Trade is very important for the economic development of a country. Since most of the world’s land areas are connected by sea and shipping of heavy goods is possible only by ships That’s why more than 80% of the world’s trade is done by sea. There are many ports in the world for sea trade. For example, Dubai, Singapore, Hong Kong, Shanghai, and Los Angeles are considered to be important business and trade centers in the world due to their modern seaports. The presence of a port not only accelerates the commercial and business activities of a country, but the port’s own income in terms of logistics, container handling and rent can also reach billions of dollars. According to an estimate, in 2022, Dubai generated about $17 billion in revenue through its port alone. Friends, Gwadar port in Baluchistan province of Pakistan is of great importance due to its location and unique features. History of Gwadar at the time of establishment of Pakistan, Gwadar was not a part of Pakistan, but it was owned by the Government of Oman. Pakistan’s attention was drawn to Gwadar soon after the partition of India. There were two reasons for Pakistan’s interest in this coastal area of Arabian sea, economy, and defense in 1958, the then Prime Minister of Pakistan, Feroze Khan, made a deal to purchase Gwadar from the Sultan of Oman for 5.5 million US dollars. In 1993, the Government of Pakistan launched a plan to transform Gwadar into an international port and connect it to all major highways and railways of Pakistan. In March 2002, development work started at Gwadar under the government and today the port is almost functional.
Location of Gwadar. Gwadar is one of the most important cities on the world map which is located on the shores of the Arabian Sea. Geographically, this coastal city connects the eastern world with the western world and divides the world’s population into two parts. Gwadar port is located at the tip of the Persian Gulf and the Gulf of Oman, while the Strait of Hormuz is located on the edge of the Persian Gulf. The Strait of Hormuz is an important hub for global oil transportation, and one-third of the world’s oil is shipped through this route. More than 60 ports of Dubai, Oman, Iran, Iraq, and Saudi Arabia are in this region. Going west from China and East Asia, Gwadar comes at the entrance to all these ports. In addition, the port also forms an important link between energy-rich Russia and other Central Asian countries and the Arabian Sea. It is also very important here that Asian and African countries are the most important markets in the world due to their large population. Trade with countries in Africa and the Middle East is possible for Russia only through Iran’s Chabahar port and Pakistan’s Gwadar port. As such, Gwadar is a very important location for global trade and transportation, especially in the energy sector. Friends, there are many countries around Pakistan which are surrounded by land, called land locked have no sea route for trade. The construction of Gwadar port has also provided a trade route to landlocked countries including Uzbekistan, Tajikistan, Kyrgyzstan, and Afghanistan. That is, due to its location, Gwadar Port is opening the way for development not only for Pakistan but also for many other developing countries.
If trade with China, Russia and Central Asian countries starts through Gwadar, it is estimated that more than 80,000 cargo trucks and containers will move between Gwadar and these countries every day, with a possible income of 20 to 25 billion rupees for Pakistan, only from toll taxes Deep water port Gwadar port is one of the largest and deep-water ports in the world. Friends, a deep sea, or deep-water port is different from other normal ports. These ports are designed for large ships carrying heavy cargo. For a port to be classified as a deep-water port, the water depth must be 10 meters or more. The deeper the sea, the larger cargo ships can anchor at this port. In ports that are not in deep water, large ships anchor off the coast in a deep place and then small boats take their cargo to the shore. This work not only requires extra time and effort but also requires extra cost. Since deep water ports allow ships to approach the shore and dock or anchor, these ports also have pipelines, pumping stations, service platforms and ship maintenance facilities. Apart from this, these ports are also equipped with all kinds of equipment to deal with any emergency. Among the world’s largest deep seaports, Shanghai Port in China has a maximum depth of 15 meters, Singapore Port has a maximum depth of 16 meters and Jebel Ali Port in the United Arab Emirates has a maximum depth of 17 meters. Gwadar port has a unique position, that the natural depth of the sea here is around 15 meters, which is also being planned to be deepened to 20 meters in the future, so big ships can also dock here.
In addition, the natural hammerhead at Gwadar plays an important role in preventing seawater erosion, making it easier for large ships to access the port. Warm water port. Gwadar port is also called as warm water port A warm water port is a port that does not have ice in its waters and is accessible throughout the year as it is in a relatively temperate climate.
