Job Creation under CPEC: A Reality

The China-Pakistan Economic Corridor umbrella intends to provide a structural transformation in the region of Pakistan. Before the initiation of China-Pakistan Economic Corridor project, it has never been considered as an infrastructure specific project subject to construction of some roads, bridges etc. rather a developed structure of business cycle has been established to run in the streamline of Pakistan. It is regarded as a 1+4 portfolio, which includes upgradation in the prevailing infrastructure followed by development in the energy sector to help facilitate industrial expansion and eventually export the produced goods through the port of Gwadar after establishing it. Therefore, CPEC project starts from the production, transportation and eventually exports of goods produced under the “Industrial Estates” referred to as Special Economic Zones (SEZs) [1] under CPEC.

Industrial Development in any country is considered as a core element for an economy to sustainably grow. This growth is not limited to just upsurge the values of GDP rather an uplift of the society in terms of developed life standard is the real picture, one could depict. These projects will certainly support in shrinking the unemployment rate, which currently persists at 5.9 percent. According to the international labour organization (ILO), CPEC is estimated to create 400,000 jobs in the country, while according to the estimates of Applied Economic Research Centre, the mega-initiative would provide around 700,000 direct jobs between 2015 and 2030. The Planning Commission’s data shows even more promising results, with CPEC generating around 800,000 jobs in the next 15 years. Centre of Excellence for CPEC has also conducted a study in which 1.2 million jobs have been projected within the time span of 2013-2030.

In the early harvest projects, an employment nostalgia was observed through various sources that “Chinese would bring in their own labor”, whereas, the ground reality reported in contrary to the proposed accusation. Field survey in the early harvest projects including infrastructure construction of CPEC and related projects reported to generate almost 51,000 jobs from which 97% of the labors were local, in contrast, to 3% of whom were categorized as Chinese labors. On the other hand, field survey of energy projects, although reported more skilled Chinese labors inducted in its construction phase, however, in the operational phase the proportion of figures drastically changed, employing more domestic skilled workforce in these projects.

It is evident from a bulk of studies that, the production units in order to maximize their profits follow certain policies to minimize their costs, especially associated with the inputs a firm require. For this, one study found that Sahiwal Coal Power Plant, China Power Hub Generation Company and other renowned energy projects are replacing their highly paid Chinese technicians with the relatively economical domestic skilled workforce. To make this possible, keeping in view the fact that the prevailing engineering graduate skill-set was insufficient to meet the requirements for technical personnel, Chinese administrators began by being focused on the employment of graduates from specific universities in Pakistan. The first batch of engineers were completely hired from the Pakistan universities including University of Engineering and Technology Lahore (UET) and the National University of Sciences and Technology (NUST) Islamabad in Sahiwal coal power plant. The graduates hired from UET numbered 80 to 90 out of 124 engineers, while the rest were from NUST. However, the next recruitment cycle in 2016 was derived from almost all accredited engineering institutes of Pakistan. The employees, soon after recruitment, were sent to China for 6 months of technical training and later sentto UET to complete a 12-module training program specificallydesigned for the operational phase of the Sahiwal plant.

Currently, foreign workers are mostly employed in the maintenance department and have an exit window from the Pakistani labour market by three years. In this regard, around 100 domestic labourers on managerial level have been hired in the maintenance department, whereas, with a hundred more expected for this fiscal year. Moreover, the mentioned plants have initiated vocational and training centres at their site areas to provide free of cost trainings to the local semi-skilled workforce that will help them to equip with the sophisticated skill sets.

Likewise, almost 75000 jobs have been availed by locals in the early harvest projects of CPEC according to the field survey conducted by CoE-CPEC. Furthermore, in the study employment projection were made regarding the SEZs based on different scenarios; such as for emerging market and developing economies. Up till now, the discussion is hovering around the initial projects besides the industrial development in SEZs in near future. International Labor Organization’s (ILO) database reported 3,500 zones in 130 countries and today one can find more than 4300 SEZs around the globe and the number is increasing rapidly. The sustainable development is the basic reason behind this progress that comes with the establishment and successful function of a SEZ. Countries use SEZs as a tool for industrialization. According to an estimate, SEZs, all over the world, have generated approximately 66 million jobs out of which 30 million are solely located in China, see ILO 2003, 2007 and Aggarwal, 2010.

Based on the employment opportunities created in 4300 SEZs all over the globe, certain analytical tools are identified to facilitate in estimating the probable job creation in the 9 SEZs of Pakistan under CPEC. These jobs are identified after specifying the industries which may relocate to the prioritized three SEZs, namely, Dhabeiji, Faisalabad and Rashakai. The potential relocation of industries in these areas have been identified after critically analysing the local endowments. It has also been discussed and agreed upon that the industries relocating in Pakistan will not be of same capacity as existing in Pakistan, rather, the industries will add value in the domestically produced goods. Such industries are mostly labour-intensive, which, will provide massive opportunities to the domestic workforce.

The projections of job creation under future CPEC projects are estimated after considering the SEZs already operating globally. Moreover, Centre of Excellence for CPEC has collaborated with National Vocational and Technical Training Commission (NAVTTC) to conduct a research study in which the future demand of workforce on different trade level will be identified. Furthermore, to streamline the data, a National Job Portal for CPEC is underway to be launched in order to register the Chinese companies so that the companies list down their future demand and thereby, provide enough space to the skill development institutions to train the available domestic youth for the mega projects coming ahead.

Annex-1

This article was published in Pakistan Observer on March 13, 2019.