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South Korea in CPEC


2/7/2017

The China-Pakistan Economic Corridor (CPEC) offers huge business and investment opportunities to all countries and global institutions. Since the project was formally launched in April 2015, it has opened up multiple businesses in physical infrastructure, transportation, energy, and trade, and even more. The best opportunities exist for Pakistan’s investment partners.

China could motivate Hong Kong, Macau, and Taiwan to invest in the CPEC-related projects. In the Middle East, Saudi Arabia and the United Arab Emirates are traditional and sizeable investors in Pakistan. Both countries are part of the One Belt One Road (OBOR) and have special ties with Pakistan. They could play a significant role in CPEC investment. The United Kingdom, Germany, France, Turkey, Russia, Romania have joined the CPEC. Other investors from Europe such as Switzerland and Norway should also show interests in CPEC projects.

In East Asia, Japan is an investor in Pakistan, and in the past, it has played a pivotal role in investment in Pakistan especially in the auto sector in the 1990s. Since then, unfortunately Japan’s investments in Pakistan have rather declined. In the past decade, Japan did not invest for a variety of reasons, which need to be revived.

As Japan is a leader in investment in Asia, its participation in the CPEC-related business and investment would open many other windows for other investors. This would also revive traditional strong ties between Pakistan and Japan and would create a balanced view of Pakistan in East Asia instead of heavily leaning toward China for investment. A diversified investment policy of Pakistan would be more attractive for investors from East Asia and within the parameters of “Vision East Asia’’ policy adopted in 2004, but it largely remained inactive.

Pakistan cannot not afford to bypass South Korea in its CPEC vision. China came much later to construct the Gwadar Port in 2001. It was the South Korean multinational Daewoo, which offered loan of US$ 630 million and constructed Pakistan’s first limited access motorway between Lahore and Islamabad (M-2) from 1993-97.

It was a time when no donor, country or a global financial institution, was interested in that project. Pakistani economy was facing an economic crunch at that time and largely depended on donors. The first PML-N Government faced that hardship. The motorway contract was signed in 1992. The length of the project was 339 km. The construction of the project within five years, when four governments including two care-take government were changed, wrote history of speedy and exemplary projects in Pakistan. Motorway was the largest project built in Pakistan after Tarbela and Mangla dams in the 1960s. When the motorway was build in Pakistan, there was no vision of a motorway existed in South Asia and Central Asia. The motorway was a shining example of cooperation between Pakistan and the South Korean private sector.

In fact, CPEC vision was practically laid down by the Lahore-Islamabad motorway. The rest is an extension. Therefore, South Korea should take high stakes in CPEC projects especially in the field of motorways construction, tunnels, bridges, and transportation. The Lowari tunnel is another monument of South Korean infrastructural development in Pakistan. At the higher level, Pakistani leadership should invite South Korean multinational companies to take part in CPEC projects.

South Korea emerged as the second largest source of investment after the United States in Pakistan in 1994. The country was well competing with Japan at that time and laying infrastructural in Pakistan. South Korean role in public transportation was another hallmark for its business participation in Pakistan, which had transformed Pakistani transportation culture. At that point, Chinese investment was non-existent in Pakistan. South Korea opened up the real door for infrastructural development in Pakistan. Its role in Pakistan was commendable in the 1990s.

The sudden change of the government on 12 October 1999 was the main reason for the South Korean businessmen’s decline of interest in doing business and investment in Pakistan and, for long, they stayed at the bay and watched the situation. Since the country was returned to normal democracy in 2008 and the incumbent government attained many goals such as wiping out terrorism, improvement of law and order in Karachi, and a number of economic objectives that were achieved, this has paved the way for South Korean investors to come back to Pakistan again and participate in its economic turnaround.

An economically stable and politically sound Pakistan could attain many goals and attractive investors from East Asian countries. The CPEC is a window of economic operation to lure investors. The results are in the pipeline and hope the political climate will not be damaged by any misadventure as happened in the past when the motorway momentum was built in the 1990s. The CPEC gives a new breath to Pakistani economy.

Source: The Nation