CPEC and Global Corridors: An Analytical Framework for Pakistan

The program of CPEC is the talk of the town as it is the landmark cooperation for the economy of Pakistan. It is the evidence of strong China-Pakistan friendship but it may test this friendship as Pakistan is going through difficult economic phase. The program encounters a vogue of debate since its inauguration due to its opportunities and associated risks. This study is an attempt to figure out a global perspective of corridors and the differences and similarities of CPEC with these global corridors. We have taken various corridors from Asia, Africa and Europe and highlighted the challenges and policy interventions of the respective corridors. This exercise allows the study to develop an analytical framework to introduce relevant soft interventions at different stages of long-term plan of CPEC.

. Evolution of a Transport Corridor into Economic Corridor; Adapted from (Hope & Cox, 2015) The evolution of a corridor follows a pre-determined process as it ultimately develops into economic corridor for most of the times as it is elucidated in figure 1. The figure shows that a transport corridor initiates with feasibility studies and conception of integration and results in improvement in basic infrastructure such as roads, port and highways. Latterly, improvement in hard infrastructure transforms the model in to a multi-modal transport corridor while soft infrastructure (logistics and institutions) develops it into a logistics corridor to maintain the efficiency with the passage of time. There exists an inseparable boundary between transport and economic growth as transport routes connect economic hubs within and across economies. Hence, a transport is a cluster of economically significant areas and specifically industrial one (De & Iyengar, 2014).
An upgraded system of infrastructure also enhances living standard and reduces poverty by linking distant/remote places with economic hubs and markets bridging the development gap among the regions and provinces . Initially, the effects are prominent in the focal areas of the corridor and subsequently growth and connectivity surges investment in other regions of the economy. However, this significant association requires a planning mechanism for multi-objective decision making (Cobacho, Caballero, Gonzalez, & Molina, 2010) such as improvements in soft infrastructure intervention, legislation and proficiency in customs procedures, and harmonization of policies between the economies of the corridor.

China Pakistan Economic Corridor (CPEC)
CPEC is an outline of regional connectivity. It is not only a joint venture of China and Pakistan but will also ensure positive outcomes for the region including the economies of Afghanistan, Central Asian Republic, India and Iran (Butt & Butt, 2015). The project will enhance the regional connectivity with improvement in physical infrastructure such as road, rail and air. Meanwhile, soft infrastructure initiatives will also enhance the transportation mechanism and exchange across borders. Undoubtedly, the project also has the scope for growth and social connectivity as it also undertakes various academic and cultural programs for better transformation of knowledge in the region. All the patrons of the CPEC consider it a milestone for achieving more flow of trade and business due to production and movement of energy (Miller, 2017). Therefore, win-win model of CPEC ensures more optimal businesses and enhancement of co-operation between China and Pakistan.
The vision of CPEC stimulates economic growth, bilateral relations and construction, exploring potential investment opportunities, trade, logistics, and cultural connectivity in the region. Moreover, collaborations between Pakistani and Chinese companies for energy projects, set up of export processing zones (EPZ) and industrial parks, tourism, agricultural growth, cultural exposures, poverty alleviation, and human resource development are the pivotal segments of the program.

Objective of the Study
The objective of this study is to figure out that comparison of CPEC with other economic corridors and come up with analytical framework. Whether the idea of corridor can be applied effectively to unlock the unrealized potential of China-Pakistan Economic Corridor (CPEC) in Pakistan. In this regard, we compare the case studies of other economic corridors with CPEC and extracted some useful similarities and dissimilarities. In broader terms, this allows to incorporate some effective policy interventions for transformative investments of CPEC in developing and emerging the economy of Pakistan. Meanwhile, we develop an analytical framework of CPEC Economic corridor (economic acticity promoting regional integration) based on the body of knowledge extracted from case studies of diverse global corridors. The novelty of the study is that this study aims to fill a gap in the policy initiative for CPEC by performing a mapping exercise of global corridors. More specifically, the study proceeds to identify the detail, vision, strategic upthrust, challenges and implemented policies of corridors to embed a successful transformation of CPEC as an opportunity for Pakistan given the fact that program is still in debate for its declaration as opportunity or threat (http://cpec.gov.pk/, 2018).

