Globalization and CPEC

Globalization and CPEC

Globalization make urbanization in Pakistan strong and should be reason to reduce poverty in Pakistan for long run due to investment increase in urban area in Pakistan its lead to reduce poverty in urban population who directly effect on Pakistan economy. Developing countries like Pakistan have limited resources that hinder their integration in the international market. Theoretically, liberalization, another cardinal principle of globalization, is a process ultimately aimed to make the export market profitable by encouraging competition, improving quality and providing employment. Pakistan’s share in the world merchandize exports, however, has fallen. Import liberalization on the other hand has been a gradual process where a downward trend is visible in the import tariff rate since the 1990s thereby encouraging imports. Such policies, for a developing country like Pakistan have proved to be not as useful. The Trade balance of the country has further widened and many domestic industries were harmed during the process. The harm to the domestic industries coupled with the ever growing population has caused the unemployment rates to shoot up. The unemployment rate, increased from an average of 3.5% during 1981-90 to 6.0% in 2015 (Economic survey 2014-1015). A holistic approach of geographical inter-connectivity either via sea, land or rail routes or through regional economic forums is needed. Pakistan is already a founding member of SAARC (South Asian Association for Regional Cooperation) and member of SCO (Shanghai cooperation Organization), SAFTA (South Asian Free Trade Agreement) and ECO (Economic Cooperation Organization). Recently at the SCO Summit in UFA Russia decided to accept Pakistan and India as full members of SAFTA. China Pakistan Economic Corridor (CPEC) is another landmark of regional connectivity for Pakistan. However, these forums need to be utilized to their full potential The CPEC will play a vital and vibrant role in this regard. The Gawader port, a key project of CPEC, will serve as a global economic activity hub and a complement to the existing Chahbahar port in Iran. All the economic activity including transportation of oil and gas to Central Asia be carried through this sea route placing Pakistan in an important position in the globe and positively affecting its relations with other countries. Globally, economic integration is largely linked with fulfilment of WTO obligations, on which Pakistan is currently lagging behind. Pakistan has been given a GSP+ status by the European Union wherein Pakistan is given a free trade agreement for 75 items. It, however, has not been able to utilize this status fully, since many of its preconditions have not yet been fulfilled. Therefore, Pakistan should focus on these preconditions and try to diversify its product range and markets to fully compete in the international forums. Pakistan’s trade is currently limited not only in products and markets but also in regions (mainly Europe and America). Other countries like Africa and Central Asia, which are full or resources, have not yet been explored. Therefore, Pakistan needs to widen its regional trade base which can only be achieved through better foreign relations and marketing good quality products ( Sohail Jahangir) poverty in Pakistan should be decrease if Pakistan contribute in globalization properly.