Gwadar Port: Challenges and Opportunities

Depleting oil resources and growing energy demands in the world has increased the Pakistan’s importance manifolds. Energy and trade route from Central Asian republics, China and Afghanistan will have to pass through Pakistan. These countries desired for warm water access since a long time. If Pakistan enjoys any kind of geopolitical importance in the region, it is largely due to the geo-strategic importance of the southwestern province of Baluchistan. The province is situated at the coast of South Asia, Central Asia and Middle East.

Importance of Baluchistan is due to its longest coastal line of about 760km, known as Makran Coast. The coast of Makran stretches itself from Gadani near Karachi to Iranian Chabahar port. For establishment of Naval as well as commercial ports it is a suitable place. Presently the important ports established at the coast of Makran are Karachi, Bin Qasim and Gwadar whereas Ormara, Pasni and Jiwani are some of the important naval bases situated at the coast of Makran. These bases are a provision to the opportunity to monitor the Indian Ocean as well as acting as a listening post. In case of crisis with India, development of Gwadar port provides Pakistan with long awaited strategic depth for its Naval and commercial resources. Gwadar is located very near to the Indian Ocean highways. 80% of world trade carrying oil and raw material to Europe, America and Far East passes very near to Gwadar. Therefore Gwadar is located strategically at a place to create a hindrance in smooth flow of the commercial trade. India and US see the incredible investment by China in the Gwadar port with the same perception. Since China is in process of strengthening its foothold in Indian Ocean by establishing ports starting from China Sea to Persian Gulf.

Gwadar is situated at the juncture of three regions namely South Asia, West Asia and Central Asia. It is expected that it will become a terminus point of trade and energy corridor emanating from Central Asian Region. It is viewed that Gwadar port will bring forth the economic and strategic advantages as well as it will secure Sea lines of Communication in Indian Ocean in relation to the International Trade.

Gwadar port at the coast of Makran is expected to add new color to Pakistan’s economic and social life. Gwadar port has strength to revive the economy of Pakistan. It will provide an economical route to the world for the flow of Central Asian natural resources along with easy access to the growing consumer markets of Asia.

The Gwadar deep-sea port will have the potential to generate over $50 billion in transit trade annually in future. It was estimated that two third of population of Baluchistan will become part of port-related activities whenever it will fully operationalize along with the strong communication and transport links with Central Asian Republics, Iran, China and commercial cities of Pakistan. This mega project will generate job opportunities for thousands of people, having potential to handle ships over 50,000 tons weight. There is no denying fact that it will attract the investors and also open the new ways of economic development in the coastal region and will generate revenues in the national economy by overcoming the challenges particularly security. The port has become a much needed requirement for the nation in the wake of rise in cargo traffic at existing ports. Besides the economic gains this seaport will facilitate the regional country with political benefits, especially the landlocked states. When Gwadar port will put into the operation then Afghanistan will be the one who will have direct beneficiary by accessing it for its trade as well as getting royalties when the gas/oil pipeline is materialized. The development of the Gwadar port would act as a gateway to the peace and prosperity of the region. It is the need of Pakistan to keep Afghanistan engaged to facilitate the smooth and economical running of the port.

The strategic interests of all nations rooted out from the economic interests. Gwadar which has a potential to act as a hub port will facilitate the convergence of interests in all states, bringing peace and prosperity to the area. Gwadar port has a huge consumer market of Asia with over one third of world population strategically located at the cross roads of natural resources. Gwadar port will be able to attract its share of trade to cargo and natural resources. There are huge possibilities to establish joint ventures and develop economic cooperation in the fish and sea food processing industry, oil and gas exploration, and exploration of many minerals.

The reopening of ancient east-west trade corridors across Pakistan and the expansion of new ones coming south from China will break the isolation that has been Pakistan’s fate since its founding. A major force stifling policies that might foster continent-wide transport and trade is a poverty of strategic imagination in many quarters.