Mapping Exercise for Corridors
In order to understand CPEC in an extensive context, it is essential to map various global corridors as we believe that it is an instrument to create understanding the economic integration and accessibility objectives of CPEC. We first perform mapping exercise of corridors accompanied by a snapshot of the details of the corridors. Over 25 corridors have been mapped out and detailed matrix of regional corridors provides the relevant information.
To analyze the understanding of the possible rationale of these corridors the mapping of corridors considering the theme, objectives and strategic upthrust is discussed with an assessment of the economic and policy environment in which they take place.
The mapping of corridors is followed by the following selection criteria.  The achievement of economic integration is a sine qua non condition.  The timeline of the corridor is taken into consideration as the longer time span of the corridor is preferred for the analysis.  An inclination is also expressed for a diversity of corridors rather focusing only on economic corridors.  The selection of corridors is also based on some related similarities and differences so that we can perform a comparison between CPEC and other corridors in the world to avoid mitigating effects.

Mapping of Asian Corridors
The development of Asia has been an interesting experience from both national and regional point of view (ADB, 2015). There are variety of corridors such as development corridors, trade and transport corridors, industrial corridors, and economic corridors to develop regional connectivity and integration. Out of 18 Asian corridors, only 5 have been selected. These include three transports cum economic corridors of Great Mekong Sub-region (GMS), Sabah Development Corridor (SDC) and Delhi-Mumbai Industrial Corridor (DMIC). It is pertinent to mention here that the selected corridors were designed to move progressively through physical infrastructure to economic corridor. Essentially, this will ensure wider economic benefits as these corridors have the potential to accelerate investment opportunities and economic activity including the marginalized areas along the region (Banomyomg, 2008).

Great Mekong Sub-Region (GMS) Corridors
Great Mekong Sub-Region (GMS) Corridors is a regional corridor initiative which intends to transform its nine transport corridors into three economic corridors. These three include East-West Economic Corridor (EWEC), North-South Economic Corridor (NSEC) and Southern Economic Corridor (SEC). These are selected for being the earliest, most comprehensive and most advanced corridor in Asia.

Sabah Development Corridor (SDC)
The Sabah Development Corridor (SDC) is a regional development corridor initiative that took place in Malaysia. This case has been chosen for being the most ambitious project having a large component of state development and for implanting the promotion of industrial clusters and special economic zones.

Delhi-Mumbai Industrial Corridor (DMIC)
The Delhi-Mumbai Industrial Corridor (DMIC) is an inspirational and crowd-pleasing initiative of India to promote "Make in India" initiative and business facilitation. The project intends to define the region as investment hub with major focus on planned urbanization and freight movement and thus attracts us to include it in the case studies.

Mapping of African Corridors
The improvised yet resource-based continent of Africa requires an industrial development initiative to eradicate poverty and achieve sustainable growth. This requires a resource-based industrialization policy framework rooted to catalyze the growth of potential economies in Africa. There are several economies in Africa that are involved in crafting credible projects to achieve economic stability and prosperity (Mulenga, 2013). The detail matrix of the identified corridors is presented in table 2. Maputo Development Corridor (MDC) is a trade and transport corridor supported by the governments of South Africa (SA) and Mozambican. The MDC offers a shortest route of rail and road between Gauteng and Mpumalanga provinces of SA and connects Gaborone (Botswana) and deep-water port in Maputo. Furthermore, the private sector is responsible to ensure the full potential of MDC.

Mapping of European Corridors
The detail matrix of European corridors (table 3) reveals that there are some emerging corridor projects that foster integration and transport advancements. Precisely corridors in Europe are aimed at promoting clean fuel policies for innovative transport solutions. Moreover, removal of bottlenecks, identification of missing crosses border links; and promotion of interoperability and integration are also significant in this regard. For further analysis we discuss two initiatives out of four identified corridors.

Baltic-Adriatic Corridor
Baltic-Adriatic Corridor is a significant axis of European road and railway. The industrialized areas are central to link the Baltic with Adriatic Sea between Southern Poland and Northern Italy. It is a work in progress comprising projects of railway routes in Austria and other cross border economies (Wendt & Wiskulski, 2012). 2.3.2 South East Transport Axis (SETA) South East Transport Axis (SETA) is a trade and transport corridor for better accessibility in South East Europe. The corridor basically revolves around the concept of "Green Corridor"to ensure environment friendly freight between Central and South East European regions. Moreover, to improve the infrastructure facilities the corridor looks for more access to alternate financing options within the partner regions.
The detailed matrix of corridors revealed that regional differences are vibrant among these corridors based on geographical significance, theme of the corridor, destination and covered length involvement of patron and conveners for better connectivity and regional integration.

