How will China-Pakistan Economic Corridor hurt Pakistan Export Manufacturers?

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Chi­na Pak­istan Eco­nom­ic Cor­ri­dor at what cost? Is this a real­ly good Eco­nom­ic pack­age for Pak­istan? Will it hurt Pak­istani export­ing goods man­u­fac­tur­ers in future?

Gov­ern­ing par­ty of Pak­istan PML (N) knows that any ener­gy plan which could bring elec­tric­i­ty is an easy sell to the peo­ple of Pak­istan and they are using this to give Chi­na an excess to Gawadar port. PML (N) Gov­ern­ment might not even know how this will hurt Pak­istan export­ing goods man­u­fac­tur­ers in future.

First of all we the peo­ple of Pak­istan should know NOTHING IS FREE and any­one who is invest­ing mon­ey in any project is look­ing for his own ben­e­fit. So don’t think Chi­na is help­ing Pak­istan because we are friends. We have to ask some tough ques­tions from the rul­ing par­ty about CPEC and its impact on our own econ­o­my.

Is this real­ly a good deal for Pak­istan? Mr. Ahsan Iqbal, the min­is­ter of plan­ning and devel­op­ment is call­ing this a deal of the cen­tu­ry. This is a much bet­ter deal for Chi­na but not for Pak­istan. Pak­istan is giv­ing $35 bil­lion busi­ness to Chi­nese com­pa­nies and investors plus a big trade route for­ev­er and Chi­na is giv­ing Pak­istan a loan of $11 bil­lion in return.

Accord­ing to Mr. Ahsan Iqbal $35 bil­lion will be invest­ed in Ener­gy Sec­tor, which will be built by Chi­nese Com­pa­nies. In sim­ple words we are giv­ing $35 bil­lion busi­ness to Chi­nese com­pa­nies to gen­er­ate elec­tric­i­ty and he didn’t explain that what will be the cost of this elec­tric­i­ty? Also there will be $11 bil­lion loan and again he didn’t explain that how much inter­est we have to pay. Pak­istan already has a big finan­cial debt to pay. Why are we keep adding in that debt?

Chi­nese econ­o­my depends main­ly on man­u­fac­tur­ing and export­ing their goods and they want their econ­o­my to keep grow­ing and bring­ing their cost of exports down. Chi­nese are look­ing dif­fer­ent ways to achieve their goal. Chi­nese econ­o­my will suf­fer if their man­u­fac­tur­ing boom is slowed down, which is declin­ing right now. They need this trade route to our Gawadar port so they can bring their cost of man­u­fac­tur­ing down.

Chi­na is giv­ing an invest­ment pack­age of $46 bil­lion to Pak­istan which most of Pak­istani experts believe will nev­er be ful­ly mate­ri­al­ized. About this project, most devel­op­ment state­ments which come from Pak­istan Gov­ern­ment are just a way to get around. Major­i­ty of Pak­istani econ­o­mists think that it will not help Pakistan’s trade because Chi­na doesn’t import much from Pak­istan, how­ev­er right now Chi­na has a trade imbal­ance of 50% with Pak­istan.

If Pak­istan is giv­ing $35 bil­lion busi­ness to Chi­na, as a fair trade Chi­na should give same dol­lar amount busi­ness to com­pa­nies of Pak­istan. Gov­ern­ment of Pak­istan will not do this, because in that case it will have a very less chance of any com­mis­sions or kick­backs for Politi­cians.

More like­ly every Gov­ern­ment of Pak­istan has done those devel­op­ment projects which they can get com­mis­sions and kick­backs. The politi­cians who are not hap­py with this Chi­na-Pak­istan cor­ri­dor and as soon as they will get some part from $46 bil­lion project, they will stop com­plain­ing.

By PML(N) Gov­ern­ment this project is the project of the cen­tu­ry and turn­ing point for Pak­istan. Let me remind you that PML(N) has always said the same kind of state­ments for all their pre­vi­ous failed projects. 1- Qarz Utaro Mulk Sawaro, 2- Yel­low Taxi, 3- Sasti Rooti and so on.

