The article in non-Asian entities would particularly need to be read in the context of almost perennial hostile relations prevailing between India and Pakistan since independence from colonial rule in 1947. Britain gave up this rich colony to avert the replay of events that occurred to some other European powers while leaving their African colonies in blood of the natives and considerably bruised themselves.
Britain left in haste, leaving many thorny territorial division issues between India and Pakistan unresolved, ‘Kashmir’ the major one. The state had predominantly Muslim population but a Hindu chieftain ruled it. There have been military conflicts of varying intensity between India and Pakistan in 1948, 1965 and 1971, the last being more devastating for Pakistan when India also helped public revolt against Pakistan by launching full-fledged military offensives and its eastern wing, erstwhile ‘East Pakistan’ was clipped that emerged as Bangladesh. Thus, the hostility simmers, forcing both the countries to maintain large standing armies as of operational necessity. India and Pakistan now possess nuclear weapons, which means looming war scenario, has an added dangerous dimension to it. Some major powers and the beneficiaries are happy with threatening status quo in Kashmir.
The simmering hostility nourishes their national interests perhaps better than the resolved conflict would do. Hence, no effective arbitration has been attempted ever by any power or organization except UN in early years of their inception by adopting Resolutions 38(1948) and 47(1948), which recognized Kashmiris right to choose between India and Pakistan through a plebiscite. India concurred initially but later backtracked. Tragedy of the time is that the Subcontinent remains prone to a horrific nuclear conflagration, possibly at the cost of world peace. (Assume the views expressed below are of author’s and may not be construed as of the publishing source or Pak Army).
“I disapprove of what you say, but I will defend to the death your right to say it.”
Indian Military ‘Cold Start Doctrine’ (CSD) for war surfaces occasionally in Indian and Pakistani media as an unexplored paradigm. The opinion makers enjoy Voltaire’s philosophy support across the board, that in the third millennium globalized world politics, has become synonymous to the ‘Controversy Theory’ which allows the scholars perceptional as well as approach variations while evaluating any concept, doctrine or theory. Even Voltaire was not spared by ‘controversy’. While it is usual to attribute the above quote, for instance, to Voltaire, there is considerable evidence that in fact Evelyn Beatrice Hall wrote it in her ‘The Friends of Voltaire’ under a pen name, Stephen G. Tallentyre.
CSD is very high-sounding concept with its compulsory corollary ambiguity and those not possessing deep insight to the operational methodology tend to bolster its psychological fall out on the Pakistani readership, which is the only significant gain so far for India. Wittingly or unwittingly, its interpretation through plethora of contemporary theories projects it like an intricate myth if not monster. At times, it virtually appears that the war would flash like a bolt that would mince Pakistan’s military retaliatory capability to the dust unless some big ‘ifs’ were not resolved by Pak Army. It is therefore pertinent to put the threat, haunting world peace in real perspective that had a brush with almost an imminent nuclear conflict in early 2002.
