Page 24 - CMA Journal (Sep-Oct 2025)

Focus Section

SEZs and CPEC:

Driving Pakistan’s Industry,

Trade, and Regional Growth

The evolution of special economic zones (SEZs) arises key SEZs, leading to
for nurturing and promoting regional industries, feasible policy
expanding exports, and supporting economic growth. suggestions for Imtiaz Bashir, FCMA
Most countries use special economic zones as a tool for maximizing benefits. Senior Instructor of Commerce,
attracting foreign direct investment (FDI), facilitating Government Graduate
technology transfer, and generating employment Understanding College of Commerce, Multan
opportunities. Recently, Pakistan has pursued the SEZs and CPEC
development of SEZs under the umbrella of the
Selected areas or infrastructure that support and attract
China-Pakistan Economic Corridor (CPEC), a high-profile
project of China’s Belt and Road Initiative (BRI). Under local and foreign investment through government
this project, Pakistan and China are connected via incentives such as tax-free zones, minimum tax liability,
Gwadar Port to China’s Xinjiang region, along with a or ease in registering new business projects—are
broader network of infrastructure including highways, known as Special Economic Zones. Live examples of
railways, and pipelines to facilitate industrial zones and such SEZs include China, the United Arab Emirates, and
integrate them into international value chains (Khan & Vietnam, which have leveraged them for industrial
Anwar, 2022). development and export-led growth (UNCTAD, 2023).
Likewise, Pakistan also aims to develop similar
According to the World Bank report published in 2023, infrastructure to align with CPEC. The primary objective
the strategic potential of SEZs under the umbrella of
of such facilitation is to replicate growth-led exports
CPEC encompasses not only industrial development but
also regional integration, linking Pakistan with Central and industrialization in Pakistan.
Asia, South Asia, and the Middle East. Through this As far as CPEC is concerned, it serves as an international
integration, Pakistan gains strategic positioning in energy example of SEZ implementation. A contract signed
cooperation, industrial development, and enhanced between China and Pakistan involves investments of over
sustainable economic growth, subject to effective policy USD 60 billion. This transformative project includes
reforms, strong governance, and mitigation of
energy creation and transfer, as well as infrastructure
environmental and debt-related risks.
development including highways and railroads for
This article explores the multi-layered features of SEZs in industrial cooperation. This mega project involves nine
Pakistan’s regional development in the context of CPEC. It SEZs in the region, including Allama Iqbal Industrial City
scrutinizes how SEZs create employment, facilitate in Punjab, Dhabeji in Sindh, Gwadar Free Zone in
technology transfer, ease regional trade, and support Balochistan, and Rashakai in Khyber Pakhtunkhwa
small and medium-sized businesses. The scope of this (Government of Pakistan, 2022). SEZs are designed and
article also discusses the preliminary structure, main located strategically to connect mineral wealth with
pillars, policy reforms, challenges, and global examples of proximity to ports.

22 ICMA’s Chartered Management Accountant, Sep-Oct 2025