In contrast, ports located on colder waters have ice that makes trade difficult and not possible throughout the year A warm-water port that is usable year-round and is close to major waterways reduces transportation time and cost and is more advantageous defensively and economically. Similarly, if a port itself is usable all year round, but if the roads leading to it are thousands of kilometers long and mostly blocked by ice, then the port will not be very useful. In this sense, the port of Gwadar has the advantage that it is itself located in warm water and most of the roads connected to it are open for traffic throughout the year, so that trade can be conducted through this port throughout the year. Significance of CPEC and Gwadar Besides Pakistan, Gwadar port is important for many countries in Central Asia and Middle East, but its most strategic importance is for China. For China’s defense, commercial and regional interests, this port is its lifeline. The $65 billion China-Pakistan Economic Corridor (CPEC) was also launched in view of this importance and is an important part of China’s One Built One Road initiative. But here the question arises, why is this port so important for China? The short answer is that this port provides a relatively small trade route from China to the Middle East, Africa, and Europe. 60% of China’s energy resources reach China through the Persian Gulf, usually through the Strait of Malacca, for which Chinese ships must cover about ten to twelve thousand kilometers. However, through Gwadar port, this sea distance will be reduced to only 3000 km. Similarly, China mostly uses the same sea route to transport its products to the rest of the world. So, through Gwadar port China will get a short trade route which will save time and capital.
Through trade on this route, China will save 20 billion dollars annually, while Pakistan will be able to earn 5 billion dollars from this trade corridor. Moreover, the presence of US naval bases in the Straits of Malacca is also a concern for China and China needs an alternative route in view of the closure of this route or any possible war in the future. Gwadar port is the best alternative in this regard. Due to its strategic location, the sea adjacent to Gwadar is also very important from a defensive point of view. Some experts also believe that in the future, China also wants to build its own naval base in Gwadar, which will help protect its maritime interests in the region. However, it has not been officially confirmed by any of the countries.
Besides, the earnings from the port will also be very profitable for China. According to the agreement between the two countries, a state-owned Chinese company China Overseas Port Holding Company will take over the operations of Gwadar port for a period of 40 years. This company has also been building port infrastructure since 2013. Under the agreement, the company will retain 90 percent of the revenue from Gwadar’s marine operations and 85 percent of the revenue from the management of the Gwadar Tax Free Zone. Apart from this, they will also benefit from tax exemptions that Pakistan has given to Chinese companies for projects related to the China Pakistan Economic Corridor (CPEC), which are building transport infrastructure from Gwadar to the Chinese border. Gwadar Development Projects.Gwadar has always been a backward area and most of the population here is based on fishing. There is severe lack of electricity, drinking water, internet, and basic infrastructure. Therefore, along with the establishment of Gwadar port, it is also important to ensure numerous other facilities here to attract foreign investors. As soon as the Gwadar port became functional, various development projects have been started here A modern-style smart city for citizens’ accommodation is also part of the Gwadar master plan, under which provision of electricity, water, gas and other needs will be ensured in the city. A 300 MW coal power project has been approved to meet the power demand, while clean drinking water will be provided through a desalination plant. Apart from this, the latest optical fiber is being laid to provide high speed internet. Pakistan’s largest airport is also under construction at Gwadar, which is expected to open in September 2023. Construction of a 19 km long central highway named Gwadar East Bay Expressway has also been completed It aims to connect the port with the national highway network for easy movement of import, export, and transit goods. To attract foreign investors, the government has also introduced the Gwadar Free Zone where investors will have full tax exemption in business, and buyers and sellers can trade directly without any middlemen. Phase one of Gwadar Free Zone was spread over 60 acres which has been completed while its phase two is spread over two thousand acres and is under construction. High-tech industries, science and technology parks, hospitals, educational institutions, training institutes, shopping centers, cinemas, theaters and five-star hotels will be built in Gwadar Free Zone. According to an estimate, Gwadar Free Zone is expected to generate economic activity worth 10 billion dollars annually and thousands of new jobs will also be created through it. By 2030, the annual per capita income of Gwadar citizens is expected to be around twenty to twenty-five thousand dollars, which is ten times more than the average per capita income of Pakistan.
Tourism Gwadar city will not only become an important commercial center in the future due to its port but also a tourist center due to its beauty. Surrounded by the sea on three sides, this city is one of the most beautiful coastal cities in the world due to its blue water, rocky cliffs, scenic beauty, and historical heritage. In short, the establishment of Gwadar port will speed up business and economic activities at the regional and national levels, which will not only be beneficial for Gwadar city, but will also play an important role in the economic development of Pakistan.
Overall, the expected financial benefits of Gwadar Port for Pakistan are significant. According to an estimate, through Gwadar port, Pakistan can earn up to 10 to 15 billion dollars annually in terms of services and rent alone. While the income from other business activities related to this sport will be in addition to this. Undoubtedly, this port has the potential to transform Gwadar city into a Dubai and Singapore style city. However, it is very important to note that the success of this port will depend on factors like political stability, law and order, foreign investment, and international geopolitics.
Writer is Student of School of Politics and International Relations Quaid e Azam University Islamabad. He can be reached at [email protected]