The roots of CSD like doctrine were nourished more by the unbridled euphoria of a maverick Indian Army Chief than by operational necessity. General Krishnaswamy Sundarrajan, besides being an architect of several brilliant episodes as well as reverses, was perceived by Indians to have carried a feather in his cap called Operation Brasstacks. Commencing in July 1986 as a war game, it developed into an ever-biggest exercise in Asia when air, artillery, armor and mechanized formations’ ‘blitzkrieg-like’ integrated deep offensive strategy was tested. The much-trumpeted exercise reached its crescendo in December 1986, employing three strike corps (I Corps-Mathura, II Corps-Ambala and XXI Corps-Bhopal) along Indo-Pak southeastern borders but to the misfortune of Indian Chief, Pakistan had shrewder military strategist, General Zia-ul-Haq who lie in wait to let Indian Chief put all his eggs in one basket, Rajasthan. Before he went with broad smile to launch cricket diplomacy in India, he ordered his Army reserves in the North to sally unobtrusively from army garrisons by the time Sundarji (Indian Chief’s short name) had achieved optimum assembly of forces comprising nine divisions excluding the holding corps, in Rajasthan. It was fantastic move by Pak Army and a masterpiece work of ISI and military intelligence outfits. Soon in Pak Army GHQ, heap of signal interception reports (sinrep) indicated that scramble back from Rajasthan to their original battle locations was ordered to all the Brasstacks forces immediately. When a formation complained of lack of transport, a sinrep indicated, it received prompt advice to use all mobility means, even obsolete like bull carts. Thus some young Pakistani officers, referred to ‘Operation Brasstacks’ in light vein as ‘Operation Bull Carts’. Sundarji’s dream of flashing saber like masterstroke to cut Pakistan into two halves simply crashed in the sand dunes that he had nurtured all along to eliminate status quo in operational equation between India and Pakistan prevailing since 1947. Thanks to Rajiv Gandhi, Indian Prime Minister who rescued Sundarji by agreeing with Gen Zia-ul-Haq to de-escalate the conflict in February 1987. Later Sundarji candidly admitted his failure, saying, he had over reached with Brasstacks. Not many people know the severity of dilemma Indian Army intended to create in the region and the reverses it faced in the process.
Briefly, one would put here the heightened concern for lack of strategic equivalence between the forces system of the two countries to rest by maintaining that it cannot be achieved in number game, as Pak Army is in comfortable position without it vis-à-vis country’s weak economy. Jonathan Marcus, a BBC defense correspondent had also observed in 2003, “In straight numerical terms of population, economic might, military manpower and equipment it is almost meaningless to speak about an India-Pakistan balance”. Nevertheless, through persistent sharp scrutiny of Indian Army doctrines that are ‘war-gamed’ by Pakistan without laxity ever and her expansion as well as modernization, Pak Army has taken some potent measures by regrouping, modernizing and at times resorting to modest new raising of forces level to keep adversary’s hostile designs in effective check. Strategic imbalance, for several reasons, would remain Pak Army’s perennial friend and it has to coexist with it. Pak Army has some spare arrows in the bow to act as force multipliers in the power game like its ever readiness to counter war as a cherished ideological duty, conventional or nuclear if it is thrust upon it and exploiting geo-strategic advantage that geography renders it. Pak Army is in position to deploy and employ holding corps as well as reserves in a manner that achieves effective counter level, yet with remarkable economy of effort. It has overwhelming edge in time and space factor and hence expeditious assembly of forces and convenient readjustment of the forces posture is possible if a hypothesis unfolds, other than the one on which defensive/offensive maneuver is mounted. Thus, its strategic orientation remains superior, allowing it to operate on interior lines, an advantage that Indian army cannot achieve.
Instead, India has to maintain Eastern Command far away for Chinese and Bangladesh borders as well as Northern Command for Chinese border and Pakistan Northern Areas/Line of Control. Western, Southern and South Western Commands remain poised against international borders with Pakistan while Central Command is in the depth at Lucknow because it has to meet certain operational contingencies in different directions. On achieving credible nuclear deterrence, Pakistan stands compensated for Indian preponderance in the conventional forces ratio while Indian nuclear claw has also been defanged that she would have been rattling on Pakistan every now and then. In fact, Sundarji’s venture of 1986-87, in all probability was driven by such hypothesis that Pakistan would resort to ‘diplomacy’ means only to de-escalate once haunted by the specter of Indian nuclear force projections and not confront India by mobilizing its holding or punch formations for war. Their hypothesis was way off the mark.
Despite such reverses, however, the flare for concept of simultaneity, targeting more than one objective at a time, lightening strikes against deep objectives in a theatre and destruction of Pakistan Army lingered on among Sundarji’s subordinates. On the contrary, three years of evaluation of Sundarji’s finesse enabled Pak Army to further fine tune its offensive as well as defensive plans. Not content with it, General Mirza Aslam Beg, Pak Army Chief, kicked off yet another mega exercise, ‘Zarb-e-Momin’ (Stroke of a Believer) in 1989 in Central Punjab that the world rated as the beginning of Pakistan Army ‘glasnost’ ensuring that posture-balance was maintained to preempt any mischief from the adversary.
