As reported in a national daily, the Pakistan Government has formally awarded a multi-billion dollars contract for construction of more berths and operation of Gwadar port to a state-run Chinese firm namely China Overseas Port Holding Company (COPHC). According to the contract the Port will remain the property of Pakistan and will be further developed up to 20 berths as well as operated by the COPHC. Previously, the contract to operate the Port was given to the Port of Singapore Authority (PSA).

According to media reports PSA had abandoned the project for the reported reason that Pakistan had failed to meet its obligations under the agreement although it was highlighted in the media reports that PSA failed on its commitment of investing an amount of $525 million in the project in five years on the excuse that its demand of providing land worth Pakistani Rupees 15 billion was not met. Under this back ground, in 2012 the Supreme Court of Pakistan had issued a stay order on the contract of Gwadar Port constraining PSA on transferring immovable property of the Port to a private party. The Supreme Court also allowed the Government of Balochistan to become a party to the case.

In view of Supreme Court’s decision on the subject, based on an offer made to the Balochistan Government in 2010 by China that if given contract of the Port it will construct 20 more berths and make it fully operational, and considering huge economic benefits for Pakistan, China and other regional countries for transportation of trade able goods and hydrocarbons if the expansion and operation of the Port was hastened and made more robust, the contract of the Port has now been awarded to the COPHC.

Awarding of contract of Gwadar Port to COPHC has caught lot of media attention both in Pakistan and abroad. While in Pakistan wide number of members of media, think tanks, business community, government officials and civil society have largely appreciated Government’s this decision due its potential substantial economic benefits for the country, some of the foreign government representatives, think tanks and commentators have shown apprehensions that probably China was interested to use the Port for projecting its naval power in the Arabian Sea and Indian Ocean in the coming decades. As published by the Express Tribune, Pakistan of 18 February 2013, the Indian Defence Minister A. K. Antony commented on 6 February 2013 that India was concerned on Pakistan’s decision of handing over operational control of Gwadar Port to China which has interests in a string of other ports encircling India. According to the New York Times of 31 January 2013, some US strategists have described the importance of Gwadar Port for China as the westernmost link in the “string of pearls”, a line of China friendly ports stretching from mainland China to the Persian Gulf, that could ultimately ease expansion by the Chinese Navy in the region, with Gwadar being close to Strait of Hormuz, an important oil- shipping lane. Andrew Small said that most likely Gwadar Port will be developed by China for naval use.

In fact, as is being understood in Pakistan and China, such perceptions and apprehensions have no relevance since development and use of Gwadar Port is basically meant for trading activities directed to the benefit of all mankind in the region around Pakistan and other regions interested to trade through this Port. In an article written by Declan Walsh, published in the New York Times dated 31 January 2013, Assistant Professor of Asian history at the Lahore University of Management Sciences, Hasan Karrar says, “There may be a strategic dimension to the management transfer of the Gwadar Port to China, where the Chinese want to mark their presence in an important part of the world, I would not go so far as saying this implies a military projection.”

In the real sense the development of Gwadar Port by China for commercial purposes is an indicator that both Pakistan and China prefer the policy of primacy of geo-economics over geo-politics in this part of the world. In this respect it is being thought by both countries that expansion and smooth operation of the Gwadar Port carries major economic benefits not only for Pakistan and China but also for other regional countries such as Central Asian states and even Russia. Therefore both countries’ keenness in Gwadar Port is meant to advance their commercial interests and strengthen their economies. Pakistan is more inclined to draw economic benefits out of operation of this Port quickly with a view to addressing its already fragile economic situation. Therefore for advancing their economic interests both Pakistan and China are aspiring to strengthen regional peace and stability.

For this common objective in mind both countries are interested to develop this Port as an economic hub of the region and not as a naval base. That is the reason that in his remarks at the occasion of contract signing ceremony President Zardari expressed that award of contract to china was a major development in Pakistan-China relations adding that the decision would create new economic opportunities for Pakistan and Balochistan.

The analysts are of the view that the expansion and efficient management of Gawder Port carries lot of advantages for Pakistan and China. Development of the Port and infrastructure around it will create lot of jobs for the people of Balochistan. It will also provide business opportunities for transport, construction and hotels management sectors of Pakistan.

However real benefits could be earned only if the Port city can be connected with country’s main road and rail net works by developing communication infrastructure up to Quetta and Indus Highway. While these projects will provide wider opportunities for investment to China there will also be a requirement to complete the planned widening of Karakoram Highway and construction of railway line from Chinese border to Hasan Abdal.

The completion of expansion of the port and communication infrastructure will also open up lot of vistas for Pakistan’s domestic trade and trade with China’s Xingjiang province and also trade with Central Asian states and Russia as well. Gwadar will be very beneficial for trade of western part of China with the western part of the world since, as compared with the distance of about 10000 kilometers from Gwadar to Arumqi via Straits of Malacca and Shenghai, distance from Gwadar to Arumqi via Gilgit, Pakistan is only approximately 2500 Kilometers. While the development projects related to Gwadar can bring massive China’s investment in Pakistan it will also open up immense commercial activities to the benefit of Pakistani people.

A fully developed Gwadar Port and related infrastructure will provide full impetus to international trade passing through this Port to and from Pakistan, China, Central Asia and Russia providing substantial trade transit revenues to Pakistan which will facilitate its economic development. However for these plans to succeed there will be a need to bring an early peace in Afghanistan and Balochistan.

As an immediate measure Pakistan will have to make fool proof measures for the security of the Chinese citizens working on Gwadar Port as well as on other related development projects in Pakistan.

Since peace talks with the Afghan Taliban are already in progress it is hoped that peace will come in Afghanistan leading to sustainable stability in that country and Pakistan which will facilitate economic development in both countries and also open up trade avenues for the regional countries.

(The writer works for Islamabad Policy Research Institute)

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