Gwadar, once a backward and destitute area, is emerging as a hub of connectivity and development.
Multiple studies have established that after the completion of China-Pakistan Economic Corridor (CPEC) route, Gwadar will be one of the most competitive connectivity hubs in the region and beyond.
China, the Middle East, North Africa and many Western countries will be the major beneficiaries.
The Advanced Journal of Transportation published a study in 2019, which analysed the possible impact of Gwadar on competitiveness and trade of China with six countries namely Oman, Saudi Arabia, France, Kuwait, Germany and the Netherlands.
Findings of the study suggested that travel time would be reduced by 20 days for Oman, 21 days for Saudi Arabia, 24 days for Kuwait, 21 days for the Netherlands, Germany and France by trading through Gwadar.
Furthermore, results of the study underlined that trading through Gwadar Port would assist the trading partners in saving $1,857 for Oman, $1,457 for Saudi Arabia, $1,457 for Kuwait and $1,357 for Holland, Germany and France on every container. It will enhance the competitiveness of each trading partner in external markets. Trade through Gwadar will also create economic opportunities for Pakistan. It has been predicted that Pakistan can earn revenue in the range of $7-8 billion to $10-12 billion annually in the form of services and fee.
The local industry and services sector along the route will also benefit. Job creation will be the additional benefit. Moreover, the Central Asian states are also looking to connect with the world through Gwadar Port. They have shown extreme interest in Gwadar Port and allied facilities.
According to an analysis of the Asian Institute of Eco-civilisation, Gwadar will offer an opportunity to Pakistan to attract foreign investment, especially in the Special Economic Zones and Free Economic Zones in Gwadar.
The analysis highlighted that by establishing industrial units and businesses in Pakistan, Asean countries would be more competitive.
The major contributing factor would be a substantial reduction in the travel time. For example, the travel time from Port Klang (Malaysia), Bangkok Modern Terminal, Pulau Sebarok (Singapore), Bekapai Terminal (Indonesia) and Port of Hanoi (Vietnam) to Hamburg (Germany) is 39.4 days, 43.7 days, 40.1 days, 45 days and 47.1 days respectively.
On the contrary, by using Gwadar, the travel time will go down to only 29.4 days, which will help to reduce the cost of transportation and enhance competitiveness.
Pakistan can also urge Middle Eastern countries to invest in the South Asian country, especially in the fields of oil, refinery and allied sectors. It will be a win-win proposal.
At present, Saudi Arabia is the biggest oil supplier to China and Kuwait features among top eight oil sellers to China. By establishing a refinery and other facilities in Pakistan, both Saudi Arabia and Kuwait can enhance their profit margins.
It will also create opportunities for Pakistan to develop the refinery and allied business. China will be benefiting from importing oil and other products at a lower cost and through a safe route. In a nutshell, the investment from Asean and Middle Eastern countries will help Pakistan on multiple fronts. It will be a good source of jobs for the locals and the youth as Pakistan is home to a large young population.
It will also provide opportunities to enhance exports of goods from Pakistan and add to the foreign currency reserves, which are required to pay back loans of international lenders. These are only a few examples and one side of Gwadar. On the other side, Gwadar presents excellent opportunities for national development, especially in Balochistan. Pakistan is fully cognisant of the fact. Hence, in recent years, it has stepped up its efforts to develop Gwadar and other parts of Balochistan.
A few days ago, Prime Minister Imran Khan visited Gwadar, inaugurated many projects and witnessed the signing of MoUs. The important projects, which were launched, were the Gwadar Expo Centre, a fertiliser plant, an animal vaccine plant, the Henan Agricultural Industrial Park, Hengmei Lubricants Plant and Gwadar Free Zone Phase-2.
Federal Minister for Planning Asad Umar stressed that the Gwadar Free Zone Phase-2 was 35 times bigger than the free zones in phase-1.
Agreements for a 1.2-million-gallon-per-day desalination plant and solar generators grant from China for south Balochistan were also signed.
These all initiatives will create hundreds and thousands of jobs for the local people. Jobs are direly needed in Balochistan as there are not many employment opportunities. These projects will also contribute to improvement in agriculture and livestock sectors in Pakistan through the provision of quality and timely inputs.
The animal vaccine plant will be helpful in controlling diseases among animals, which are hampering export of meat and dairy products.
Areas of attention
However, to benefit from all these opportunities and the potential of Gwadar, Pakistan needs to work on two areas.
First, the country should strengthen the CPEC Authority for smooth cooperation, planning and execution of plans. The authority has proved its worth even during the Covid-19 pandemic and has continued to deliver.
Thus, it is suggested to strengthen it by delegating powers of decision-making and implementation.
The government should make it a focal point for international business and investment opportunities. It should have authority to facilitate in getting the required services, licences and permissions. Second, equal job distribution among the youth and talented people will be another area that requires dedicated efforts.
The government will have to make sure that there is no elite capture of jobs, especially by the retired government personnel and relatives of the ruling class. The engagement of the youth is extremely important, especially in the context of fifth generation warfare. Unemployed youth deprived of opportunities will be a real challenge, which will be beyond the capacity of state to control.
Thus, the government should establish mechanisms, which ensure fair competition and considers special needs of the marginalised people.
The writer is a political economist
Published in The Express Tribune, July 12th, 2021.