Foxland and Blueland wrestled for several weeks at the final stages of exercise with troops. Chief Control HQ at Sargodha, assisted by Blueland and Foxland Senior Controls, orchestrated the entire conduct, monitoring and evaluation. Three corps, two armoured brigades, two artillery divisions, an air defence division and the Pakistan Air Force participated….Fourteen new concepts were tested; many vital lessons were learnt.The events were covered by national and international media. Several international delegates, Asian as well as Western, visited and were briefed including the leaders of, what Zbigniew Brzezinski also called them, the holy warriors. Gulbadin Hikmatyar, Prof Burhanudin Rabbani, Sibghatullah Mujadadi, Abdul Rab Rasul Sayyaf and Mulvi Younis Khalis were prominent. Some observations, they made, were point black and dictated by their grip on war making strategy. Over all the visiting delegates appreciated, the conduct that was meticulous and agreed that Blueland maneuvers could blunt Foxland offensives. That was precisely the message Gen Beg had intended to convey across the border.
Indian Military hierarchy’s frustration with what Sundarji had left for them as a model doctrine, employing three strike corps in ‘blitzkrieg’ style, grew worse in the wake of ‘Operation Parakaram’ that trailed December 13, 2001 attack on Indian Parliament. Mobilization of Indian army was ordered on 18 December 2001 to maul Pakistan severely for its alleged involvement that India detected ‘marvelously’ in just about three days time. Other than a few leading powers, world was oblivious of the Indian ‘responsibility’ to spark off an inferno in the Subcontinent. However, assembly of Indian forces was sluggish and stretched over three weeks. In the mean time, President Musharraf played his cards by ordering formations to occupy battle locations. He also gave a ‘turn about’ address to the nation, renouncing ‘Jihadis’ to woo Western sympathies, particularly of US that could not afford to see Pakistan switch its forces from Western to its Eastern borders. International actors’ intervention averted the conflict. Thus, masked operational lacunas in Indian Army planning, surviving comfortably hitherto fore, came under sharp scrutiny. Walter Ladwig III of Oxford University clearly saw the flaws in Indian’s war making ambitions like loss of strategic surprise, large size of strike forces that forced a long gap between political decision and military action and finally denuding of holding corps of any offensive punch. Hence, it was imperative to evolve a doctrine that should over-ride such weaknesses of one of the largest standing armies in the word that had clung to defensive-defence strategy since partition. In other words, a dangerous conflict averted in 2001 led to Indian pursuits that are more lethal in the realm of deceptive war making in all forms.
Indian Army Chief, General Padmanabhan unveiled CSD in April 2004. Could it be summed up as a novel and brilliant idea? Certainly not because it carried conspicuous Sundarji’s stamp with mix of Indian Army Chief’s astuteness who managed now to substitute Sundarji’s lightening ‘blitzkrieg-like’ deep offensives doctrine with sharp and crisp shallow multiple strikes called CSD, also claiming to knock out their own holding and offensive corps’ capability gaps. In other words, now Indian defensive corps could contribute as effectively as strike corps, at least hypothetically and the latter were to become known as Integrated Battle Groups (IBGs). Media leaks suggested that initially Indian army would constitute eight IBGs and each would be a concentrate of firepower and mobility under lavish air umbrella, built upon division size armor or mechanized formation with ability to operate as groups or sub-groups executing independent operations within the Group’s area of operation. The destruction of Pakistan Army has been retained as most lucrative objective, employing tremendous firepower and state-of-art means of ground as well as aerial mobility that would interdict and destroy its reserves, comprising mechanized formations.
