China-Pakistan Economic Corridor (CPEC) is said to be the game changer for Pakistan raising expectations of revenue inflows along with more job opportunities for the people of Pakistan. It was said that the local industries will also benefit from CPEC by getting access to international borders. Even the local firms believe that CPEC will have a positive impact on their business, according to a Business Confidence Survey 2016 conducted by Lahore School of Economics and Lahore Chamber of Commerce and Industry.
According to the survey, 62% of the local firms believed that CPEC will have a positive impact on their businesses, while 17% believed that the project will have a negative impact on their businesses. 21% of the firms deny the possibility of any CPEC related impact on their businesses. However, the opinions shared by different sectors on the impact of CPEC on their businesses tells a whole another story.
73% of the firms in the service sector and 63% of the firms in the manufacturing sector believed in a positive impact of CPEC on their businesses. However, the retail sector remained pessimistic about CPEC with only 49% of the firms expecting that the corridor project will have a positive impact on their businesses.
The retail sector has already been witnessing major problems following the massive decline in exports in 2016. Consequently, out of 53 firms in the retail sector that participated in the survey, 87% said that they witnessed a decrease in their export revenues and only 8% of the retail firms expect their revenues to increase from exports in the year 2017.
According to these firms, exports have been going down due to energy problems in Pakistan, harsh government policies that are not favoring exports, and strong rupee to dollar exchange rate.
Pakistan’s retail sector is not the only sector that has witnessed a decrease in exports during the year. The country’s manufacturing sector also witnessed a 66% decline in exports during the year, but exports sales of the services sector increased by 53%.
The government now needs to ensure that proper measures will be taken henceforth to promote exports of different sectors and export markets which are currently limited to only Asia and Europe will be expanded beyond these regions.