Investment can create ‘virtuous circle’ for CPEC

By Hu Weijia Source:Global Times Published: 2019/2/17 20:51:24

After a suicide attack claimed by the Pakistan-based Islamist militant group Jaish-e-Mohammad (JeM) killed at least 40 Indian paramilitary troopers in the Pulwama district, India has said it will ensure the isolation of Pakistan in the international community and withdraw the Most Favored Nation status given to Pakistan.

China firmly opposes and strongly condemns all forms of terrorism. The country, also a victim of terrorism, is expected to do what it can to provide support and assistance to India to enhance anti-terrorism cooperation. 

However, if the terror attack leads to political and economic isolation, ordinary Pakistani people will become the scapegoat of JeM. Poverty has more of a role in terrorism than some Indian experts may believe. If foreign aid and investment can help Pakistan eliminate poverty, the growth environment for terrorism will be destroyed.

"China is promising about $3.5 billion to help bolster Pakistan's dwindling foreign cash reserves" and pay for the country's socioeconomic development plans, the US-based Voice of America reported last week. Although the Chinese government has not confirmed the news, it is unlikely that China will change its supportive attitude on the China-Pakistan Economic Corridor (CPEC).

Under the China-proposed Belt and Road Initiative, investment from China has improved  local infrastructure, resolved the country's chronic energy crisis, and made Pakistan a more attractive destination for foreign investment. We cannot give up halfway. The question now is how to maximize the efficiency of Chinese loans to benefit the local people and Chinese investors.

Although Saudi Crown Prince Mohammed Bin Salman has reportedly postponed his trip to Pakistan amid heightened tensions between India and Pakistan, Pakistan is still likely to get an economic package from Saudi Arabia to support its economy. 

China will be pleased to see the CPEC become leverage for increased economic cooperation between Pakistan and the international community. Closer economic interaction will help maximize the efficiency of Chinese investment and promote regional economic integration. As Pakistan further integrates itself into the global economy, foreign investment is likely to yield more employment benefits and help the country fight poverty. Problems such as security concerns have also posed challenges to the CPEC. If foreign investment can help reduce poverty and fight terrorism in the South Asian country, it will create a virtuous circle for the development of CPEC.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON ECONOMY

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