General Padmanabhan’s brand of CSD sounded fantastic, as did Sundarji’s blitzkrieg and concept of simultaneity during peacetime about a decade earlier. Once the military logisticians, assembly of forces experts and their Ordnance Corps would have sat together to formulate the inventories to equip the Army with Padmanabhan’s long indent for latest machines, weapons and munitions, finance organ of Indian Government would have shuddered. Commenting on CSD within a month of its unveiling in his May 2004, what he called, strategic paper, Dr. Subhash Kapila, almost had rub with the vision that CSD could not be harnessed militarily as per the perceived scales and if proceeded with, it would amount to asking for moon. He wrote as an indirect admission, “The unveiling of a new war doctrine throws up a host of factors for discussion in terms of why a new war doctrine is required, what are the attendant factors in putting it into operation, the limiting factors that may come into play…”. Commenting three and half years later in December 2007, Dr. Subhash Kapila’s apprehensions further blossomed. He even argued to defer CSD until 2010 because, “India’s COLD START WAR DOCTRINE woven around the operational concept of offensive operations at the very outset of hostilities cannot proceed towards success on Indian Army undertaking military operations with incomplete military inventories…”. Hence, it says all to conclude that CSD is a concept on paper and may be nothing more than at experimental stage with old clattering machines. Conversely, maintaining vigilance about an adversary is the hallmark that Pak Army must observe. For its consumption, it has to underscore the need for meeting an adversary in the battlefield as if they are equipped right now to the needle details. Indian endeavor to fling strategic surprise on Pakistan as a pre-emption strategy must be checkmated by covert peacetime measures so that its forces instinctively remain out of their bite through ruses, well conceived by military leadership even when the war balloon has not gone up yet.
One would not question Indian Army’s prerogative to equip its forces to any limit but a pertinent question comes up here. Why did General Padmanabhan switch to intense multiple SHALLOW maneuvers concept? Obviously, the answer is that in the presence of nuclear strike capability with Pakistan Army, there has to be a limited war on the cards. In other words, the change of heart did not emanate from his vision but driven by a compulsion, forced on Indian army under the obtaining politico-military environments. Therefore, CSD has another inhibiting factor that Indian battle sweeps have to remain short of reaching nuclear retaliation threshold. Answer becomes a question again if one asks the proponents of CSD that when India initiates conflict under the label of limited war, how friendly India would remain with Pakistan to keep the war under ‘limited’ tag. Do the adversaries prescribe the counter measure levels to each other? What India marks as limited objectives, in Pakistan Army reckoning they might not be ‘limited’ category? Military will and intentions on two sides have to differ because they work against each other. Though Pakistan would never ever be nuclear button-happy-power but when destruction of our Army is envisaged by CSD, that is the center of gravity of our survival, how would Indian war wizards ensure that Pakistan would desist from using nukes, particularly once Pakistan Army’s concept of operations hinges on offensive-defence strategy? About the nukes, Shireen Mazari says, “Pakistan’s nuclear escalation ladder has only ‘one rung’.” Thus, she seals the argument.
The proposition would remain dangerous when India intends resorting to such measures like CSD under the assumption that by subjecting Pakistan to retribution, it would desist from proxy war in Kashmir that Pakistan denies. Instead, Pakistan maintains that Indian state terrorism has pushed Kashmiris to the brink. The scholars, world over have labeled CSD as dangerous to execute on prefixed speculations based on tunnel vision. CSD creates space of legitimacy for Pakistan to demand from India to rub off its intrusive footprints in Baluchistan, FATA, Pak-Afghan border areas and thus leverage for escalation of crisis is afforded to Pakistan to recover its internal stability. On Pakistan side, there is undue haste instead to sacrifice all its national interests and strong diplomacy pivots without India shifting from its non-yielding stance by an iota. Affording India the facility of trade corridor to Central Asia through Pakistan and granting ‘Most Favored Nation’ status while ‘Kashmir’ wound still festers since decades, would be a folly with no parallel. Indian military collaboration with Israel is also a cause of change in Indian overtone when she talks of military ventures or handles Kashmiri demonstrations in mode and severity parallel to Israeli handling of the Palestinians’ demonstrations. With Israel colluding now with Indian military extensively, resentment against Israel has grown manifold in Pakistan though, it did not enjoy a favorable score since inception of state of Israel.
