The Impact of CPEC ’s Infrastructure Projects on AJK’s Regional Connectivity and Economic Growth

Abstract

The economic effects of significant infrastructure projects along the China-Pakistan Economic Corridor (CPEC) on the Azad Jammu and Kashmir (AJK) region are investigated in this thesis. The study takes a quantitative approach, analyzing the relationship between AJK's GDP growth rate and investments associated with the China-Pakistan Economic Corridor (CPEC) using a multiple linear regression model. Using a simulated analysis of fictitious data, the study discovers a statistically significant positive correlation, indicating that the creation of a Special Economic Zone (SEZ) in Mirpur and investments in road infrastructure, such as the Mansehra–Muzaffarabad–Mirpur–Mangla Expressway (M4), support regional economic development. The results show promise for higher GDP growth, substantial job creation, and beneficial sectoral effects, especially in manufacturing and tourism. A comparative baseline analysis is also included in the report to emphasize the advantages of these initiatives. In order to optimize the economic advantages of CPEC, the conclusion provides policy recommendations for the AJK government, highlighting the necessity of environmental protection, workforce development, and strategic planning.