Complexity of #CPEC Cost-Benefit Analysis

[ajpirzada]

The transformation which the China-Pakistan Economic Corridor (CPEC) will bring forth may be exaggerated but it surely has expanded the national discourse by introducing elements of economic development to it. Before I proceed, two general points must be made. First, hypothetically speaking, even if CPEC is only a passageway for the Chinese goods, there are significant positive externalities – developmental and geopolitical – associated with trade routes. Second, such projects have long lasting distributional consequences which could be easily managed at the conception stage.

Here I will focus on the effects of the CPEC on the Balance of Payments (BoP) of Pakistan.
...
An honest assessment of CPEC must, therefore, carefully evaluate its impact on real economic activity rather than focusing on its magnitude alone.
...
It must also be considered how investing billions of dollars in an already established eastern trade route may further contribute towards growth? What are the opportunity costs? Could there have been alternate projects which would improve our trade linkages and open new markets for our exporters?
...
Overall, the direct effect of CPEC on the BoP maybe short lived but potential indirect benefits through an improvement in the real economic activity could be substantial. However, much depends on the architecture of CPEC. Is it designed as a set of scattered projects largely intended to achieve immediate political objectives with economic returns as a by-product? Or is each project seen as a part of whole aimed at transforming Pakistan into a regional trade hub? I want to be optimistic.

finding a Highway to HOPE: Complexity of #CPEC Cost-Benefit Analysis



what do you people think? Agree or disagree? express your views plz

 

[Dubious]

The transformation which the China-Pakistan Economic Corridor (CPEC) will bring forth may be exaggerated but it surely has expanded the national discourse by introducing elements of economic development to it. Before I proceed, two general points must be made. First, hypothetically speaking, even if CPEC is only a passageway for the Chinese goods, there are significant positive externalities – developmental and geopolitical – associated with trade routes. Second, such projects have long lasting distributional consequences which could be easily managed at the conception stage.

Here I will focus on the effects of the CPEC on the Balance of Payments (BoP) of Pakistan.
...
An honest assessment of CPEC must, therefore, carefully evaluate its impact on real economic activity rather than focusing on its magnitude alone.
...
It must also be considered how investing billions of dollars in an already established eastern trade route may further contribute towards growth? What are the opportunity costs? Could there have been alternate projects which would improve our trade linkages and open new markets for our exporters?
...
Overall, the direct effect of CPEC on the BoP maybe short lived but potential indirect benefits through an improvement in the real economic activity could be substantial. However, much depends on the architecture of CPEC. Is it designed as a set of scattered projects largely intended to achieve immediate political objectives with economic returns as a by-product? Or is each project seen as a part of whole aimed at transforming Pakistan into a regional trade hub? I want to be optimistic.

finding a Highway to HOPE: Complexity of #CPEC Cost-Benefit Analysis



what do you people think? Agree or disagree? express your views plz

Well in all honesty it is how you see it

Those who see the Eastern one beneficial see it coz it is underdeveloped and would be cheaper to displace the people as they dont really pass through agriculturally active zones ...And I think this one also connects some parts of Punjab and Karachi to the CPEC.

The central one would benefit the already rich and those who already have a trade route to have a better one

The last one would benefit the people of KPK and Baluchistan who again dont have proper roads to do trade ...

 

[ajpirzada]

Well in all honesty it is how you see it

Those who see the Eastern one beneficial see it coz it is underdeveloped and would be cheaper to displace the people as they dont really pass through agriculturally active zones ...And I think this one also connects some parts of Punjab and Karachi to the CPEC.

The central one would benefit the already rich and those who already have a trade route to have a better one

The last one would benefit the people of KPK and Baluchistan who again dont have proper roads to do trade ...

true that! each route has its pro-cons. Choosing one particular route over the other has strong distributional consequences but they do not significantly effect overall economic growth atleast during the short to medium term. As long as it doesnt get too bad, hopefully, things should not fall apart.

 

[RazorMC]

I would favour a route through western Punjab and Balochistan. While low population rehabilitation and construction sounds economical, the terrain in a lot of that region would raise the construction costs. Flat, arid terrain is better suited to this for financial reasons. It can also be close enough to all four provinces for maximizing internal trade benefits.