Why Pakistan needs efficient structuring of the ‘CPEC Authority’

Shakeel Ramay

In August this year, Prime Minister Imran Khan announced that the China Pakistan Economic Corridor (CPEC) Authority had been established to improve the efficiency of CPEC-related interventions. Therefore, on October 7, the President of Pakistan issued an ordinance for formal creation of the authority. The authority will be headed by the Prime Minister of Pakistan and assisted by a Chief Executive Officer (CEO). The CEO will be assisted by two executive directors for policy research and operations. It will also include six members, who will play a role in finalizing the projects and their execution. 

The proposed structure seems good, as it is focusing on the vision (research) and implementation (operations). However, the final structure and Terms of Reference for the CEO and other officers will provide us with a better picture of authority and its functions. As the authority has just been created, therefore, it is good time to discuss the working and functions of the CPEC authority. 

First, the overall structure of the authority, which has been proposed in the ordinance, seems to have been developed after solid good research. Building on the proposed structure, a sketch of CEO’s office is developed. On the basis our analysis, we tried to add new layers under the executive directors (Fig-1 below).

The CEO of the authority would then be assisted by two executive directors, as prescribed in the ordinance, with the mandates of research and operations. The CEO has been given great autonomy in decision making and implementation. It has also given power to develop budget for the authority. The CEO will be directly reporting to the Prime Minister, which is a good strategy to ensure the autonomy and efficacy of the authority. However, it is suggested here that the authority should also have some linkages with National Development Council (NDC). As NDC is the highest decision making body in present context. 

The Executive Directors (EDs) will assist the CEO and would be responsible for setting vision through research and efficient implementation of programs. Our analysis suggests that four dedicated departments should be created under two Executive Directors. The office of Policy and Research’s Executive Directors should have departments; a) Policy and Research and b) business development. The second Executive Director should also be assisted by two departments; a) Implementation and b) M&E.  

The Policy and Research department should focus on three areas (see Fig-2 below).

First, it should provide legal cover and services for the activities of authority by adopting an appropriate policy framework. The policies should be developed on the basis of the evidence provided by research and engagement. Moreover, the department should also devise skill development policy for implementation. Skill development policy should not only focus on industrial needs, but also agricultural, social sector needs and most importantly the capacity of government and business officials.

Business development department (Fig-3 below) should put all its efforts to create new opportunities for investment. It should also be given mandate to look for new investors beyond China for CPEC related interventions. For example, how Pakistan can bring in new partners like Gulf countries, EU countries etc., for the development of SEZs. It should also map all such investors and present to authority for devising an engagement strategy. Another area of work can be to project the CPEC among other countries by adopting multiple strategies including roadshows. It should be responsible for marketing and engagement with diverse partners.

Executive Director, Operations, should be entrusted with two key functions, namely, implementation and M&E. Implementation is a key area for determining the success or failure of interventions. As we know, major force behind the creation of this authority is to solve the issues of implementation, which CPEC related projects are facing. The department will have to adopt multi-dimension strategy to resolve issues (Fig-4 below).

First, it will have to facilitate all stakeholders by providing guidance and required materials. Second it would have to develop mechanisms for boosting trust of stakeholders. Other important function would be to make sure that all policies are implemented. Moreover, stakeholders feel that ease of doing business is improving not on papers but at ground, time efficiency has increased, and interventions are implemented at time. For that purpose, it will have to create strong linkages with stakeholders, departments and institutions. 

The second function would be to ensure quality in interventions. It should also look after the performance of individuals involved in authority (Fig-5). It should develop key performance indicators for each individual working with authority. There would be continuous monitoring of all responsible persons. It will also be responsible to prepare evaluation reports for stakeholders. Based on M&E, the performance report of authority should be after every quarter and year.

The authority would have to face humongous tasks to make CPEC a success story. However, the first and foremost important task would be the implementation of Special Economic Zones (SEZs). The authority would have to adopt a multi-prong strategy to overcome the challenge of SEZs. There would be three specific areas which would require urgent attention; first, devolvement and implementation of SEZs, second, registration process of businesses and third, provision of skilled labor (Fig-6).

The authority would have to push for early finalization of SEZs policy and operationalization of SEZs. The second task would be facilitating stakeholders and business community in registration process. It is proposed that all relevant departments should be brought under one roof for issuing licenses and NOCs. However, it will take time to develop quality human capital. Fortunately, the authority will have a small window of time to capitalize on. The reason for this belief is that starting of any new industry takes between two to three years. This time lag can be used effectively. But it does not mean that the authority keeps on waiting and misses the opportunity. The following approach can be used to develop human capital (Fig-7)

Lastly, it is pertinent to mention here that the staffing of authority should be done based on future vision and requirement. The ideal candidates would be people who have good experience and understanding of China, its development and its governance models. This is very critical because most of the experts of liberal economic and governance models cannot understand the dynamics of the Chinese system. The authority should focus on engagement of political economists, development experts and people with innovative ideas. It should not be stuffed with people with limited understanding and old ideas. There must be minimum bureaucratic hurdles, otherwise the results would not be so different from past interventions. The authority would be another causality in the name of processes.

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