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China Pakistan Economic Corridor 30 JANUARY 2016. Contents. Where the region stands Pakistan’s current situation and its role What is CPEC Catalysing growth with CPEC Benefits to Pakistan Benefits to China Benefit to Region.
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Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
CPEC via Gawadar Port will act as a funnel for Western China, Northern India, Central Asia and Afghanistan South Asia remains one of the least integrated regions in the world
Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
Pakistan is falling behind in all social indicators in South Asia Literacy Rate 2014 Life Expectancy Infant Mortality
Pakistan’s GDP and GDP per Capita is among the worst in South Asia GDP (US$) GDP Per Capita (US$) Source: World Development Indicators, World Bank
Investor Confidence via FDI FDI (US $) Source: World Development Indicators, World Bank
Unavailability of electricity is a barrier to growth Energy Crisis- Electric Power Consumption Source: World Development Indicators, World Bank
More road connectivity is required for a progressive economy Lack of Infrastructure- Road Network Source: World Bank Report 2013 10
Pakistan’s political instability over the years has hurt the confidence of investors Political Instability Ranking: Ease of Doing Business 2015 1:Easiest to 189:Most Difficult Ranking: Political Stability and Absence of Violence Source: Doing Business, World Bank Source: Worldwide Governance Indicators, World Bank
Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
Panama Canal • handles 5% of all seaborne trade • Panama Canal Authority earns over 2.5 billion USD per annum • Suez Canal • handles 10% of all seaborne trade. • Egypt earns over 5 billion USD per annum directly from tolling revenues.
CPEC focuses on building the necessary infrastructure and energy self sufficiency for Pakistan’s economic take-off CPEC Portfolio Net FDI over the years Total CPEC Investment Source: State Bank of Pakistan
Gwadar will be developed into an international standard deep-sea port which will enhance regional connectivity and trade Development of Gwadar Coastal Highway Joint Defense Coal Fired Power Plant EPZ Industrial Area GIEDA Residential Area New Airport Water Transmission Line LNG Terminal ` Export Processing Zone GDA Hospital Pak-China Technical Training & Vocational Center ` ` Free Zone West bay New Airport ` East bay ` Eastbay Express Way LNG Terminal Arabian Sea Friendship Hospital Free Zone Technical & Vocational Institute East Bay Expressway
Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
Due to the energy initiatives under CPEC, Pakistan is expected to meet its electricity demand by 2018 Energy Demand/Supply Forecast 2016 2017 2018 17
Sustainable Growth Source: BMA Capital Management Limited, Investor 360
Employment Source Jobs Study 2013 , IFC World Bank
Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
Benefit to China Short Distance and Low Cost • Europe to Western China Route • Distance will be reduced by 50% • Cost of transportation will be lowered by 50-65% • Time cut by 50% • Middle East to Western China Route • Distance will be reduced by over 80% • Cost of transportation will be lowered over 75% • Time cut by over 85% Safer Route • 60 percent of China’s imported oil comes from the Middle East, 80 percent of that is transported to China through the Strait of Malaaca • CPEC will allow China an alternative route, to move energy and goods to inland China without going through the Strait of Malacca (bypassing an entire region influenced by the US and India)
Existing Trade route Distance Europe to Western China 19132 miles Middles East to Western China 12537 Miles
Trade route- CPEC • Middle East- Western China • Distance will be reduced by over 80% • Cost of transportation will be lowered over 75% • Time cut by over 85% • Europe- Western China • Distance will be reduced by 50% • Cost of transportation will be lowered by 50-65% • Time cut by 50%
Contents • Where the region stands • Pakistan’s current situation and its role • What is CPEC • Catalysing growth with CPEC • Benefits to Pakistan • Benefits to China • Benefit to Region
$570 Mln to $5.7 Bln $800 Mln to $8 Bln $600 Mln to $6 Bln
$570 Mln to $5.7 Bln $800 Mln to $8 Bln