CPEC and Global Corridors
This section briefly investigates that how CPEC is similar the international corridors and meanwhile, what are the key factors that differentiate the project of CPEC from other corridors in Asia, Africa and Europe.   Table 4 summarizes various transport modes of the corridors. The tables show that almost every corridor including CPEC covers road and port of the host country while other modes-railway; air, utilities and pipelines are also part of these corridors. This highlights the argument given by (Coşar & Demir, 2016) that poor quality of transport infrastructure in developing economies is the key impediment in accessing international access to international markets.

Source: Compiled by Authors
Furthermore, inclusion of ports in a corridor highlights the strategic significance of ports especially for the land locked areas (Terrill, 2018). It is also similar for CPEC as Pakistan is going to facilitate China by providing the port services through Gawadar port for their western China region. Turning to the case of Africa, it is obvious that poor infrastructure demands more roads and railway tracks. Instead of relying on roads and port, European corridors are more inclined towards market diversification and thus development of railway and other alternative transport mode (Martín, 2011). CPEC also include projects to improve the existing infrastructure and railway network and intends to further diversify it in future.  Table 5 explains the respective vision and strategic upthrust of CPEC and other corridors. This matrix basically assesses to figure out the similarities and differences between CPEC and other corridors in Asia.

Source: Compiled by Authors
Nearly all corridors possess similar objectives same as CPEC. These include enhancing regional connectivity, infrastructure development; trade facilitation; poverty reduction and social and cultural integration and so on. (Roberts, Melecky, Bougna, & Xu, 2018) However, it is pertinent to mention here that theses corridors seek different goals than CPEC.
For instance, EWEC is more oriented towards social and environmental sustainability and empowerment of private sector. The Vizag-Chennai Industrial Corridor (VCIC) is a project to be started soon, stresses on more access to international markets at provincial level (ADB, 2015).
In the short-run, there is no any significant initiative under CPEC offering institutional capacity, provision of stable environment to businessmen for more investments, synchronized industrial and urban settlements, institutional framework for implementation, social and environmental sustainability and empowerment of private sector. All these aspects create challenges for the success of CPEC in Pakistan. It is observed that while establishing economic corridors, the success of corridor closely depends on policy reform, capacity development, and the strengthening of institutions (De & Iyengar, 2014). Table 6 reveals that the continent of Africa is more interested in developing trade and transport corridor as the infrastructure facilities in Africa are not only poor but also the region is lagged behind in terms of trade and regional connectivity. These characteristics of African corridors are in in line with CPEC. However, CPEC is different in a sense that African corridors are developed to utilize the idle natural resources for the development of the economies while there no such intuition in case of CPEC. The African corridors heavily rely unlocking its mining and agriculture potential such as Trans Kalahari Corridor (TKC) and Zambezi Valley Development Corridor (ZVDC). Despite the fact that Pakistan is enriched with natural resources and agricultural potential, there is yet no project in CPEC to develop the natural resources and agriculture sectors of Pakistan. However long-term plan of CEPC reflects development of agriculture and natural resources clusters of Pakistan.

CPEC and European Corridors
The vision of CPEC and European corridors revolves around strengthening economic relations, trade and transport in the region. In Europe, the European Union (EU) is seeking to enter new markets offering the EU a renewed economic influence in the region. Therefore, the corridors in Europe are intended to develop more cooperation, low freight costs and promotion of knowledge based economies. This is the main thing that differentiates CPEC from European corridors. The current projects included in CPEC cover only cross-border trade between China and Pakistan. New markets and regions for connectivity under CPEC are yet to be explored in terms of trade and market diversification for Pakistan. Meanwhile, the international lobby of USA, India and Afghanistan is persistently opposing the project of CPEC blocking the economic integration perspective of CPEC (Abid & Ashfaq, 2015). Table 8 provides a brief view of the policy interventions in Asia to cope with the challenges faced by the management authorities of the corridor. Despite the fact that most part of the EWEC has been completed, the project is unable to form an integrated immigration and customs network from India to Vietnam. Meanwhile, the cross border issues still hinder to achieve the goal of regional connectivity to the distinct nodes of corridor. These issues are being tried to resolve by the elimination of tariff and non-tariff barriers, provision of visas and simplification of logistic services.

