China Pakistan Economic Corridor (CPEC): benefits for Pakistan and comparison with Suez and Panama Canals

Abstract

The China Pakistan Economic Corridor (CPEC) is part of China's One Belt, One Road initiative and joins two major economic corridors: The Silk Road Economic Belt and Southeast Asian Maritime Silk Road. CPEC is part of China's regionalism and economic cooperation in South Asia. It will include energy projects, infrastructure development, industrialization, and the expansion and improvement of the Gwadar Port. The project has great potential for Pakistan, both economically and regionally. CPEC faces serious challenges on both internal and regional fronts, however. This thesis will examine CPEC in two ways: through a cost/benefit analysis of the proposed project and a comparison of the project to two other economic corridors, the Suez and Panama Canals. This analysis suggests that CPEC potentially could boost Pakistan's economy, making it a regional economic hub. Whether this will happen depends upon the effective and timely completion of the project, the ensuring of transparency, and efficiency. Furthermore, if Pakistan is able to methodically ensure that the terms and conditions of CPEC are aligned with Pakistan's national interests, Pakistan will likely receive maximum benefits from CPEC and, at the same time, avoid the pitfalls that Egypt and Panama experienced at the hands of investing foreign powers.