India has to realize that its stakes in regional peace are far greater than Pakistan and hence its unimpeded economic spiral would be a factor to force India to reach for reconciliation with Pakistan in an earnest manner. Seeking ‘peace’ through dialogues and negotiations fervently by both the powers is the ultimate option they would have to embrace but an early embrace would augur well for the regional as well as for the world peace. Powers that have the clout with India and Pakistan must facilitate the adversaries to reach at workable solution. International community is also encumbered with the responsibility to caution India to desist from such momentary madness of 18 December 2001 that could have far-reaching repercussions beyond remedy.
Dr.Makni (his acronym) is also an author of a book: “The New Great Game: Oil and Gas Politics in Central Eurasia”. (firstname.lastname@example.org)
India’s Military Spending and South Asian Security
Over the past several years, unprecedented military modernization in Pakistan’s immediate neighbour, India, has worsened South Asia’s security environment. India’s heavy military spending and its unstoppable quest for the acquisition of sophisticated weapons have threatened regional stability. Indian desire to acquire global power status through military means has further been intensified as a result of US assistance particularly in former’s defence sector. Within quick span of time, defence trade between India and the US has shot from $1 billion to over $15 billion leaving other regional powers in the state of security consciousness.
India’s obsession with its military build-up doesn’t end here. According to the Stockholm International peace Research Institute (SIPRI) a prestigious international institute dedicated to research into conflict, armaments, arms control and disarmament, India, once again tops the list as world’s largest weapons importer. This is not a new development as previously, India also topped the list for the same reason.
As per SIPRI estimates, Russia remains top arms supplier to India. However, surprisingly arms deliveries from the US increased more than six-fold in the five-year period to the India. This trend in long run will definitely reduce market space for Russian arms and ammunition to India.
Despite the fact that, India’s unbridled military modernization is the primary impetus behind South Asian instability, global power’s economic expediencies in South Asia also undermines delicate conventional parity between India and Pakistan. For instance, Indo-US strategic partnership, which apparently touted as US’ China containment policy, seems more of a Pakistan containment policy. Much of the US provided weapon-tech to India is more useful against Pakistan in a conventional warfare. Almost 70% of Indian military troops and weapon system are deployed against Line of Control, (LOC). Interestingly, peaceful settlement of Docklam issue between China and India as well as sky-rocketing bilateral trade between both countries, which has reached to $84.44 billion last year, makes prospects of conflict almost impossible.
However, in contrast to aforementioned facts, the influx of massive military hardware from western capitals to India continues and in certain cases the flow of arms has gained momentum. There are two primary motives behind India’s overwhelming spending in defence industry.
First, India aspires for greater role in global environment and in certain ways it has been demonstrating its will and capability to influence global dynamics. India’s successful test of Agni-5, a long-range ballistic missile, capable of carrying nuclear weapons with a strike range of more than 3,000 miles, is a practical demonstration of its military capabilities to influence other powers around the globe. For hawkish policy makers in New Delhi, a strong military power can extend India’s global influence.
Secondly, India is following a policy of coercion at regional level primarily, against Pakistan which shares history of hostility and violence due to longstanding territorial disputes such as Kashmir. There is growing perception in New Delhi that militarily strong India can dictate South Asian affairs. That’s why India has been consistently opposing diplomacy and dialogue for peaceful resolution of disputes. Therefore, to meet its foreign policy goals, which are based on coercion and usage of hard power, India spends massive in military build-up.
Ironically, South Asia is called as nuclear flashpoint due to history of animosity and violent conflicts between India and Pakistan. With its mighty military power, India has emerged as the most potent threat for not just Pakistan but also a security challenge for other powers in the region.
