How to Boost Pakistani Exports through CPEC?

Pakistan’s economy lags behind on the export front for decades, which contributes to trade and current account deficit. Although the government has announced several industrialization policies in the past, but no significant change has been observed. Under the China Pakistan Economic Corridor (CPEC) framework, projects related to infrastructure, energy, Gwadar and industrial development are launched with the pristine objective to regain economic growth. Major structural shifts are expected that will overcome the basic bottlenecks of the economy. The manufacturing sector will also experience a change because of industrial cooperation with China through the development of nine special economic zones (SEZs) under the CPEC framework4. These SEZs are located in different regions all over the country, including Punjab, Sindh, Balochistan, Khyber Pakhtunkhwa (KPK), Azad Jammu and Kashmir (AJK), Tribal Area of KPK, (former FATA) and Gilgit Baltistan (GB).
The targets chosen for these SEZs are to upgrade the industrial sector, promote export and substitute import of Pakistan. The targets may be achieved through relocation of Chinese industries, up-gradation of technology and up-scaling the prevailing manufacturing units of Pakistan. These SEZs can be the possible export machineries for Pakistan in integration to the global value chain. However, special emphasis maybe given while relocating certain industry from China to Pakistan. Industries where we have Latent Comparative Advantage (LCA) may be chosen5. This policy research has applied a well-known technique of Growth Identification and Facilitation Framework (GIFF) for Pakistan to identify those industries in which Pakistan has LCA and advantages of backwardness.