Peo­ple of Pak­istan need jobs that are good pay­ing white col­lar jobs for our edu­cat­ed peo­ple. Stu­dents those who are fin­ish­ing their degrees are very dis­ap­point­ed in future of find­ing jobs. This gov­ern­ment needs to change its eco­nom­ic plan­ning team and get help from experts those who can help in cre­at­ing new jobs.

Here is one exam­ple of our city Sialkot:

This Chins­es trade route will dimen­sion most of Pakistan’s hard earned for­eign exchange by our export­ing goods man­u­fac­tur­er. This route will kill jobs and destroy export sec­tor. Our exporters already have very tough com­pe­ti­tion with Chi­na in the world’s mar­ket as of right now.

Sialkot is the only big indus­tri­al city of Pak­istan which was nev­er con­nect­ed with any major Motor­way because Sialkot always had a week lead­er­ship and politi­cian.

Sialkot is the sec­ond largest city of Pak­istan in man­u­fac­tur­ing and export­ing goods for more than 100 years. Sialkot is export­ing goods since 1918 and now sup­ply­ing goods to almost every coun­try of the world, direct­ly or indi­rect­ly.
Sialkot exports are around $ 2 bil­lion annu­al­ly and it is strength­en­ing our nation­al econ­o­my, also it has more than 10,000 man­u­fac­tur­ing com­pa­nies. Sialkot pro­vides employ­ments to more than 700,000 peo­ple direct­ly or indi­rect­ly.

Sialkot is the world’s largest pro­duc­er of hand-sewed foot­balls, with local fac­to­ries man­u­fac­tur­ing 60 mil­lion foot­balls a year, amount­ing to rough­ly 70% of world pro­duc­tion.

The world’s biggest brands sourc­ing a large por­tion of their sup­plies of goods from Sialkot are Adi­das, Nike, Puma, Select, Lot­to, Umbro, Mitre, Micas­sa, Diado­ra, Wilsons and Decathlon. Sialkot sup­plies foot­balls from this export-ori­ent­ed city and hub of cot­tage indus­try of the coun­try.

Sialkot’s sur­gi­cal instru­ments are export­ed to Unit­ed States, Ger­many, Unit­ed King­dom, France, Italy, Dubai, Japan, and Nether­lands and 20% to rest of the world.

Sialkot’s oth­er big export­ing sec­tor is Leather gar­ments and this sec­tor is bring­ing an impor­tant for­eign exchange for Pak­istan. It is earn­ing 217 Mil­lion, employed more than 12,000 employ­ees and 217 unite of big and small fac­to­ries.

Sialkot’s man­u­fac­tur­ing indus­try includes:

Sport­ing Goods: All Crick­et sport­ing goods, All Hock­ey sport­ing goods, Polo Sticks, Foot­balls, etc.
Sports­wear: Track suits, Box­ing, Cycling, Shorts, T‑shirts, Wind break­ers, Judo/Karate kits, Casu­al wear, Stock­ings, etc.
Leather Gar­ments: Leather jack­ets, Leather gloves, Leather belts, etc.
Sur­gi­cal Instru­ments: All kind of sur­gi­cal instru­ments.

All of Sialkot man­u­fac­tur­ing indus­try has very tough com­pe­ti­tion with Chi­na and if we will give Chi­na this easy and free trade route then most of Pak­istan export­ing indus­try will suf­fer. At the end Pak­istan will suf­fer. Do the peo­ple of Pak­istan need this elec­tric­i­ty with the cost of killing Export Man­u­fac­tur­ers, Jobs and hard earned For­eign Exchange?

When Mr. Pres­i­dent Bill Clin­ton made free trade deal with Chi­na, most of politi­cians didn’t under­stand the long term eco­nom­ic effects, that it will hurt Amer­i­can Jobs and helped Chi­na the most. Now Amer­i­can are begin­ning to real­ize and try­ing to reverse that deal. Amer­i­ca is a strong coun­try. It can come back and make changes to help Amer­i­can econ­o­my but Pakistan’s indus­try can’t sur­vive if this deal will go through. Exporters of Pak­istan should be very con­cerned and raise their voic­es before it’s too late.

Image: Sabir Nazar