Policy Interventions of Selected Asian Corridors
The NSEC is a project in progress and follows NSEC Action plan. There were 75 subsidiary projects of which 35 had been completed, 19 were ongoing and 21 were pending as of March 2015. The pending projects were mostly in rail transport, investment promotion and facilitation, and capacity building and institutional development. High business cost and the lack of standardized and harmonized border and transit trade procedures is the weakest link in the NSEC sub corridors The Strategy and Action Plan (SAP) of SEC suggests various policy interventions that are discussed in table 3. The plan basically supports the participation of the private sector and public-private ventures to make infrastructure projects more attractive to the private sector. Therefore, the SEC authorities are more concerned towards mitigating the commercial and sovereign risks of investors. In this regard, a more genuine and encouraging business environment is important.
Despite the fact that SDC is a public-private initiative, the authorities of SDC are striving to cope with the concerns of investors. Investors require a security for their investment in long run due to an expected and uneven increase in the cost of business. Therefore, the SDC implementation authority has offered equity participation and loan funding.
The DMIC includes huge projects and processes deep impacts on multiple stakeholders. However, there is a bundle of issues with the projects as abandoned power projects, slow pace of project and weak corridor nodes. These impediments arise due to lack of consultation with elected bodies, society groups and elected bodies and weak policy structure of the corridor.

Policy Interventions of Selected African Corridors
The potential impediments inhibited by the TKC may hinder the corridor to transform in to economic corridor. Theses include a set social obstacle, infrastructure issues and financial impediments. Table 4 illustrates a brief view of these sets. These setbacks were addressed by the proposed dry port initiative that may facilitate in storage of goods and decrease transportation cost. It will also transit time for the transporting of the goods. These facilities can offer various benefits to the system of importing and exporting, as one can be strategically located in a border area so that it is accessible by both countries without having to undergo border processing. The MDC is regarded as a successful initiative, yet, there still exists some specified operational setbacks of the project. These include failure in providing adequate rail services, environmental concerns, investments, government issues, unsatisfactory progress and environmental issues as it is shown in table 5. Maputo corridor possesses strong PPP and the government of both countries monitors it.
It is worth mentioning that the role of African Development Bank (AfDB) is commendable as the bank is striving to use economic corridors as a strategy for regional integration under the Action Plan for the Acceleration of Industrialization. The plan underlined the promotion of economic or development corridors and other Spatial Development Initiatives (SDIs) to focus on resource based anchor investments for infrastructure interventions in association with business linkages to SMEs.

Policy Interventions of Selected European Corridors
Despite the fact that BAC shows impressive outcomes, the patrons of corridor are unable to cannibalize the existing business. This shows scant interest in providing new and better transport facilities. Furthermore, private sector participation is still limited. Turning to the logistics facilities, lack of mutual consent of drivers is also a major constraint. Besides this, high fuel costs due to legal constraints are also fuelling up the costs of the corridor.

Source: Compiled by Authors
The SETA corridor is a road-rail initiative to ensure more accessibility to other global markets and thus requires high speed transport modes. However, time consuming document procedures are the key constraints in providing competitive and fast rail connections for passengers and freight transport. Meanwhile, lack of the harmonization and coordination between authorities is also the challenge. We are interested here to figure out the challenges faced by the authorities of a corridor and how they fixed these issues. This may assess to prescribe some tangible soft policy interventions to develop a concrete analytical framework for CPEC in Pakistan.

