According to a recent study by Asian Development Bank, "Pakistan has the growth potential to become the center for the countries of Asia by following the economic corridor development model. The ADB study, titled "Economic Corridor Development (ECD) in Pakistan: Concept, Framework, and Case Studies," suggested several economic questions by exemplifying the ECD model.
In the preface, ADB Central and West Asia Department Director-General Eugene Zhukov said that Pakistan could not achieve a continuous growth pattern and sustained development. He said Pakistan should become an export-oriented country through policy reforms in the market. To transform Pakistan from import-oriented to export-oriented, it should improve competitiveness to attract foreign and domestic investment from the private sector. Public-private ventures will increase exports. The official further elaborated that ECD-focused policy had been selected and implemented by the Government of Pakistan for growth and development. To become an export-led economy, the country should have private sector development and an effective tax system to transform the economy.
ECD helps economies and inculcates diversity through foreign direct investments by investors of tech giants. ECD can facilitate Pakistan to become a hub for Asian countries by linking the backward regions with highly developed urban centers.
The study said that Pakistan could re-strength the economic centers by providing an effective and efficient transport system. The practical transport system is based on sound infrastructure conditions and the business environment. However, Pakistan lacks the management and governing capacity for ECD, which depicts poor governance. The tax system and its compliance in Pakistan are too complex, which acts as a barrier to the growth and business expansion. Multiple factors limit the growth momentum, like lack of entrepreneurship policy and project management.
The study suggested the various steps which can help Pakistan to overcome economic challenges. Establishment of management and planning agency to control the corridor by ECD model. Robustness to overall policy for effective implementation and regulating the urban development, transport network, business regulation, and taxation system. Provision of skilled labor trained by the institution to meet industry needs. Structuring the new infrastructural network to link the old urban centers with new economic zones. Devise a plan to attract investments from foreigners for funding ECD-related projects. There should be linking of local production houses with the markets which are located closely to CPEC routes.
Successful implementation of ECD is the primary condition in achieving economic goals. CPEC alone could not improve the economy; instead, it would assist by the great policy reforms to tap the full potential of this project.
The ADB report suggested the four steps related to policy reforms for extracting maximum potential out of CPEC.
- Laying out the structural changes to attract foreign private investors.
- Improve the tax system to increase the tax revenue
- Maximize the investment return by improving and utilizing the transport infrastructure.
- Increment the development of planned special economic zones on the CPEC
Source:
https://www.dawn.com/news/1672882/adb-study-stresses-economic-corridor-development-to-transform-pakistans-economy