Given the advantage it has in terms of nuclear missiles, military hardware and submarine fleet, India has been trying to create an environment conducive to wage limited war against Pakistan. For that, India has not just developed its military doctrine, Cold Start Doctrine, but also initiated and sponsored sub conventional war in Pakistan’s chaotic province, Balochistan.
In such circumstances, Pakistan needs to maintain delicate conventional military balance vis-à-vis India. Despite the fact, Pakistan has been facing number of issues at national, regional and international levels which include on-going military operation in tribal areas to hostile border skirmishes; a robust military modernization plan has become inevitable. A militarily strong Pakistan will be able to maintain its territorial integrity against aggressive yet militarily mighty India.
It’s an open fact that Pakistan has consistently called for peaceful resolution of all outstanding disputes and it has offered to resume diplomacy and dialogue over Kashmir dispute. Unfortunately, India’s cold response has not only restricted Pakistan’s peaceful overtures but also refused to accept third-party mediation in peaceful settlement of Kashmir issue. This clearly shows that, current ruling regime in India is not serious for peaceful settlement, rather more inclined to use of force and coercion. Under such circumstances, Pakistan needs to strengthen its force posture to pre-empt any kind of misadventure from its adversary. However, Pakistan, as it has done in past, must embrace peaceful overtures to bring stability in the region.
US Call for a New Relationship
‘Trust, but verify’ an Old Russian proverb that President Reagan liked to repeat often. Trump is neither the first President nor he is going to be the last to criticize Pakistan of deceit and threaten to cut off American assistance. Notwithstanding, the last six decades of the US support, the US has failed completely in cultivating an ally in Pakistan nor has it meaningfully changed the nature of its relationship with Pakistan, which can be best described as ‘transactional’. A quid-pro-quo relationship between the two has never been established with regards to the assistance they both offered to each other. In truth, United States has never really trusted Pakistan.
President Trump avowed in his New Afghan Strategy that the US has been paying Pakistan ‘billions of billions of dollars at the same time they are housing the very terrorists that we are fighting for’ but the mantra should be put to a halt. Likewise, the US must be conveyed boldly to stop continuing its false claims that Pakistan shelters the ‘agents of chaos’ and be reminded that friends don’t put each other on notices.
Similarly, statements and avowals that India now is a strongest ally to the US, disturbs Pakistan, chiefly because of the irony at Trump administration’s part which only sees the glittering Indian market but pay no heed to the growing Indian cease fire violations across the LoC and the atrocities India commits against the unarmed civilians of the Indian held Kashmir.
The recent visits and statements however by the senior US officials and Trump’s aides reflect the US call for a new relationship between the US and Pakistan, which once used to be close allies in the US led ‘Global War on Terror’.
Pakistan’s foreign policy makers at this point in time must be mindful of the fact that the US is a major trading partner and should adhere to a relationship more than ‘transactional’. Moreover, the risks and fears at the US part of ‘rampant destabilization and civil war in Afghanistan’ increments further the region already devoid of trust. For, nobody actually knows whether the US will stay or eventually leave Afghanistan.
The Afghan war has now become a war of logistics, in words of Sun Tzu ‘the line between order and disorder lies in logistics’, Pakistani supply lines thus provide Islamabad with a leverage in absence of shorter, cheaper and acceptable alternative routes. Given these circumstances, Pakistan should make best use of the US call towards a more robust bilateral relationship.
The move for a ‘new relationship’ and improved ties began last week with senior Trump aide’s visit to Islamabad to hold talks with Pakistani leaders. Earlier also the impressions that Pakistan and the US were on a collision course were dispelled by a top US general. Likewise, US department’s acting Assistant Secretary for South and Central Asia Alice Wells asserted that the US was not thinking of cutting its ties rather assured that the US still cogitate Pakistan indispensable to the resolve in Afghanistan.
The aforesaid developments clearly indicate that the strained US-Pakistan relations would improve soon and that the suspension in the military aid is also not permanent.
To conclude, achieving long term stability and defeating the insurgency in the region will be difficult without Pakistan’s support and assistance.
