SEZ’s: The Kingpin of CPEC

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Government of Pakistan has set the target for completion of all the nine Special Economic Zones (SEZs) identified under CPEC, by 2025. To the five years’ plan (2020-25), the government was to focus only industrial development under CPEC and it was expected that during that period some $40 billion foreign investment would be poured in to the country’s SEZs. Pakistan had recently signed with China on the Framework Agreement on Industrial Cooperation under China Pakistan Economic Corridor (CPEC). The objective of the Framework Agreement on Industrial Cooperation is to attract Foreign Direct Investment (FDI), promote industrialization and development of economic zones, and initiate, plan, execute, and monitor projects, both in the public as well as the private sector. As CPEC entered its second phase which primarily revolves around Special Economic Zones (SEZs) development and industrialization, the need for a comprehensive Framework Agreement became imperative. Pakistan is laborious in two areas, refining the business environment and security of CPEC. The government has already introduced a fast-tracked reform process to improve the business environment in Pakistan. We can observe a new potency on the part of the government to inject efficiency in the industrialization process under the Special Economic Zones (SEZs). Board of Investment (BOI), being the secretariat of industrial cooperation, has expedited efforts to devise innovative or efficient systems to facilitate industrialization. However, to make it successful, the government must have to concentrate on real problems the business community is facing. The most important issues are complicated institutional framework, complex and lengthy procedures, corruption, and political games among the parties. No doubt, the signing of the framework agreement must have significant outcomes and it indicates that it is a top agenda from the Chinese side as a testimony to their interest in CPEC. Therefore, it should be the top priority of the government to overcome the challenges which are negatively impacting CPEC.

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