ISLAMABAD: Minister for Planning, Development and Reforms Prof.Ahsan Iqbal has said that China-Pakistan Economic Corridor (CPEC) Pakistan’s Vision 2025 seeks to position itself from a lower middle income country to high middle income country by achieving the target per capita GDP of $4200.
“In order to achieve this goal and create employment opportunities for new entrants into the labor force, it aims to target a growth rate of 8 percent between 2018 and 2025 with single digit inflation”, he said while addressing the think tank of China at Pak-China Joint Cooperation Committee (JCC) on CPEC in Beijing today.
According to a message received here from China today ,Prof.Iqbal who is currently visiting the country said that the Vision has other macroeconomic targets as well.
He further said that “Vision 2025 seeks to increase exports from the present $25 billion to $150 billion, tax-GDP ratio to 16-18 percent, investment rate in the range of 22-25 percent of GDP through domestic saving of 18-21 percent and foreign saving of 3-4 percent of GDP in the long run”.
The Minister for Planning said that year 2015 has been termed “by us as the Year of Friendly Exchanges between China and Pakistan and this year of the sheep will also stand and prove to be a year of promise and prosperity for deepening cooperation between our two brotherly countries China and Pakistan”.
Highlighting the CPEC, he said that the Corridor is a fusion of multiple developments in the global, regional, bilateral and domestic contexts.
The ultimate objective is peace, prosperity and well being of the people of the two countries, the region and the world, he remarked.
Prof-Iqbal said that the global economic landscape has changed dramatically.
The main drivers of this change, he said has been technology, trade liberalization, freer capital movements, advances in communication and transportation infrastructure and creation of cross border supply chains.
The centre of gravity of the world economy, he said has shifted east with the emerging economies growing at a much faster pace than the developed economies.
Prof.Iqbal said that their share of GDP doubled in the last 50 years or so. In the last decade 70 percent of global growth is ascribed to the emerging economies.
These shifts, he said find reflection in changes in global governance and responsibilities that arise from these shifts.
“The integration of the global economy has enveloped all areas of trade, service and movement of capital.
Regional cooperation agreements have proliferated and strengthened in recent times to capture this change especially in the global economic landscape”, he remarked.
The Minister said that regional and sub regional economic integration as a means to bolster growth, investment and trade in countries has a long chequered history. However, recent history of regional economic integration has had some unmistakeable successes.
“In fact this has been one of the major successful developments after the Second World War. The regional integration in Europe brought success in terms of regional growth, economic development, investment & trade and more importantly fostered peace in the region”, he added.
The interest in regional integration in Asia, he said has taken root more slowly but recent developments have intensified interest in Asian regional economic integration.First,he said is being projected that the Asia and Pacific region’s share in world GDP between 2010 and 2050 would rise from nearly 28 to more than 52 percent, with China accounting for 20 percent and India for 16 percent both neighbouring Pakistan-in manufacturing China is already producing 25 percent of global manufacturing output.
Second, he said complementary to the first is the faster economic growth in the region and its intra regional trade than the rest of the world-trends that are likely to continue- Asia today is already producing 46.5 percent of global manufacturing output.
Third, he said the imbalance in world trade is creating an environment for greater domestic and regional investment by trade surplus countries, which are countries in Asia, providing an opportunity to relatively slower growing and investment deficit countries to attract FDI and raise their growth levels.
Fourth, he said the region includes both energy importing and energy exporting countries and thus providing room for cross border trade in energy products; fifth, regional economic integration increases efficiencies in production especially in products with value chains spread across the region because of proximity and thus reduced connectivity costs.
Sixth, he said that after the recent economic and financial crises in the west there has been strengthening of the belief that Asian economic integration would make for more resilient economies to external shocks- a belief earlier fostered during the 1998-99 crises.