Gwadar Port opens for Transit Trade

Wikimedia Commons
Wikimedia Commons
19.10.2019

Transportation and communication lanes/routes are some of the most important pre-requisites for balanced development of any country, be it economic, political or socio-cultural development. Pakistan is the second largest country in South Asia and shares its southern border with the Arabian Sea. It's coastline is about 990 km long which is bifurcated in two parts, Sindh Coast which is 270 km long and the Makran Coast which is 720 km long.

Pakistan's vast coastal area opens into the Indian Ocean which gives access to South-East Asia, Africa, the Middle East and beyond. Currently, Pakistan has two main internationally operating deep-sea ports namely the Karachi Port and Port Qasim. Pakistan is a developing country with a huge potential for economic growth. The significance of Pakistan's geo-strategic location provides the country with an added advantage which can be used to harness maximum dividends, especially through international transit trade.

With Pakistan's growing population and a significant increase in commercial activities in the region, the capacity expansion programmes for the two operational ports of Pakistan are unlikely to keep pace with the expected growth in demand which ultimately resulted in the requirement for another seaport to bridge the gap and cater to the contemporary commercial needs.

In line with this thinking, it was deemed necessary by Pakistani policy-makers to construct a third deep-sea port in Pakistan which would ensure the smooth continuity of national development. Given the rising demand for rapid port capacity, plans for Gwadar deep seaport were realised in early 2000s and construction of this project's first phase began in 2002 but the progress was extremely slow due to non-availability of funds and administrative impediments. It was not until 2013, after the announcement of the China-Pakistan Economic Corridor (CPEC), a joint venture of Pakistan and China, that Gwadar Port gained international prominence, as the natural deep seaport became the linchpin of the economic corridor.

Gwadar Port has become the center of attention for many experts, analysts, strategists and policy-makers around the world attracting praise and criticism as well. The port holds significance and value for Pakistan and China alike. For China, CPEC is designed to develop and connect the western provinces of China with the rest of the country's mainland while simultaneously providing the shortest, safest and the most cost-effective land route to Chinese products and goods to the Indian ocean and its adjoining countries. Chinese products and cargos have to cover a distance of approximately 10,000 km to reach the Middle East and Africa. The route is fraught with chaos due to competition and jurisdictional issues between regional countries. Through Gwadar Port, Chinese products and cargos will be able to bypass the eastern route as it will provide quick access to warm waters after a reduced distance of approximately 1500 km. This route is not only short and secure but it is also the most cost-effective corridor for Chinese products to reach the markets of Middle East and Africa.

Furthermore, besides China, the Central Asian Republics (CARs) and Afghanistan will also benefit from the construction of Gwadar Deep Seaport as it will provide these countries with a safe, short and cost-effective transit route to gain access to regional and international markets as CARs and Afghanistan are land-locked countries.

Keeping in view the significance of the Gwadar Port, the construction of the port's initial phases was completed in record time and it was made operational for small cargos. On October 01, 2019, the sub-committee of Pakistani Senate's Standing Committee on Maritime Affairs was informed by the port authorities that Gwadar Port has been made fully operational and has been opened for transit trade.

The most important development recently has been the successful negotiations between the Pakistani and Afghan officials regarding the commencement of Afghan Transit Trade via Gwadar Port and other commercial activities. Moreover, according to the Port authorities, fast preparations are not only contained to Gwadar Port only but work is also being done to complete the Gwadar Free Zone and facilities are being constructed to handle the cargo shipments from the Pak-Afghan Transit Trade as well. The Gwadar Free Zone is expected to be completed by the end of 2019.

The construction of offices, storage hall and cold storage of the free zone are in the last phase of construction and will be completed soon along with the Gwadar Expressway which will be linked with Makran Coastal Highway.

The Gwadar Port is the second great monument of Pak-China Friendship after the Karakoram Highway. With proper management and implementation of expansion programmes, the port is bound to become the region's gateway port and a world class maritime hub as well. It will not only complement the two operational ports of Pakistan but will also stimulate economic growth of Pakistan in general and the province of Balochistan in particular. The port will also contribute to the socio-economic development of Gwadar district and Balochistan province that have been lagging behind as compared to other districts and provinces in Pakistan.

Despite having major international ports as competitors such as that of Singapore and Dubai, incentives like no cargo demurrage charges and month’s long storage facility would definitely give Gwadar Port a competitive advantage and divert business to it.

Seaway transportation is arguably the most cost-effective mode of transportation. It is need of the hour for Pakistan to dedicate attention to its maritime affairs with special attention to the development of state of the art sea ports. They not only act as suppliers of jobs but they also serve significant economic as well as social functions. Ports bring varying degrees of economic benefits and also help in supporting economic activities in a country's hinterland as they offer a special connection between sea and land transport besides providing safe and cheap means of exporting finished goods and importing goods into the country.

Success of Gwadar Port depends upon proper implementation of capacity expansion programmes and efficient administration of operations. Special attention needs to be given to providing security in Gwadar because without proper security measures, foreign direct investment (FDI) and investment by local businessmen will not materialise. Incentives should be offered to the investors, be it individuals or countries in order to encourage more investments and promote commercial activities through Gwadar Port.

 

The opening of transit trade through Gwadar Port is a good sign that things are moving in a positive direction, however, there are many more milestones to be achieved. The future prospects of Gwadar Port seem extremely bright, and provided if matters are handled properly and efficiently, the port will become an international commercial and transit hub, especially for regional countries plus it will compliment Pakistan's economic progress substantially.