Page 26 - CMA Journal (Sep-Oct 2025)

Focus Section

Reforms in taxation are therefore important. Compared geopolitical interests, Pakistan can enhance its corporate
to regional rivals like Bangladesh and Vietnam, moderate and diplomatic appeal by leveraging CPEC-SEZ.
tax rates and simple compliance processes can enhance
Pakistan's competitiveness. Pakistan may fully realize the Case Studies of Key SEZs in Pakistan
potential of SEZs under CPEC by strengthening
Pakistan’s CPEC plan includes three SEZ projects:
governance, streamlining taxation, and ensuring policy
conformity. SEZ 1: Rashakai (KPK) – Focused on small and medi-
um-sized businesses and manufacturing, aiming to
Challenges and Risks create 200,000 new jobs.
Notwithstanding its potential, SEZ-CPEC faces several SEZ 2: Gwadar Free Zone (Balochistan) – Located
challenges, including governance problems, weak near Gwadar Port, dedicated to logistics and transporta-
institutions, corruption, and inefficient administration, tion operations.
which undermine investor trust (Khan & Anwar, 2022).
Debt sustainability also raises concerns about future SEZ 3: Allama Iqbal Industrial City (Punjab) –
arrangements (IMF, 2023). Furthermore, some regions still Concentrated on manufacturing, particularly export-
face significant security risks, which threaten infrastruc- based production, benefiting from CPEC-SEZ highways
ture, foreign workers, and human resources. Environmen- and rail connections.
tal sustainability issues, including resource depletion, To support various provincial contexts, the
carbon emissions, and biodiversity loss, are also increas- above-mentioned SEZ-CPEC initiatives play a vital role in
ingly associated with large-scale SEZ-CPEC projects achieving maximum economic and diplomatic benefits.
(UNDP, 2023).
Table 3: Comparative Overview of Key SEZs
SEZ Name Province Key Focus Area Expected Jobs Current Status
Rashakai SEZ KPK
mover
Gwadar Free Zone Baluchistan Logistics, Trade 100,000 Deep sea port, Key regional trade
node.
Allama Iqbal Punjab Export Manufacturing 300,000 Punjab industrial hub, export driven
Industries City
Source: Compiled by Author based on published studies and institutional guidelines.
To address these challenges, the following approaches Policy Recommendations for Maximizing
should be adopted: green finance policies, safeguarding SEZ and CPEC Potential
environmental sustainability, establishing good gover-
nance, and stabilizing law and order in the region. If If Pakistan wants to maximize the contribution of SEZs to
Pakistan wants to maximize benefits from SEZ-led regional development and growth, it should implement a
growth, these policies are necessary. comprehensive plan of action:
Regional Integration and • Reinforce Governance: For transparency and an
Geopolitical Implications effective SEZ one-window operation, the
government must utilize digital platforms.
The consequences of SEZ-CPEC extend beyond national
growth. Pakistan occupies a key position in regions • Tax and Regulatory Reforms: Maintain stable
including South Asia, Central Asia, and the Middle East. and sustainable taxation practices aligned with
Central Asian countries may access global markets regional norms.
through Gwadar Port, while close ties with Iran and
Afghanistan could support regional economic stability • Encourage Green Industrialization: Companies
and cross-border trade (CSIS, 2022). should operate in a circular economy and use
renewable energy sources to protect the
Strengthening the bilateral connection between China
environment.
and Pakistan is another geopolitical outcome of
SEZ-CPEC. SEZs also attract additional countries, such as • Improve Security: SEZs must provide top-quality
Saudi Arabia, Turkey, and other GCC nations. China can security to safeguard infrastructure and investor
influence global power dynamics through SEZs, which funds.
may lead to regional economic and geopolitical stability
and change. Even if regional integration balances
24 ICMA’s Chartered Management Accountant, Sep-Oct 2025