Pakistan Institute of Development Economics


Cost and Benefit Analysis of the Four Routs of China Pakistan Economic Corridor (CPEC)

China Pakistan Economic Corridor (CPEC) is part of strategic geopolitical move that promises not only unleashing socio-economic potentials of Pakistan and China, but also augment the strategic position of Pakistan. It endorses that Pakistan would provide a supportive system to transform this move into a truly interconnected world that promotes peace, progress and prosperity. CPEC is a conscious effort to achieve cooperation in different fields including: trade, defense, energy, education and science and technology. Starting their journey from January 1963 from bilateral long-term trade agreement and passing through different phases like free trade agreement in 2006-2007 to China Pakistan Economic Corridor (CPEC), Pakistan’s and China’s “iron-brotherhood” or “all weather friendship” is expected to be further strengthened through this strategically important project. This, if executed properly, will unleash tremendous opportunities for both countries, the region and beyond.

The four routs usually debated in the media are Central route, Eastern route, Western route and Western 2 route. Although CPEC is considered as a game changer for Pakistan but controversy surrounds on route through which CPEC would pass. Some feared that it will create a sense of deprivation among small provinces if original route is not followed; others argue that because of security reasons the cost of the central route will be greater. In this paper, a comparison is made of these four routs with the help of some indicators on which data is available. On the basis of these indicators, the cost and benefit of the four routes is compared and recommendation is made for the selection of most suitable route. Our analysis indicates that the Western 2 rout will be better in terms of cost, provincial harmony and potential for businesses. It will pave the ways for rural industrialisation with the identification of industrial zones along the route but at the same time the security situation along the route should be improved to make the route safe.

Zafar Mueen Nasir, Syed Zulfiqar Ali Shah and Habib Ahmed

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