", which it currently alludes to as the 'time of humiliation'. It is this period of magnificence and Chinese territorial pre-distinction that the Chinese Communist Party is endeavoring to restore through its OBOR activity. Twentieth century seems to be the most critical phase for Silk Route as China has shown keen interest by getting inspired from capitalistic approach and profitability. New world order after soviet collapse had also given an opportunity to further work towards Silk Route in 1989.

    In 1996, Shanghai 5 mechanism was initiated to resolve border issues in favor of Silk Route20. China is trying to rejuvenate the historical perspective through OBOR by using the term "Silk Road". As it did previously, it is on the cards that this economic boom will encourage China's political supremacy and the revival of a "Sino-centric regional order" that will again expect states to concede to China's administration21. It is quite clear that OBOR has a significant historical connection to re-introduce the Maritime Silk Route. However, CPEC is one of the core components of OBOR with respect to China and Pakistan.Recently, Chinese President Xi Jinping proposed the building of the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Also, China released the vision and actions on jointly building the Silk Road Economic Belt and 21st Century Maritime Silk Road in 2015.

    In 2017, Belt and Road Initiative was written into the Constitution of the Communist Party of China showing significance of Silk Route and Belt and Road initiative. Pakistan Prime Minister (PM) along with all Chief Ministers (CMs) attended OBOR summit same year22. Looking at its...

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