Analytical Framework for CPEC
Since its inauguration, CPEC has been a talk of the town due to geopolitical and strategic opportunities and risks, fetters of geographical factors and restraints to economic growth projections. Therefore, the long-term plan of CPEC is announced to deal with the concerns of the relevant stakeholders.
The short-term plan of CPE includes the completion of transport an energy projects by 2020 removing the major bottlenecks restraining socio-economic development of Pakistan. Considering the medium term objectives, the project utilizes the infrastructure to develop the industrial set up in Pakistan. This includes completion of nine Special Economic Zones (SEZs) for balanced economic growth. It is proposed that given the accomplishment of short and medium term objectives, the project of CPEC will be completed by 2030. The long term plan of CPEC includes entire completion of the project with sustainable growth and taking CPEC further to connect with economic development of Central Asia and South Asia making the region an international economic zone.
Currently, the program is heading towards its medium term projects that are related to infrastructure, energy and connectivity. However, given the customary and institutional arrangements (bureaucratic delays, in availability of authentic information) the project does not seem to meet its targets on time.
Considering the energy targets of CPEC, in a time span of four years (2015-18) a significant contribution of CPEC is the enhancement of 10,000 megawatt energy capacity in Pakistan. This capacity is sufficient enough to overcome the chronic energy shortfalls by enhancing the plant efficiency from 28 percent to 61 percent. This would definitely bring down the cost to domestic consumers. However, this additional capacity has nothing to do for consumers, as this power capacity is not much helpful as government of Pakistan has not been able to enhance transmission and distribution capacity. Hence, distribution delays and delay in paying dues have exerted massive push on public expenditures and will further escalate subsidies in absence of institutional reforms (Cobacho, Caballero, Gonzalez, & Molina, 2010).
The second important area is the construction sector that also includes infrastructure development and construction of new highways/motorways and railway links from Gwadar to Kashgar and the Mass Transit systems within big cities. Undoubtedly, this upgradation and rehabilitation process would provide relieve to domestic producers from high cost transportation through trucking fleet but would also facilitate the lower income group due to reduced travel time and savings in transportation expenses.
The achievement of medium term goals of CPEC includes the improvement in livehood of people along the CPEC route. It is expected that the regressive districts of Balochistan and Khyber Pakhtunkhwa (Southern) would be facilitated more by the western route of CPEC as the route will assess the community to link up with the other national markets. The benefits to these communities include increase in yield and selling of their products (mining, livestock and poultry, horticulture (mining, livestock and poultry, horticulture, fisheries ), set up of cool chains and warehousing facilities, easy processing at adjoined processing zones, access to trucking fleet and containers and installments of fibre optic networks to these deprives districts. All these benefits are attributed to the basic facilities of education, heath, drinking water, and training. However, still no project of these facilities has been initiated in Balochistan. If we associate these facilities with the establishment of industrial zones then here a question arises that how the communities would get benefit from such zones. This may create resentment that the benefits are not accruing to the people at large in these districts/geographic areas.
Nonetheless, investment in infrastructure expands the road structure in a developing economy that would assess firms to expand exports. This would surge the sales of the firms leading more jobs in the economy. However, the compliance of this proposition with reality is still unknown (Martincus, Carballo, & Cusolito, 2017). Considering labor market prospects of CPEC, according to the recent study by CPEC Centre of Excellence, the project has the potential to generate job opportunities for I.2 million workers including various initiatives of infrastructure, energy, and industrial collaboration and Gwadar port development. The study revealed that skilled staff required for these projects include electrical and communication engineers, project managers, signal support staff, communication engineers, and civil and electrician engineers. The availability of this type of labor in the deprived areas of the project is another debate as labor from other part of the country will demand more wages and thus this would create more burdens on the cost of the projects. Some economists have also argued the benefits to local labor as they feel that most of the projects employ Chinese labor in big numbers.
Despite the fact that Pakistan is an agriculture economy, there is still an uncertainty in farmers of Pakistan for lack of information regarding that what would they have to expect from CPEC. Meanwhile, due to increased transportation links and low tariffs Chinese products are already found in Pakistani markets and competing with locally grown produce. Although, Chinese investment might be considered as remedy for some of the impediments for the agriculture sector such as water scarcity, energy shortages, and poor post-harvest infrastructure yet, no public debates have been held on CPEC in this regard.
Given the above scenario, we develop an analytical framework that takes into account the each plan of CPEC and suggests relevant soft policy interventions. Soft interventions are basically policy measures that are designed to build the capacity of the economy and require relatively more financial assistance to improve institutions and capacities (Galvez Nogales, 2014). Considering the corridors, these include multidimensional aspects such as training and development, transport facilitation, management of natural resources and so on.
In figure 2, it is evident that initially the CPEC is a hard infrastructure intervention in short term which concurrently ensures infrastructure development. Thus, it requires a disciplined and comprehensive approach to achieve growth, competitiveness and regional development.  The transport development of the corridor requires the support of logistic industry with relevant policy interventions. These include simple procedures for trade, economies of scale to support the low-cost business at global level, investments in specific logistics businesses (such as cool chain, trucking chain and warehousing) and strategic cooperation between public and private sector for new logistics solutions (Banomyomg, 2008;Banerjee, 2017;Aqeel, 2016).
Meanwhile, the distribution of power of must also be initiated to facilitate the highly affected business sector in Pakistan. At this stage, government support for domestic producers, specifically Small and medium Enterprises (SMEs) will regain the confidence of domestic producers through the provision of infrastructure, power, and a range of services and incentives in terms of business plans and Joint Ventures (JVs) with China. Agriculture is the relevant but neglected sector and a weak part of the CPEC and thus inclusion of agriculture marketing. It is expected that collaboration of these initiatives would foster the outcomes of the short period and accelerates the development of the medium-term plan.
The long-term plan of CPEC is a broader context of the national development as by the end of this stage nine SEZs in Pakistan would start functioning in Pakistan. The significance of (SEZs) is crucial for productive and efficient utilization of industry output. (Ishida, 2009) Yet, completion of these SEZs is not sufficient enough to achieve the medium-term goals. The success of these SEZs rely on the capacity building and human capital development through skills development and training program in the areas of the project as this will also benefit the derived communities along the route of CPEC. Besides this, the issue of capacity and capital deficiency can be amended through again with JVs with China (Munnell, 1992).The involvement of the business community in the project is thus highly recommended to unlock the potential of CPEC. Furthermore, as the project is supposed to be entering in its completion stage in 2030, the program will face new challenges of cross-border transactions and legal procedures.
These can be resolved by introducing institutional strengthening for trade and cross border issues and financial and risk management are required to deal with the financial dynamics between China and Pakistan. An increase in institutional competences ensures effectiveness of government policy that particularly fosters the development process through infrastructure development (Esfahani & Ramıŕez, 2003).
According to Younis (2014), the growth outcomes of CPEC in short term and long term plans may differ. Still, CPEC is a milestone for the economy of Pakistan the problems of project stem from impervious policy interventions, lack of information and the failure of government of Pakistan to heed local and regional concerns. The long-term plan of CPEC (2017-2030) has shown no input in clearing the doubt of the public. We have also felt the plan is formulated without addressing the concerns of business community and local civil society and thus the anti-CPEC debate still goes on.

