By Suresh Kumar
As a state in the heart of Asia, Pakistan possesses a unique geography that plays a pivotal role in fostering regional economic connectivity; particularly, through the China-Pakistan Economic Corridor (CPEC). The strategic location allows it to act as a bridge facilitating trade, economic opportunities, and transportation. The interdependence of states helps to develop good economic and political relations and in this way, Pakistan also seeks to promote valuable links to enhance regional connectivity and achieve prosperity.
Pakistan’s geography as a bridge between different regions positions it as a natural corridor for trade and economic connectivity. Borders with India, China, Afghanistan, Iran, and the Arabian Sea make it an ideal gateway for transnational trade. CPEC leverages this strategic location to facilitate more efficient movement of goods, reducing transportation costs, and enhancing regional trade. Pakistan is an active member of regional organizations like the South Asian Association for Regional Cooperation (SAARC), the Economic Cooperation Organization (ECO), and the Shanghai Cooperation Organization (SCO). Through these forums, Pakistan engages in dialogue and cooperation with neighboring countries, working towards shared goals of economic development and regional congruence.
The infrastructure development across Pakistan is the central objective of CPEC, and it has led to several tangible benefits that promote regional connectivity and economic cooperation. Some key ways in which the improvement in Pakistan’s infrastructure has positively impacted regional connectivity through CPEC. The country’s internal transportation infrastructure has improved significantly. These efficient transport networks facilitate the movement of goods and people within Pakistan, enabling far smoother and more efficient connectivity between production centers, markets, and ports. Improved railway connectivity offers a cost-effective and efficient mode of transportation for goods and passengers, facilitating cross-border trade and travel with neighboring countries. The improvement of border crossing facilities and customs procedures has facilitated trade and transit between Pakistan and its neighbors. Streamlined border crossings and reduced bureaucratic barriers have contributed to the smoother and more efficient movement of goods, further enhancing regional connectivity.
Infrastructural development in the Pakistan under CPEC has enhanced prospects of easier commercial activities for Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan via the Gwadar Port, as central Asian republics gained diversified access to international markets and at the same time, reduced their dependence on distant ports. The development of Gwadar Port is the key component of CPEC which make this connectivity a global venture. Its deep-sea location provides access to the Arabian Sea, making it an attractive alternative to congested and distant ports in the region. For China, Gwadar Port presents a shorter and more secure route for energy imports, reducing its dependence on the vulnerable and highly controversial Strait of Malacca.
The Special Economic Zones in Pakistan offer a business-friendly environment with tax incentives, duty exemptions, and streamlined regulatory procedures. China is a key partner in the development of Pakistan’s SEZs, particularly through the China-Pakistan Economic Corridor (CPEC). Chinese companies investing in these SEZs could benefit from lower production costs, favorable regulatory environments, and improved access to regional and global markets. Additionally, SEZs can facilitate technology transfer and skill development between Chinese and Pakistani firms. Countries in Asia, such as Japan, South Korea, and Malaysia, could benefit from Pakistan’s SEZs by leveraging them as manufacturing hubs or investment destinations. These countries could establish production facilities, source materials, or collaborate with Pakistani businesses to access regional markets. If stability is achieved in Afghanistan, Pakistani SEZs could provide opportunities for Afghan businesses to access global markets through Gwadar Port and other trade routes. This could contribute to economic development and regional stability. Pakistan’s SEZs could attract investment from European companies looking to establish production or assembly facilities closer to emerging markets in Asia. The improved infrastructure and connectivity could make Pakistan an attractive location for outsourcing and value-added manufacturing.
Pakistan’s energy projects, such as Sahiwal Coal Power Plant, have increased electricity generation, benefiting not only Pakistan but also contributing to regional stability. Surplus electricity can be shared with neighboring countries like Afghanistan and Tajikistan. Improved energy supply in Pakistan attracts Chinese investment and encourages industries to set up operations. As these industries grow, they create products that can be exported to neighboring countries like Iran and Central Asian nations. The Gwadar Port in Pakistan, a key component of CPEC, serves as an important transit route for energy resources, such as oil and gas, from the Middle East to China. This benefits countries along the route, including Iran, by providing a shorter and more efficient trade pathway. Pakistan’s enhanced energy connectivity through CPEC strengthens its position as a regional energy hub. This stability and cooperation encourage countries like Afghanistan and Turkmenistan to consider Pakistan as a potential partner for their energy needs. The construction and operation of energy projects like the Port Qasim Coal-fired Power Plant create job opportunities in Pakistan. These jobs indirectly benefit neighboring countries by increasing economic activity and reducing migration pressures. CPEC includes renewable energy projects like the Quaid-e-Azam Solar Power Park. Pakistan’s commitment to clean energy inspires other countries in the region, such as Nepal and Bhutan, to explore similar projects for sustainable development.
Porous borders with neighboring countries have encouraged cross-border communities, exemplifying the resilience of people’s connections that transcend political boundaries. Additionally, Pakistan’s geographical location has facilitated regional diplomacy and trade, making it a vital player in the development of economic and diplomatic relations with neighboring countries. China-Pakistan Economic Corridor (CPEC) project exemplifies how the nation’s strategic location can be leveraged to strengthen economic connectivity within the region and beyond. As Pakistan continues to grow and develop, it must embrace its unique geographical advantages while addressing challenges related to infrastructure, security, and sustainable development. A responsible approach to infrastructure, energy security planning will ensure that the benefits of connectivity are shared equitably among all communities, fostering inclusivity and prosperity.
Suresh Kumar is a researcher at Pakistan Council on Foreign Relations (PCFR) and can be reached at talrejasuresh72@gmail.com.
The views expressed in this article are the author’s own and do not necessarily reflect Coverpage’s editorial stance
