Gwadar Revamping Regional Economic Architecture

Pakistan has a coastline of about 1001 kilometer long. Geographically, Pakistan’s coast is divided into five Coasts, including Gwadar, Lasbela, Karachi, Thatta, and Rann of Kutch. Karachi and Gawadar ports are of crucil importance for economy. Karachi is located on the eastern coast near the Indian side, whereas Gwadar is located on the West, near the Iranian side of the Middle East. Gwadar Port has a important geostrategic location in the region, as it is situated near the noteworthy sea trade routes, while giving a strait route to Africa, Europe via the Red Sea, the Passage of Hormuz, and the Persian Gulf to East Asia and the Pacific. The Gwadar Port  is viewed as aflagship project of China Pakistan Economic Corridor (CPEC) under the Belt and Road Initiative (BRI). China and Pakistan’s consensus on the “1+4 arrangements” in 2013, not only prioritized the implementation of CPEC but also focused on the construction of Gwadar port, energy supply, and transport infrastructure. Progress of Gwadar port is widely applauded by countries across the Arabian Sea for its smooth and well-organized operationalization.

The growth of Gwadar Port is rebalancing the regional geo-economic symmetry as it has begun addressing the economic challenges of Pakistan as well as revamping the regional economic perspectives by producing the advantageous environment of comprehensive collaboration via new trade routes in order to connect with the other parts of the world. Such as under the CPEC, linkages are developed between Gwadar port and Xinjiang’s Kashgar, which is likely to fuel more economic development of underdeveloped areas along the corridor.  Inter-connectivity with China and other regions. This further provides an opportunity to coordinate the economic strategies and work together for  mutual benefit. It is very much evident that the impacts of the development of Gwadar port are not merely confined to China and Pakistan but has the potential to alter the regional economic environment, as well as mark its print on the inclusive future global dynamics of trade and economic associations among various countries. The development of the port under CPEC based on joint consultations and multi-dimensional benefits is in the region’s interest that reflects the mutual principles and pursuit of regional advancement, peace, and development.

Gwadar port would suitably link three regions of Central Asia, South Asia, and the Middle East. This regional connectivity would bring resources of Central Asian Republics (CARs) in access for trade that includes minerals, hydrocarbons, oil, and gas.  It will also promote tourism besides enticing foreign investment. It is also estimated that through Gwadar port CPEC would create transit revenue of US$ 70 billion per annum. Special Economic Zones would generate enormous employment opportunities. Subsequently, the augmented trade and commerce undertakings, mainly in Baluchistan province, would usher in an era of financial prosperity of Pakistan and the whole region.

Additionally, the port enhances the strategic advantage of Pakistan, as it would support Pakistan to screen the Sea Lines Communications (SLOCs) initiating from the Persian Gulf and the Strait of Hormuz. Then, the oil sea routes and trade links of South Asia, Central Asia, Africa, and the Middle East would also be in control. Being the leading part of the globe, Asia encompasses several landlocked countries whose entree to the sea via their land routes is very costly. Such countries look for the shortest possible routes to carry out economic international trade. Eastern seaport Shanghai in China is 4500km from Kashgar, while Gwadar port is hardly 28 km from Kashgar. So, through CPEC, China stands associated with the adjacent Gwadar port.

Being the largest part of the globe, Asia comprises a number of landlocked countries whose access to the sea via their land routes is quite expensive. Such countries look for the shortest possible routes to carry out cheaper international trade. Eastern seaport Shanghai in China is 4500km from Kashgar while Gwadar port is barely 28 km from Kashgar. Therefore, through CPEC, China stands connected to the nearest Gwadar port. This route has also provided effective approachability to landlocked Afghanistan and Central Asia for marine trade. An alternative route of Gwadar port has an evident and affordable strategic advantage to China in any barricade of Chinese trade in the Strait of Malacca. Here it is also important to mention that 60% of Chinese oil imports are from the Middle East; therefore, the existence of Gwadar port decreases the marine distance from 16000 km to 5000 km and the time from 45 days to 10 days. No doubt, Gwadar port is designed to play  an active role in regional connectivity, development of global trade and commerce, as well as the economic prosperity of Pakistan and the whole region.  It is also fictitious to talk about scompetition between Gwadar and Chahbahar ports. In fact, Gwadar port complements Chahbahar for having its potential to handle heavy shipments due to its deep sea. Iran itself anticipates joining CPEC; therefore, the prospectus of trilateral cooperation (China-Pakistan-Iran) would strengthen regional connectivity and geo-strategic integration.