Conclusion
The analysis of global corridors highlights the fact that corridors are present in every part of world. From the advanced economic centers of Europe, China and Indian sub-confinement to the developing and less prosperous regions of the Asia Minor and sub-Saharan Africa. The international nature of these corridors underscores their importance to regional trade integration.
Moreover, the analysis of global corridors provides useful insights for this study. First, the analysis of these corridors ended up on a conclusion that all corridors intend to transform in to an economic corridor. Second, the completion of corridor does not ensure economic development and regional integration due to divergent national and cross border bottlenecks that vary from region to region (Esteban, 2016). Third, these case studies are helpful in formulating an analytical framework for CPEC to provide some practical policy interventions for the success of CPEC.
CPEC is a journey towards industrialization and economic regionalization in the globalized world following peace, progress and win-win approach. Considering the economic implications of CPEC it will lead to infrastructure development, job creation, increase in business opportunities with trade facilitation and recommencement of economic growth. Pakistan is required to address major bottlenecks to sustain its credibility to China and meanwhile to people of Pakistan for growth momentum of the project. A well synchronization and timely completion of projects of infrastructure, energy may assess to reduce the governance and administration paucities. The unhinged socio-economic development and external sector susceptibilities also need to be monitored to avoid any possible challenges to CPEC.
Additionally, each stage of CPEC requires divergent policy interventions. The core element of these interventions is to bring the relevant policy at the right time. CPEC will foster economic activities along a transport a route with holistic and multisectoral approach.
Economic corridor stimulates regional integration and trade and it is indeed a common tool for development, yet, when it fails to produce the proposed economic benefits, it would be then considered as an unbalanced investment (Melecky, 2017). Hence, the improvements in infrastructure arrangements in Pakistan require a harmonized customs measures and regulatory module of other involved authorities (Vaqar & Ghulam, 2011).