Ayesha Saba

Unlike the initial phase, which primarily focused on infrastructure development, CPEC 2.0 must prioritize targeted investment in key sectors to ensure sustainable economic growth and industrial innovation.

Talking with WealthPK, Liaqat Ali Shah, Executive Director and Head of the Policy Division at the CPEC Centre of Excellence, said that merely expanding the corridor’s footprint is not enough; rather, Pakistan must align its economic policies with sector-specific growth strategies to maximize the long-term benefits of this initiative. He highlighted that a fundamental flaw in Pakistan’s approach to CPEC so far has been the lack of industry-specific incentives to attract investment in productive sectors.

“CPEC 1.0 laid the foundation by enhancing transport and energy infrastructure, but now the focus must shift towards leveraging these developments for industrial expansion,” he noted. While infrastructure and energy remain vital, excessive reliance on these areas could overshadow other crucial industries such as agriculture, which holds significant export potential. One of the pivotal components of CPEC 2.0 is the development of Special Economic Zones (SEZs).

It is imperative for Pakistan to ensure that these SEZs are equipped with world-class infrastructure, streamlined regulatory frameworks, and a readily available skilled workforce, he said. According to him, by focusing on sectors such as technology, manufacturing, and agriculture, these zones can become engines of economic transformation, providing opportunities for local industries to benefit from Chinese expertise, investment, and technology transfer.

Furthermore, he emphasized that policymakers should implement targeted incentives to facilitate joint ventures between Chinese and Pakistani enterprises. Such collaborations would enable local industries to gain access to advanced manufacturing techniques, automation processes, and research and development capabilities.

Failure to move beyond mere assembly of low-value goods could result in missed opportunities for long-term industrial advancement. “We need policies that require foreign investors to partner with local companies, engage in knowledge-sharing, and invest in research and development (R&D) that ensure sustainable economic growth and industrial competitiveness. Without innovation, Pakistan risks remaining a low-value producer in global supply chains.”

He concluded by saying that reducing policy uncertainty, maintaining a consistent regulatory framework, and fostering investor confidence could attract both domestic and foreign investment. By focusing on sustainable industrial growth, Pakistan could establish itself as a competitive player in the global market while ensuring economic resilience and long-term prosperity.

Credit: INP-WealthPk