For Pakistan, Gwadar’s industrial free trade zone is possibly the economic instrument that can augment its economy. The 923-hectare zone will be a progressive outlet that will be advantageous for South Asia, Central Asia, and the Middle East. Recently, Prime Minister of Pakistan, Imran Khan, executed phase two of the Gwadar Free Zone (GFZ) and launched multiple development and infrastructure projects. These projects included construction of Gwadar Fertiliser Plant, Gwadar Animal Vaccine Plant, Henan Agricultural Industrial Park, Hengmei Lubricants Plant, Gwadar Free Zone Phase 2, and Gwadar Expo Centre. Because of the Gwadar port, Pakistan can also urge Middle Eastern countries to capitalize in the South Asian country, particularly in the fields of oil, refinery, and associated sectors. It will be a win-win proposal, which will be beneficial for the whole region.

Currently, Saudi Arabia is the chief oil contractor to China, and Kuwait features among the top eight oil sellers to China. By instituting a refinery and other facilities in Pakistan, both Saudi Arabia and Kuwait can augment their revenue margins. It will also generate prospects for Pakistan to grow the refinery and connected business. China will be profiting from importing oil and other products at a lesser cost and through a safe route. Briefly, the investment from ASEAN and Middle Eastern countries will benefit Pakistan on numerous fronts, and these countries will be benefitted in the same way.  China-Pakistan Economic Corridor (CPEC) is an exclusive project for economic integration and political cooperation. It has become a center of trade and manufacturing after the development of Gwadar Port. Evolving opportunities with expeditions such as extensive roads, railways, ports, and energy infrastructure, CPEC is the real game-changer in the background of regional geo-economic and political veracities.

In short, CPEC has attractive possibilities for investment developing from an economic collaboration between the two growing powers of Asia: China and Pakistan. CPEC is a massive land and sea project, which could totally alter the geopolitical and strategic scene of Asia. Gwadar being the central point of the project, has immense potential to reform the economic outlook of the region. Without any doubt, CPEC as a whole and Gwadar, in particular, could be beneficial for millions of people in the region due to economic progress. This can be done by boosting trade connections, improvement and enhancement of technical collaboration, creation of new job opportunities, and by fastening the sociocultural connection amongst the people in the region. All these initiatives can result in an economic revolution, which will bring a successful transformation of the future of the regional state. Gwadar is a hub to unite all the regional players by providing them an opportunity of making the region an integrated one, which is why Gwadar is of greater political and economic value.

The Central Asian countries are geographically situated in Eurasia and deliver exclusive advantages as a primary transport route. Because of their important geo-strategic location and rich oil and gas resources, all international states, including China and Pakistan, want closer collaboration with main reservoirs in Turkmenistan, Uzbekistan, and Kazakhstan. All these five countries aim to enter the sea and expand the energy sources that can only be achieved through the CPEC initiative, and Gwadar is the focal point. The CPEC project wills also bringing many opportunities for the CARs economically.

Pakistan will facilitate the transport by transit trading and pipeline routes of its natural energy resources by CARs. Its products may be exported to the Middle East and European countries through Gwadar port. Once all activities are operational, landlocked CARs can take advantage of this route of access to international markets and the global community. China is part of numerous infrastructure projects in the Gwadar deep-water seaport. It has signed a long-term lease for the management of this port. This widespread and long-term connection will permit China to use Gwadar as a supply and maintenance facility for its naval possessions. Additionally, the connection of Gwadar to the CPEC network will augment China’s ability to transport goods from this route.

Linking CPEC via Gwadar to regional countries could be an incremental procedure, starting with Afghanistan. Moreover, the destinies of Pakistan and Afghanistan are knotted due to historical and cultural links. The CPEC Authority chairman Lt.Gen. (R) Asim Saleem Bajwa revealed that “The Ramadan-Gabd Crossing Point near Gwadar is active and fully functional now; fencing work with Pakistan-Iran border is going on rapidly and new border markets are being established at the crossing points,”.

In nutshell, Gwadar is not only the point of connection for resources-rich regional countries, but it will further strengthen linkages among various regions.

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About Saima Zaman 32 Articles
Writer is the Assistant Editor ‘Mélange int’l Magazine’, ‘The Asian Telegraph’ & Project Coordinator (COPAIR); a degree holder in communication & media sciences.