ISLAMABAD, (APP): Special Economic Zones, a key component of the China Pakistan Economic Corridor (CPEC), is expected to usher in a new era of industrial development and economic growth in the country in the days ahead.
As both the Pakistani and the Chinese authorities, at a recent interaction, had reviewed progress on Special Economic Zones, they had a common notion that SEZs would help boost economic activity in the country, generate employment opportunities and earn foreign exchange.
Officials of the Board of Investment (BoI) Pakistan and Chairman National Development and Reform Commission (NDRC), China, Ying Xiong, the Zhejiang, Shandong, and Guangdong provinces had reiterated to encourage their enterprises to develop linkages with Pakistan’s provincial Bois and invest in the SEZs.
Pakistan is currently developing five out of nine SEZs nominated under CPEC including Allama Iqbal Industrial City in Faisalabad, Punjab, Dhabeji SEZ in Sind, Rashakai SEZ in Khyber Pakhtunkhwa, and Boston SEZ in Balochistan. Another fast-track SEZ is in Gwadar namely Gwadar Free Zone is also under progress.
The first phase of Gwadar Free Zone at an area of 60 acres of land is already fully functional while the mighty second phase spanning over 2200 acres of land is under construction.
According to the CPEC officials, dozens of Chinese firms were operating in Pakistan’s various economic zones as both the governments were actively engaged to carry forward the SEZ projects and make them operational at the earliest possible.
In the recent past, numerous Chinese companies’ representatives had visited Pakistan to discuss some outstanding issues and were informed that all issues on way to making these projects a success, would be resolved on priority.
Pakistan is interested to relocate the Chinese industries to the CPEC SEZs to benefit from the expertise of the companies.
Textile, information technology, agriculture, science, and technology sectors, and mining sectors are the key areas in which Pakistan is keen to bring foreign direct investment in a bid to boost exports and substitute the country’s imports.
The upcoming projects in CPEC would mainly be in these sectors which would act as a dual-beneficial tool, cutting down the country’s imports and increasing the exports.
Meanwhile, a senior official on the CPEC Authority has informed that it was a wrong perception that only China was involved in the CPEC projects. He said a number of investors from other countries such as the United States, Germany, the United Kingdom, Canada, and the Netherlands were also participating in this mega project and around 20 companies from these countries had already invested in the Allama Iqbal Industrial City.
With respect to Rashakai Economic Zone, he said its completion would encourage foreign investment and provide adequate facilities to foreign investors.
The senior official said the opportunity to transform the trade corridor into a true economic corridor, after 9 long months of negotiations, the signing of the quad-partite development agreement for the development of the first CPEC SEZ i.e. Rashakai SEZ, in KP was made possible.
Rashakai SEZ is to be developed in collaboration with a state-owned Chinese enterprise, which makes this development agreement the first of its kind with the Chinese counterpart being one of the parties to the development agreement.
The official said that over 84% of the industrial area has been allotted in the SEZs, 46% of the investment has been realized with 50% of it being Foreign Direct Investment (FDI).
The Federal Government has exempted Rs 49.39 Billion of custom duties and taxes on the import of plants and machinery for setting up of units in these zones.
Overall, the official said that all the notified SEZs together across the country, account for approximately 10,029.64 acres of industrial land out of which 5,220.62 acres (52%) have been allotted to investors for setting up of industry with planned investments of Rs. 633.9 Billion, 43.6% of this comprises of FDI component (USD 1.73 Billion).
It is also significant to mention that under the SEZ Act 2012, a zone enterprise is obligated to start construction within six months and to get into commercial production/operations within 24 months of its approval, whereas title to land is to be transferred only after it has performed regular operations for six months.
Experts believe that China’s Pakistan Economic Corridor is a rare opportunity for Pakistan to boost its economy and overcome a deepening economic recession. Since, the country is facing a trade deficit, depleting reserves, downing rupee value, and a number of other challenges; this initiative can turn things around leading the country to economic stability.
They also expect the upcoming government to fully focus on these projects so the country could be able to reap the benefits of this historic project between China and Pakistan at the earliest possible.
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