INP-WealthPk
Pakistan Needs to Foster Green Growth Policies for SEZs
May 09, 2022
By Samia Khalid ISLAMABAD, May 09 (INP-WealthPK): Pakistan needs to foster green growth policies for the nine special economic zones (SEZs) being set up under the China-Pakistan Economic Corridor (CPEC) to ensure sustainable growth, reports WealthPK. The construction of the SEZs is meant to attract foreign direct investment, increase the country’s gross domestic product, create jobs, improve regional connectivity and stimulate exports. These SEZs are being executed under the second phase of the CPEC, which is a flagship programme of the Belt and Road Initiative (BRI). The multi-billion-dollar project’s second phase is centred on economic revitalisation after successfully completing the first-phase early harvest programmes. The SEZs are free-trade areas in a country, where the relevant laws are tailored in a way to attract both foreign and domestic investors by allowing certain tax exemptions. The experiences of SEZs vary in terms of speed and performance, but they are generally quite successful in stimulating a country’s economic growth. China has over 30 years of experience in developing SEZs, which have been playing an important role in its progress. It is rather focused on adopting economic and societal values for sustainable economic growth rather than following a development model that leads to ecological disasters. Foreign investment makes around 50% of the total investments in the SEZs in China. Pakistan is also making efforts to replicate the Chinese model. However, while it ensures that foreign investments make bulk of SEZ funding, Pakistan will also have to ensure that foreign investors do not crowd out smaller or local businesses from supply chains in SEZs. This can be best done by encouraging joint ventures between local and foreign investors. As the CPEC enters its second phase, Pakistan’s infrastructure planners have also renewed their commitment to environmental and social sustainability while stimulating industrialisation in order to comply with the Sustainable Development Goals of the United Nations, which call for enforcing best industrial practices to maintain environmental standards. Similarly, the long-term strategic framework of the Asian Development Bank (ADB) emphasises environmentally sustainable growth. It calls for incorporating environmental considerations into the country’s policies and investment programmes by building capacity of public sector institutions in legal, regulatory and enforcement frameworks. The ADB framework emphasises the need to identify the key success factors in new industrial and economic dynamics. As the Global Climate Risk Index has assessed Pakistan as the world’s fifth most vulnerable country to climate change in 2020, it is important for the authorities to ensure a ‘greener’ CPEC. Keeping in view these challenges, the government is trying to strike a balance between resolving the immediate economic problems of people and ensuring that industrialisation does not lead to environmental degradation. Moreover, Pakistan has also pledged to move towards renewable energy by exploiting its solar, wind and hydro potential. Alongside, the government has also launched large-scale afforestation initiatives as well as sustainable waste management and conservation programmes to address the environmental issues arising out of development of SEZs.
