Strategic Management Assignment

E18MBA064 Bakhtawar Akbar

Section A
Semester 7th
Submitted to Professor Dr Hamid
STRATEGIC MANAGEMENT Process about CPEC:
China-Pakistan Economic Corridor (CPEC), massive bilateral project to improve infrastructure
within Pakistan for better trade with China and to further integrate the countries of the region.
The project was launched on April 20, 2015 when Chinese President Xi Jinping and Pakistani
Prime Minister Nawaz Sharif signed 51 agreements and Memorandums of Understanding
valued at $46 billion.
The goal of CPEC is both to transform Pakistan’s economy—by

 Modernizing its road, rail, air, and energy transportation systems—

 And to connect the deep-sea Pakistani ports of Gwadar and Karachi to China’s Xinjiang
province and beyond by overland routes. (Xinjiang borders the countries of Mongolia,
Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, and India, and the
ancient Silk Road ran through its territory.)
This would reduce the time and cost of transporting goods and energy such as natural gas to
China by circumventing the Straits of Malacca and the South China Sea. The announcement of
joint space and satellite initiatives between Pakistan and China, spurred by CPEC, followed in
2016. CPEC is part of the larger Belt and Road Initiative—
To improve connectivity,
Trade, communication,
And cooperation between the countries of Eurasia—announced by China in 2013. CPEC has
been compared to the Marshall Plan for the rebuilding of post-World War II Europe in its
potential impact on the region, and numerous countries have shown interest in participating in
the initiative.

CPEC Vision & Mission

To improve the lives of people of Pakistan and China by building an economic corridor
promoting bilateral connectivity, construction, explore potential bilateral investment, economic
and trade, logistics and people to people contact for regional connectivity.
It includes:

 Integrated Transport & IT systems including Road, Rail, Port, Air and Data
Communication Channels
 Energy Cooperation
 Spatial Layout, Functional Zones, Industries and Industrial Parks
 Agricultural Development 
 Socio-Economic Development (Poverty Alleviation, Medical Treatment, Education, Water
Supply, Vocational Training)
 Tourism Cooperation & People to People Communication
 Cooperation in Livelihood Areas
 Financial Cooperation
 Human Resource Development

CPEC was planned to be completed in three phases.

 The first phase of CPEC was to remove key economic bottlenecks namely energy and
infrastructure.
 The current phase is about industrialization, socio-economic and agricultural
cooperation
 And promoting business and consolidating developments
China-Pakistan Economic Corridor has Significance for the development of the region.
Potential areas of cooperation/development include:
 Regional Connectivity
o Transport Infrastructure
o Energy Hub/flows
o Logistic Hub/flows
o Trade & Commerce
o Peace & development of region
o Connectivity/Harmonization/Integration of civilizations
 Diverse Investment opportunities
 Industrial Cooperation
 Financial Cooperation
 Agricultural Cooperation
 Socio-Economic Development
o Poverty Alleviation
o Education
o Medical Treatment
o Water Supply
o Vocational Training
 Tourism including coastal Tourism
 Educational linkage
 Human resource development
 People to people contact
 Increase in livelihood opportunities
 Enhance Security and stability of the region

The division of the CPEC into three phases (early, medium-, and long-term projects)
Being a long-term project that goes beyond 2030 (Ministry of Planning, Development and
Reform 2017), the CPEC is divided into three phases: early harvest projects (EHPs) (priority
projects for the first five years), medium-term, and long-term (China International
Development Cooperation Agency 2019). Eleven out of the 22 EHPs have been completed,
whilst 11 are under construction. The EHPs have addressed Pakistan’s energy shortfall of
5,000 megawatts (MW) (Kugelman 2014), and the rest have rehabilitated the existing and
constructed new infrastructure of roads and highways, which would create an enabling
environment to boost trade and mobility.

Recommendations
The CPEC is a megaproject and like all megaprojects has been confronted by challenges and
implementation barriers. There are five key problems with realizing the CPEC, which the
author outlines here, alongside recommended steps to increase the effectiveness of project
implementation: (1) a communication strategy to ensure the proactive dissemination of
information; (2) building the capacity of host country implementing institutions; (3)
extensive due diligence and preparation for informed decision-making; (4) improved
coordination between federal government departments, the federal government, and
provincial governments; and (5) inclusive decision-making via engaging civil society, local
communities, the private sector, and both national and regional political parties across the
political spectrum.

The EHPs under the CPEC to date have mostly been delivered with success, despite a host of
challenges. These successes include a coal mine and coal-fired power plant in Thar Block II,
which according to Deputy Chief of Mission (DCM) Lijian Zhao3 will be completed by the end
of July 2019 and will serve Pakistan’s local coal needs. A further coal power station under
the China Power Hub Generation Company (CPHGC) is due to enter commercial operation in
August 2019, delivering 1,320MW, according to Ambreen Shah, the CPHGC Vice President.4
Two additional megaprojects under the CPEC include the Multan–Sukkur motorway, which
was due to be completed by August 2019, and the Thakot–Havelian Highway, part of the
Karakoram Highway (KKH), which is under construction and expected to be finalised by
March 2020

Conclusion
There is much that can be learnt from the first five years of the BRI projects and corridors,
including CPEC, in terms of both what to do and what not to do. Firstly, the programme
would benefit from a more inclusive, institutionalized (not ad hoc), and scientific approach
to examining (1) the feasibility of the project, (2) the project’s alignment with the host
country’s national development strategy, and (3) the project’s intended and unintended
consequences and long-term impact on the environment and economy. One way to address
the aforementioned issues would be by creating an organization which is government-led,
but which includes representation from national and regional political parties, local
communities, the private sector, and civil society, in addition to experts of the project(s)-
related fields, which would pre-empt prospective community or civil society blowback.
By engaging these stakeholders that are ultimately power centers who matter, potential
concerns or insecurities (often present in developing countries that have limited experience
in dealing with an influx of foreign personnel or companies) would be deflected and/or
addressed in a timely manner. This, coupled with a well-conceived, facts-based, and
sustained communication campaign is necessary to apprise stakeholders of the benefits of
particular projects to them and the economy, and to make them part of the solution. All this
would help to build a truly win- win partnership.