CPEC unlikely to improve Pakistan investment climate, say experts

Experts assessing the impact of the USD 60 billion China-Pakistan Economic Corridor (CPEC) project in terms of improving the investment climate in Pakistan are by and large skeptical and uncertain about it in the short and the long term.

The CNBC channel quoted Derek Scissors, a resident scholar at the American Enterprise Institute (AEI), where he focuses on the Chinese and Indian economies and on U.S. economic relations with Asia, as saying that "Chinese activity in Pakistan is certainly raising Pakistan's profile, but only in a narrow way."

He maintained that global investors "are less drawn by what Pakistan itself has accomplished and more by what China has done in Pakistan."

Shailesh Kumar, Asia Director at the Eurasia Group, was quoted by CNBC, as saying that he did not think that investors would be comfortable parking their cash in Pakistan in spite of Beijing's involvement.

However, he added that if viewed from the Chinese point of view, then their investment in Pakistan is largely strategic.

"Many are seen by the investor community as an attempt by China to offload its excess capacity and place Pakistan under debt," he was quoted, as saying further.

The CPEC is a China and Pakistan collaboration under the Belt Road Initiative (BRI) spanning a 1,864-mile-long corridor from Kashgar in China's western Xinjiang province to the Pakistani port of Gwadar. It includes the construction of motorways, railways and power plants, and will also make inroads into sectors such as communication and education.

The Government of Pakistan, however, continues to remain optimistic about the CPEC improving the country's economic performance in the long term.

Pakistan's economic growth of 5.3 percent in 2017 is being cited as an example of upward movement, as is the fact that Islamabad is seriously considering to move away from the rupee-dollar exchange rate medium to the rupee- Renminbi exchange rate, given that the relationship between Islamabad and Washington is presently rocky.