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Gwadar port project takes off with brilliant economic future

Published on 28th Dec, Edition 52, 2015


Gwadar port project has actually taken off in 2015 after eight years of its inauguration in 2007. It is the major development with reference to economic development of Balochistan that took place this year. Last month, Pakistan formally handed over the 2,281 acres free trade zone of Gwadar Port to China on a 43-year lease. After the formal handover of the free trade zone, all business affairs of the port will be carried out by Chinese authorities. Pakistani government has already declared Gwadar Port a free trade zone for the next 23 years.

China is deeply interested to pour huge investments in Gwadar, which is located at the mouth of the Gulf and close to the Strait of Hormuz. Prime Minister Nawaz Sharif already said that Gwadar Port would be developed on the pattern of Hong Kong, which is a model as to where the financial successes of Asia are headed.

Being the builder, operator and financer of Gwadar Port and also being the biggest investor in the port city, China can play the role of a major driver of growth in Gwadar as it did in Hong Kong. Having a free market economy, Hong Kong is highly dependent on international trade. China’s share is over 35 percent in international trade.

Strategically located Gwadar Port can be converted into a regional hub of international trade. By virtue of its geography, Gwadar has greater potential, wider scope and brighter prospects to emerge as center of trade and commerce serving at least 20 countries in the Asian region.

In 2010, China declared Kashgar, an important transit point on the ancient Silk Route and a gateway between China and Pakistan, as Special Economic Zone (SEZ). The proposed Kashgar SEZ would develop Xinjiang into a major trading hub and more energy and economic integration with South and Central Asia. The SEZs in Gwadar and Kashgar and the rail and road connectivity between the two proposed SEZs would have great economic, political and strategic implications for the whole region. On one hand, the two countries are working on laying the strategic Havelian-Khunjerab railway track in the difficult terrain of Karakoram connecting China with Pakistan from Gwadar in Balochistan. On the other hand, there are proposals to connect the Pakistan Railways with the trans-Asian railway network that will link the two countries through rail networks. This will facilitate trade to the Central Asian Republics (CARs), Russia and China and beyond.

The port is essential part of $47 billion China-Pakistan Economic Corridor (CPEC), which involves construction of highways, railways and energy pipelines connecting western China with Pakistan and the Persian Gulf.

The two countries signed 51 deals worth billions of dollars mostly relating to the CPEC project. No doubt, a huge investment in infrastructure sector promises a brilliant economic future for the development of the province.

After construction of the proposed rail, road and pipeline projects between China and Pakistan, Gwadar Port will handle most of the oil tankers to China.

In the present age of globalization, Gwadar has greater scope and tremendous potential to emerge as distribution and logistics hub in the region. It is because of its geo-economic importance that Gwadar was highlighted as the future port of global investors at an international conference on ‘Free zones, science and technology parks, enterprise zones’, held in Brussels in 2007. The conference was jointly organized by World Free Zone Convention (WFZC) and World Customs Organization (WCO). The development of road and rail links between the two provinces, Balochistan and Xinjiang, will give distinction to Gwadar Port of becoming the gateway port for western China. Rail link will transfer goods to and from Western China, changing it from a remote region into a station that will transfer goods and commodities worth billions of dollars every year.


Source of development, prosperity

Gwadar Port is an important project, which would help bring Balochistan’s coastal areas into the economic mainstream of Pakistan. It will catalyze the development process in the province bringing it at par with other provinces. Development of an integrated transport system and future road and rail links to CARs and rest of the country will enhance the local peoples’ access to new vistas of development and prosperity.

A fully operational Gwadar Port provides the province enormous opportunities to exploit its mineral resources, which have so far been untapped. Gwadar seaport and the planned regional highway projects will help the province become a world-class mining center. Foreign mining firms in Balochistan have shown keen interest in bringing their cargoes through the port of Gwadar. Besides, serving as transshipment hub, it would promote the development of a refinery and petrochemical complex and other industries. ECO highway, coastal highway and other mega projects in road sector will connect Gwadar Port with Central Asian states, Gulf sheikdoms and rest of the country.

New Balochistan

The port project is expected to flourish a new culture in Balochistan by giving economic independence to the local people. It may bring a revolution in social sector changing the socio-economic conditions of the people and raising their living standards. Many industries have been envisaged to be established in and around Gwadar. The skilled manpower would be needed for the operation of the port and the allied industries.

According to an estimate, the Gwadar Port has the potential to generate over $50 billion in transit trade annually and after becoming fully operational along with strong communication and transport links with Central Asian States, Iran, western provinces of China and commercial cities of the country, an estimated two-third population of Balochistan will become part of port-related activities.

The establishment of Free Trade Zone, and Export Processing Zone (EPZ) will open the doors for development of small, medium and large scale industries generating revenue for the government and providing profitable avenues for both the skilled and non-skilled workforce in Balochistan.

The potential investment areas in Gwadar include fish processing, crabs processing, cold storage, ice factories, sea-water reverse osmosis desalination plants, shrimp farming, boat building and naval architecture institute, oil storage tankers, ferry service for Karachi Ormara-Pasni-Gwadar and up to Oman and Dubai.


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