Rolling out the Red Carpet

I welcome you to my blog and hope that you will like the tour. Please leave your footmarks with comments and feedback. This will through and through enhance my knowledge and profundity of thought. Enjoy! Asif J. Mir

Sunday, February 8, 2009

Gawadar: A Strategic Partnership

Gwadar, as a seaport platform, was first recognized in 1964 yet it received serious attention in 2001 when China also condescendingly nodded yes to participate in the construction and development of the deep-sea port.

Gwadar, a fishing village of Baluchistan, is situated on the Arabian Sea coast, just 72 kilometers away from the Iranian border. Its proximity with the Persian Gulf and particularly Strait of Hormuz is way off 400 km that highlights its strategic significance. Strait of Hormuz is recognized as a principal water channel for worldwide oil transportation.

The role of China in Gwadar project is substantial and hypostatic. From the total cost of the project as US$1.16 billion, China has committed to contribute near enough $198 million for the first phase. This contribution is somewhere around four times over and above from what Pakistan is flinging around for this phase. This phase comprises construction of three multi-purpose ship berths. China has additionally drizzled $200 million for the construction of a highway networking Gwadar Port with Karachi. The financial aid of China has been supplemented by technical assistance that includes deployment of some 450 engineers and experts.

The second phase of Gawadar Project comprises nine more berths, an approach channel and storage terminals. China will also put up the money in this phase.

Once completed, both Pakistan and China visualize grandiose economic returns from Gwadar port. Project’s contribution to regional peace and stability will also be tremendous. First and foremost benefit, which Gwadar port will spur, to be gleaned by the under-developed Baluchistan. Augmented by infrastructure development in Baluchistan, the Gwadar project will transform it into an attractive investment hub.

Owing to its proximity with Strait of Hurmuz, through which 40% of the world's oil passes, Pakistan looks out for high economic returns from Gwadar port. This is going to be a key shipping point, bringing much-needed income for Pakistan. Once Pakistan completes the networking of its communication system with Afghanistan and CARs, this region will reverberate as a trade hub. Gwadar would provide landlocked Afghanistan and the Central Asian republics direct approach to the sea. These regional countries will thus be able to ship merchandise, oil and gas reserves to world markets through Gwadar port. Gwadar port may be designated as a free trade zone and an export-processing zone, simultaneously.

Gwadar provides China a transit terminal for crude oil imports from Iran and Africa to China’s Xinjiang region. Pakistan’s road and rail links to Afghanistan and CARs will also provide access to China to these markets.

Gwadar port, therefore, attaches great significance for both China and Pakistan. This will de-escalate the pressure on Karachi Port Trust in addition to lending a strategic advantage—India blocked Karachi in 1971 war causing negative bearings on Pakistan’s economy. In 1999 also when Kargil episode came about, India threatened to blockade Karachi port. Gwadar will make 725km far off from India and thus less vulnerable to Indian designs.

Owing to its propinquity to the Strait of Hormuz, Gwadar also promises many strategic prerogatives to China. Some 60% of China's energy supplies come from the Middle East. US that have significant presence in the region threaten these supplies.

From Gwadar, China can also monitor US naval activity in the Persian Gulf, as well as, Indian activity in the Arabian Sea and future US-India naval cooperation in the Indian Ocean.

India keeps in perspective China-Pakistan partnership at Gwadar and China's presence in the Arabian Sea apprehends fencing round by China from all sides. Iran also perceives the development of Gwadar port in its neighborhood as probable erosion of the impact of its ports, particularly Chabahar port that was built with India’s help.

Gwadar port symbolizes the story of two regional neighbors collectively, harmoniously and unanimously working to serve their corresponding strategic, economic and political considerations. Asif J. Mir, Organizational Transformation