Page 25 - CMA Journal (Sep-Oct 2025)

Focus Section

Table 1: Prioritized SEZs under CPEC
SEZs Name Province Strategic Focus Status 2025
Rashakai KPK Textile, SME, Manufacturing Phase-1 Infrastructure completed upto
Approx 95%
Dhabeji Sindh Heavy Industry, Engineering Phase-1 development work completed
near Port Qasim
Allama Iqbal Punjab Export Oriented Manufacturing, Plot progressing about to complete near
Industrial City Textile to operational readiness
Gwadar Free Zone Balochistan Logistic, Trade, Port-Led Industry Pilot zone is functional, Master Plan
expanded under control Smart Port City
Source: Compiled by Author based on published studies and institutional guidelines .
By establishing these zones, Pakistan aims to position Similarly, Pakistan's position as a commercial gateway is
itself as a competitive destination for investment, strengthened by the operationalization of Gwadar Port
benefiting from China’s industrial relocation and regional and the logistics infrastructure located in the Gwadar
trade expansion (Hussain & Mehmood, 2023). Free Zone (Pakistan Institute of Development Economics,
2022).
SEZs and Regional Growth Potential
Another important consideration is energy infrastructure.
SEZs have enormous potential to spur local economic Chronic energy shortages have been alleviated by CPEC's
expansion. Firstly, they serve as catalysts for job creation new power plants and transmission links, ensuring a
by absorbing both skilled and unskilled labor. According steady supply of electricity for industrial processes.
to estimates, over a million jobs might be created in Additionally, enhanced logistics, such as integrated
Pakistan over the next ten years through CPEC-related customs systems and dry ports, lower transaction costs
SEZs (Asian Development Bank, 2022). Secondly, SEZs and speed up international trade.
provide local businesses with a platform to grow by
enabling them to enter international supply chains By integrating ports, highways, energy, and logistics,
through technological alliances, joint ventures, and CPEC establishes the conditions required for SEZs to
subcontracting. prosper. However, maintaining competitiveness in local
and international markets still requires continuous
Technology transfer is another important factor. It is maintenance and improvements.
expected that improved manufacturing methods and
managerial techniques introduced by Chinese and Policy Reforms and Investment Climate
other international businesses entering Pakistan's
Although infrastructure is crucial to SEZ performance,
Special Economic Zones will increase productivity. SEZs
investment conditions are determined by governance
also promote industrial clustering, lower transaction
and policy. Pakistan has implemented SEZ-specific
costs, and encourage innovation by facilitating the
incentives, such as tax vacations, duty-free machinery
spread of knowledge.
imports, and modernized levy measures (Government of
SEZs have the potential to greatly boost Pakistan's GDP Pakistan, 2022). However, challenges remain, such as poor
and reduce regional economic inequality by connecting contract implementation, unreliable taxation practices,
labor markets, SMEs, and advanced sectors. and bureaucratic delays.
Infrastructure, Connectivity, Governance improvements are essential for boosting
investor trust. For SEZ investors, a one-window operation
and Trade Facilitation
is crucial. Additionally, coordinating provincial proce-
The growth of supporting infrastructure is essential to the dures with national agendas and using conflict resolution
success of SEZs under CPEC. Connectivity between SEZs tools is necessary (World Bank, 2023). Clear monitoring
and major trade routes is improved through the platforms for approvals are also vital for avoiding red
development of road and rail networks, such as the Main tape.
Line 1 railway project and Karachi–Peshawar Motorway.
Table 2: Expected Economic Contributions of CPEC-SEZs
Indicators Projection (by 2030) Sources
Employment Opportunities 1-1.2 million New Jobs NIP official data, Pakistan Today (2025)
FDI Inflows USD 7-10 billion Annually Economy.pk (2025)
SME Participation 30-40% SEZ-Linked Supply NIP Official Data; BOI (2025)
Export Growth 15-20% Annual Increase CPEC.gov.pk (2025)
Source: Compiled by Author based on published studies and institutional guidelines.
ICMA’s Chartered Management Accountant, Sep-Oct 2025 23