The China-Pakistan Economic Corridor (CPEC), initially hailed as a transformative project for Pakistan’s economy, has instead become a network of incomplete infrastructure and mounting debt issues, a report revealed. Termed as “CPEC 2.0” now, the project has fallen short of its strategic and economic goals, leading to growing frustrations on both sides. The original $62 billion CPEC plan included various developments like highways, power plants, rail infrastructure, and special economic zones across Pakistan.
The report highlights that the CPEC model’s focus on visible infrastructure over long-term economic sustainability was flawed from the start. While China provided significant financing and construction support, Pakistan lacked the necessary industrial ecosystem for sustainable economic growth. The implementation of Chinese-backed projects, particularly in the power sector, led to a debt crisis in Pakistan, with billions remaining unpaid to Chinese firms by 2025. This financial burden added to Pakistan’s economic challenges without addressing the underlying structural issues.
Despite creating infrastructure, CPEC failed to enhance Pakistan’s export competitiveness, leading to repayment difficulties. The report emphasizes the gap between construction and economic productivity as a core issue within the CPEC framework. Additionally, Gwadar, envisioned as a major commercial port, has not realized its potential due to various challenges. Security concerns have also escalated, with Chinese personnel facing increased risks from militant attacks, especially in Baluchistan.
