CPEC contributing to socio-economic development of Pakistan

China-Pakistan Economic Corridor (CPEC), the flagship project of Belt and Road Initiative (BRI) has emerged as a symbol of peaceful development in Pakistan and most importantly known as a cornerstone for job creation in the country.

Pakistan, being a close neighbour and with having a brotherly relationship with China, is lucky enough to get the best cooperative agreement under BRI that has laid the foundation of infrastructural development, building of energy projects and industrial zones, modernization of agricultural infrastructure, development of Gwadar port and many other significant achievements has been recorded.

The very latest development recorded shows that Pakistan’s exports to China crossed $1.605 billion in the first five months of 2022, up 5.42% year on year.

Pakistan Embassy Commercial Counsellor in Beijing Badaruz Zaman said that “China-Pakistan free trade agreement will create more space for service trade. Bilateral trade between the two countries will cross $50 billion within the next five years. This year, the trade volume will cross $32 billion.

It shows that since the launch of CPEC trade activities between two sides have also geared up and cultivated the benefits for the people on both sides effectively.

“Employment outlook of CPEC: A meta-analysis” research study shows that CPEC has generated 80,000 jobs so far in different projects commenced since 2013, and has a potential to create a total of 1.2 million direct jobs through its currently agreed projects.

Moreover, with the inclusion of new projects under the CPEC long-term plan in sectors like agriculture, tourism, mineral processing, oil and gas and services, the job portfolio is likely to be enhanced manifold.

Developing countries, on the other hand, are undergoing the phase to just identify the number of jobs which will be created in the near future rather than classifying the skills required.

This leads us to start from the first phase in order to illustrate and highlight the future of direct jobs in Pakistan while keeping in contrast the current market scenario.

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.

The study also claims that Navigant Consulting USA (2009) has estimated 5.10 Jobs per MW, while, in a recent study of ILO (2017) 4 direct jobs per MW have been estimated.

According to future job estimation of the Gilgit-Baltistan Government (GB-WAPDA), the Azad Jammu and Kashmir Government (AJK Hydro Electric Board) and the Private Power and infrastructure Board (PPIB), 11.66 Per/MW jobs are projected at construction phase and 3 jobs per/MW at Operation and Maintenance phase (O & M) (ILO-Pakistan, 2015).

These benchmarks suggest a number of 40,000 to 50,000 expected jobs through CPEC hydro power projects.

CPEC includes the Quaid-i-Azam Solar Park located in Bahawalpur, Punjab with a capacity of 1,000 MW, out of which 300 MW is in production.

According to the European Photovoltaic Industry Association (EPIA, 2017) PV module manufacturing creates 3-7 direct jobs and 12-20 indirect jobs per MW installed. Thus this facility has the potential of 7000 direct and 20000 indirect job creation.

EWEA report (2008) suggests that solar energy projects would require seven jobs/MW and has similar O&M job creation as that of coal and Hydroelectric projects. Four wind projects are underway with respect to CPEC energy projects, each of which is 50 MW.

The Global Wind Energy Council (2012) has estimated that the global average of employment generation is fourteen individuals per MW in one person year. This estimation includes component manufacturing, wind farm development, construction and maintenance, whereas in the operations and maintenance, the average employment generation is 0.33 Per MW per plant yearly.

Thus the number of direct job potential for CPEC wind is calculated as 2800 during CIM and 66 jobs per year during O & M phases. EWEA report (2008) suggests that wave energy projects would require 10 jobs/MW and has similar O&M job creation as that of coal and Hydroelectric projects.

Coal projects have a large share under CPEC energy projects with an estimated investment of $5.8 billion as a part of early harvest. Singh & Fehrs (2001) suggested that 0.18 employment production per MW is expected during the O & M phase from an average coal-fired power plant. In addition, immense jobs are created during the transportation of inputs and mining operations.

Despite the estimates of Sign & Fehrs (2001), the estimates calculated by the Coal Industry Advisory Board (2014) are relatively more recent, whereas an advanced 3960 megawatt (MW) coal project, the Ultra Mega Power Project (UMPP) is considered as a better source for future estimations.

According to this study, 1.26 & 0.16 direct jobs per MW are created during CIM and O&M phases respectively.