The new Gwadar deep-sea port on the Baluchistan coast and the highways connecting it to Afghanistan reduce the distances of Pakistan-Central Asia traffic by about 500 km. Continuing instability in the Persian Gulf has led the ADB to consider the strategically located port of Gwadar as an alternative to Persian Gulf Ports.

Although there is an enormous quantum of trade that might flow through the Gwadar port, the tough and challenging task which it has to face is to compete with the developed ports of the region. For creating a conducive environment for industrialization of the region requires concerted efforts based on strategies, program and scientific approach along with efficient directions to make it a competitive and comprehensive project. If there is no cooperation among the regional and extra regional powers, there will be no security.

The prime objective of Pakistan’s foreign policy is to develop strong and beneficial relations with all major powers and maintain cordial relations with her neighboring states. But the ultimate success of the port relies on its use by the CAR’s (Central Asian Republics) and cooperation with Afghanistan , which lies between Pakistan and Central Asia, is critical. The need is to address the genuine grievances of the stakeholders, if any, regarding the various projects in Baluchistan especially Gwadar port. Measures/ steps should be taken to create the local stakes for the development of the province as well by removing the sense of alienation of the people of Baluchistan, if any. The exclamation of trade which is expected to flow through the Gwadar port suggested that the port can generate various revenues, provide economic and foreign policy options which will handle properly.

It is facing many challenges which can be local, regional or international as it is a mega project with long and short term local and regional impact. At this time it is the requirement of the province is to improve the security situation for full pledge utilization of the port. The ripple effects of Afghanistan’s imbroglio are also felt by Baluchistan, the province of Pakistan.

The threat of militancy and insurgency in the region has further provoked the instability in the north western Pakistan. Though the whole federation is under the spell of terrorism but its impact is very much visible in FATA, Baluchistan and KPK. Requirement is to reconcile the divergence of interests of the regional and neighboring countries.

Security and development are two facets of the same coin and reciprocate each other. One without the other is highly unlikely. Regional development and cooperation is basic component of all regional organizations like ECO (Economic Cooperation Organization), SCO (Shanghai Cooperation Organization) SAARC (South Asian Association for Regional Cooperation). Regional and great powers have interests in peace in the region and for this physical infrastructural integration creates conducive atmosphere. The South and Central Asian Region are rich in natural resources like hydrocarbons. Multinational Corporations as well as powers both regional and global are taking keen interests in the oil and gas resources of the region.

The new geo-politics or what some observers call the New Great Game is also influencing the developments in the region. After 9/11 USA and its NATO allies have invaded Afghanistan and ousted Taliban from the corridor of power. Regional and neighboring countries supported USA in its war against terrorism. Russia, China, Central Asian Republics, India and Pakistan supported USA in war against terrorism. Russia consider Central Asia as its near abroad while China is strengthening its relations with oil and gas rich Central Asian States. Its domestic energy resources are insufficient for its fast growing energy needs. Central Asian transportation routes are directed towards Moscow. After the disintegration of USSR CARs are struggling to develop routes towards South Asia, turkey and China. The energy requirements of the regional powers will bring them to agree on projects like TAPI (Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline) and IPI (The Iran–Pakistan–India gas pipeline). Northern outlets and transportation routes are not sufficient for export of the Central Asian hydrocarbons and the alternative lies in the south particularly through Afghanistan and Pakistan and this is a point of convergence which can be developed. For that Gwadar port can play a significant role.

If completed and launched, Gwadar will make Pakistan a very modern country and make the commercial activity so powerful that we will stand shoulder to shoulder with U.A.E and even Singapore. The construction of Gwadar port is therefore critical for the economic development of Pakistan. But the games played at the international arena by world powers and threatening neighboring countries of Pakistan as well as the apathy of our political leadership in making and implementing the policies are the main hurdles in the success of Gwadar port. Pakistan needs to focus on its international relations alongside defense policy to get the maximum advantage of this potential trade corridor of the region. It will also help Pakistan to move away from perceived isolation. Political and civil leadership, individual and combined efforts are the need of hour.

By Iqra Shahnaz