The Centre for Public Policy and Governance
Forman Christian College (A Chartered University)
Cordially invites you to join us for
a webinar on:
‘Transformations in Pakistan’s Political Economy and CPEC’
Thursday, 23rd June 2022, 5 PM (PKT) on
Venue: Rt. Rev. Alexander John Malik Public Policy seminar room E-002
Distinguished Guest Speaker Professor Matthew McCartney
Professor Matthew McCartney spent twenty years as an academic at the School of African and Oriental Studies (SOAS), University of London (2000- 2011), and at the University of Oxford (2011-21). He has been a visiting Professor at Universities in China, Pakistan, India, Japan, South Korea, Poland, and Belgium. He is a development economist by background with a teaching and research specialization in the economic development of India and Pakistan after 1947. He has published, supervised, and taught on
economic issues relating to industrialization, technology, trade, the role of the state, investment and economic growth, and human development issues relating to nutrition, employment, education, poverty, and inequality. He has also worked for the World Bank, USAID, EU, and UNDP. He holds a BA in Economics from the University of Cambridge, an MPhil in Economics from the University of Oxford, and a Ph.D. in Economics from SOAS, University of London. He has published eight books and his latest book is the outcome of two years of research-based in China and Pakistan ‘The Dragon from the Mountains: The CPEC from Kashgar to Gwadar’ and was published by Cambridge University Press in 2021. He is currently a senior researcher at the Charter Cities Institute, Washington, D.C
After years of failing short-term IMF programmes, Pakistan has been promised a well-financed, long-term developmental partnership; the China–Pakistan Economic Corridor (CPEC). Between 1970 and 2001, a desultory $7billion of foreign investment dribbled into Pakistan. China has promised to invest more than $60billion in roads, railways, energy, industrial parks and other projects between 2015 and 2030. Supporters dream that CPEC will help Pakistan emulate the rapid growth of the 1960s era Asian Dragon economies.
CPEC detractors argue that CPEC is about Chinese access to oil or the deep-water port at Gwadar and that CPEC debt will increase Chinese leverage over Pakistan’s domestic and foreign policy. This research, for the first time, utilises the large and rigorous global economic literature on the economic impact of big infrastructure projects and combines it with a deep understanding of Pakistan’s political economy to think about the likely impact of the CPEC. The case studies include among many others Indian railways (1860s), the US highway system (1950s), and the Japanese bullet train (1960s), the Suez Canal (1860s). Big infrastructure can transform the economy, generate economic enclaves to serve foreign investors, or create white elephant projects with little economic rationale.
Pakistan has experienced 70 years’ worth of moderate economic success. In 1947 75% of Pakistan’s GDP and 99% of its exports were dependent on agriculture and raw materials. By the mid-1990s, the share of industry had overtaken that of agriculture in GDP and 80% of Pakistan’s exports were by then manufactured goods. In 1947 the vast bulk of Pakistan’s exports went to India. By 2019 Pakistan exported to almost 200 countries. In 2019 Pakistan was a middle-income country with a GDP of $320 billion. $60 billion CPEC investment over 15 years will not transform Pakistan. The presentation argues that telling this more positive story about Pakistan should not distract policymakers. There are significant constraints on economic growth, such as education and skills, lack of long-term credit, enforcing contracts and political instability, which will not be tackled by CPEC. CPEC optimists could unwittingly prove a distraction by convincing policymakers that CPEC will provide a solution to all of Pakistan’s woes.