Before the China Pakistan Economic Corridor (CPEC) was conceived, Pakistan’s economy was constrained by structural weaknesses that had persisted for decades.

Economic growth was inconsistent, infrastructure investment insufficient, and industrial expansion repeatedly disrupted by energy shortages. While policymakers acknowledged these challenges, the country lacked both the fiscal space and long-term planning capacity to undertake projects of transformative scale. This was the context in which CPEC emerged, not as a luxury, but as an attempted solution to long-standing bottlenecks.

In the years prior to CPEC, Pakistan’s infrastructure deficit was severe. According to World Bank estimates, logistics costs in Pakistan were nearly double those of comparable regional economies, eroding competitiveness and discouraging investment. The railway system, once central to national integration, had deteriorated into an inefficient and loss-making enterprise, carrying less than five percent of total freight. Urban congestion and poor intercity connectivity further reduced productivity.

The most damaging constraint, however, was energy. By 2013, Pakistan was experiencing electricity shortfalls of up to 5,000 megawatts. Load shedding of eight to twelve hours a day had become routine, particularly for industry. The Planning Commission estimated that power shortages alone were shaving nearly two percent off annual GDP growth. Factories closed, investment stalled, and exporters lost contracts to more reliable regional competitors.

Foreign direct investment reflected this fragility. Net FDI averaged under two billion dollars annually between 2008 and 2013, with most inflows concentrated in telecom and extractive sectors rather than manufacturing. Regional inequality deepened as economic activity remained concentrated in a few urban centers, while Balochistan, southern Khyber Pakhtunkhwa, and interior Sindh remained largely disconnected from national growth. This was the baseline from which CPEC........

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