WASHINGTON: A World Bank economist, who co-authored a report preparedjointly by international donor agencies, has said that China PakistanEconomic Corridor (CPEC) is among those rare projects of its kind whichwill create large economic surpluses and will have positive impact allacross the society.
“The largest economic gains from investing in transport corridors may arisefrom urbanization and job creation around this new infrastructure, ratherthan from many more vehicles using it,” said Martin Melecky, the World Bankeconomist, adding that not all Corridor investments were equally successfulin creating “large economic surpluses that spread fairly throughoutsociety”.
The ADB report titled “The Web of Transport Corridors in South Asia” notedthat the $60 CPEC, which has huge investment in road, railways and ports,offers enormous potential for the country to boost its economy, reducepoverty, spread benefits widely and help those likely to be affected by thenew trade route.
The report was published by the Asian Development Bank, the UnitedKingdom’s Department for International Development, the Japan InternationalCooperation Agency, and the World Bank, and discusses several economiccorridors including CPEC.
The report drew a comparison with CEPC and many other transport corridorsbeing implemented across Asia which, it added, would cost trillions ofdollars to implement, far exceeding the financing resources available.
The joint report reviews the international experience with economiccorridors, from the Pacific Ocean Belt in Japan in the 1960s to high-speedtrain networks in Europe more recently.
The countries undertaking these projects would need to prioritize the mostpromising corridors that will deliver the expected transformative impactsfor their economies and people. Engineering designs and geopoliticalconsiderations could be important, but sound economic analysis is the keyto designing truly successful corridors, the report argues.
According to the report, the ability of large-scale transport investmentsto generate wider economic benefits depends on the population density inthe areas they cross. Their capacity to spur structural transformationalong the way depends on complementary factors around the transportcorridors, such as the skills of the local population or restrictions onlocal land use.
The new transport infrastructure must come with the means for people totake advantage of the improved connectivity right from the start, it said.
The World Bank Country Director for Pakistan noted that the upcoming KhyberPass Economic Corridor project was a positive example, where tradefacilitation and the development of local economic activities wereexplicitly integrated in the design of the project.
The joint report also analyzes the impacts of the Golden Quadrilateralhighway system in India and finds positive effects, including highereconomic activity and better (non-farm) jobs for women. However, airpollution rose in parallel and gains in household consumption were notequally shared across connected districts, it noted.
Appraisal simulations for CPEC and the Kolkata-Dhaka corridor suggest thatcomplementary measures are needed to improve local conditions that in turnwill create formal jobs and generate tax revenues that could pay forcorridor investments.
In light of the international evidence and specific analyses for SouthAsia, the report advocates for a more comprehensive design of corridorprograms that actively manages tradeoffs and closes potential financinggaps in a sustainable manner. – APP