Special Economic Zones and CPEC
Economic Expansion, high prices and inflation are the issues on which one can talk for hours. The scarcity of resources, energy crises and lack of industrial modernization are the challenges which Pakistan has been facing for past many decades. Despite the advantages of geographical setting, the country could not sufficiently expand its economy until 20thcentury. However, the China-Pakistan Economic Corridor (CPEC) has brought with it various infrastructural, energy, and industrial projects that show smooth progress in these sectors. One of the most significant developments is the establishment of Special Economic Zones (SEZs) under the Long Term Plan (LTP) of CPEC.SEZ is a physically protected area with definite geographic boundaries under which the investors and the developers enjoy duty free benefits and streamlined procedures, set up by the government. After the successful completion of the Early Harvest Program (EHP), the governments of China and Pakistan aspire to complete the Long Term Plan (LTP) of CPEC. As a key route to success, the LTP has been divided into three phases and the work on the first phase has already started. SEZs are on the first priority list of the first Phase of LTP. While utilizing the strategic location of Pakistan and the rich resources, the SEZ will contribute a framework for Pakistan’s domestic industries, and local economy.
The government has planned to establish nine Special Economic Zones (SEZs) in all the four provinces, federal areas and Gilgit-Baltistan under the framework of CPEC, which would be completed in a period of three years. Pakistan has conducted feasibilities of 5 SEZs which focuses only on the infrastructure. The three prioritized SEZs to be completed in the first phase of LTP are M3 Industrial City in Faisalabad, Punjab, Chinese SEZ Dhabeji, Sindh and Hattar SEZ in KP province. While the remaining six sites include Rashakai Economic Zone, M-1 Noshera, Bostan Industrial Zone District Pishin, AllamaIqbal Industrial City, Moqpondass SEZ in Gilgit-Baltistan, ICT Model Industrial Zone Islamabad, Development of Industrial Park on Pakistan Steel Mills Land at port Qasim near Karachi, Special Economic Zone at Mirpur AJK, Mohmand Marble city.
Although, there are general misunderstandings regarding the industrial ramifications of the SEZ’s under CPEC due to large number of Chinese firms and the exemption in the tax rates offered to them. However, the LTP of CPEC shows that these SEZ’s will offer the country with a great opportunity to accelerate industrialization because they are beneficial for all the international and domestic investors. So far in the history, SEZs have been the reason of economic boost in countries around the globe. Now this is a matter of concern that either these SEZs will make Pakistan a center of economic modernization and trade ventures or not. The economist and financial experts are optimistic about Pakistan’s emergence as one of the fast growing and promising global economy.
While stepping towards the era of industrialization, Pakistan faces a number of issues that have so far refrain the industries to understand their growth potential. Some of the chief hindrances to investment in Pakistan include poor security; non-availability of infrastructure and power crises, rent-seeking regulators, and cumbersome tax administration, etc. among many others.
Likewise the entrepreneurs in Pakistan have certain reservation with the incentives proposed by the government and SEZs for the investors and enterprises including ten-year exemption from all taxes on imported capital goods and exemption from tax on income accruable from development and operations in SEZs for a period of ten years. Although these incentives will be beneficial for the foreign investors at large but at the same time it will provide Pakistani enterprises with the opportunity to collaborate with the Chinese firms and launch joint ventures of mutual interests and benefits. This will be further beneficial for the annual Gross Domestic Product (GDP) growth of Pakistan. Moreover it will bring Foreign Direct Investment (FDI) in the country thus generating the foreign revenue.
Subsequently it is significant to keep in mind that in Pakistan there are certain security and political factors due to which the SEZ’s may face challenges. Hence forth to conquer these challenges provincial harmony among all the provinces and mutual consensus between the public sector and private sector is needed. SEZs under CPEC will be a life-time opportunity for Pakistani companies to work together with Chinese companies for the development of export-oriented manufacturing industries. Therefore, Pakistan should increase its products in the Chinese market and raise the ratio of its export while decreasing the trade deficit by lowering the imports.
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