CPEC and Real Gwadar – Gateway of Wind
Globalization has transformed the world into global village in the real sense of the term. Gwadar is a strategic warm water deep sea port that would bring about a positive economic impact not only on Pakistan but the entire region in terms of CPEC. By virtue of its geo-economic, geo-political and geo-strategic importance, Gwadar port is also projected to play a major role in the socio-economic development of Pakistan and the enhancement of regional connectivity. Besides, it would also create some opportunities and challenges for Dubai port and its potential economy.
The strategic importance of Gwadar and Dubai ports is patently clear from the fact that these sea trade centers are located at the cross junction of international sea shipping and oil trade routes. Moreover, both are economically and strategically vital chokepoints which provide unhindered access to the India Ocean where about 100,000 ships traverse yearly and 70 percent of the world’s petroleum trade passes. It is also home to 65 percent of the world’s raw material, 31 percent gas and over half of the world’s oil exports.Many Central Asian states have also expressed interest in becoming part of the corridor.
CPEC is the crown jewel in the new Pakistan economic paradigm According to some geo-strategic analysts, Gwadar port would immensely benefit all the Gulf countries including Dubai. China is rapidly expanding its economic and military relations with all the Gulf monarchies. Therefore, these Arab countries will be the biggest beneficiaries of the China-Pakistan Economic Corridor (CPEC), which links Chinese city of Kashgar to Gwadar Port. The CPEC will shorten the transit distance of Chinese products to gulf countries from 12,000 km to 3,000 km. As a result, Gwadar port could help the Gulf countries in increasing their economic and military ties with the rising China.
The current figure of Sino-UAE bilateral trade stands at around $54.8 billion, but the CPEC would help these countries double this amount. Dubai’s biggest non-oil trade partner is already China with around $50 billion annual trade. This might increase greatly if foreign direct investments are made by UAE-based companies in Gwadar’s Free Trade Zones (FTZ).
The UAE’s position at the crossroads between Asia, Europe and Africa has made it extremely important to China. The UAE is a big and key supporter of Chinese One Belt, One Road strategy. It also became a founding partner of the Asian Investment and Infrastructure Bank (AIIB). The UAE is at the centre of Beijing’s plans for economic expansion and growth, and China has long viewed it as a major partner for cooperation in the Middle East and the Gulf. In this context, Gwadar port will tremendously incentivize China to foster cooperation in energy, finance and investment projects with all the members of UAE.
The FTZ being developed by the Chinese Over Seas Port Holding Company (COPHC) at Gwadar is a big opportunity for Gulf-based industries to diversify their assets, seize the opportunity and invest in Gwadar’s FTZ.
The potential geographical reality that would attract investors from Dubai is the exceptionally important location of Gwadar. Gwadar will connect energy-rich Central Asia, resource-rich Afghanistan and western China to the rest of the world. Moreover, international traders would flock to Gwadar due to imminent massive investments by of a range of Chinese companies and other countries in Gwadar city.
It is highly likely that Gwadar would outsmart, outclass and outweigh Dubai in the foreseeable future due to its relatively more important geo-strategic, geo-political and geo-economic location. 300 feet avenues and huge infrastructure’s foundations have been laid out. It’ll be greater than Dubai in times to come. The reason behind that is not only China, but interests of other nations as well such as Iran, Russia etc. Harboring the third largest deep sea port in the world, rests assure that there is a lot of potential in Gwadar.
It depends on Pakistan and its allies how much of that potential is materialized. I believe that in 2025 there would be a significant change in the Gwadar and the prices will have skyrocketed to a point that only a handful of the rich would be able to afford it or people from other countries. Business potential is enormous once the port opens, you would need industries like shipping, oil exploration and extraction, hotels and resorts, tall buildings for office spaces, logistic support, mineral exploration, construction and building, and the list keeps going.
The Pakistan government has formed a special security division called ” Gwadar Safe City Project ” comprising 1,200 strong security personnel highly trained to protect Chinese engineers and workers, and to secure multi-billion Chinese investments in Balochistan’s port city of Gwadar as well as special Marine Battalion has been raised for security of Gwadar, Chinese engineers and delegates visiting the port.
The security is not only foolproof, it is also equipped with the most sophisticated technology that has immensely helped Dubai in maintaining law and order to the maximum.
The main responsibility for securing the corridor, vital to Pakistan’s long-term prosperity, lies with a new army division established in the last few months and numbering an estimated 13,000 troops. Pakistan Army leaving no stones unarmed to protect Chinese & the city Gwadar. A heavy police presence, guarded convoys, new checkpoints and troop reinforcements have turned parts of the southern port city of Gwadar into a fortress. The armed forces and interior ministry have sent hundreds of extra soldiers and police to Gwadar. The army has announced the creation of 10,000 man special force for protecting the development projects. The new force named the Special Security Division, will comprise nine army battalion & six wings of paramilitary forces, the Rangers and the Frontier corps.
Pakistan`s Gwadar deep sea port has vivid prospects to emerge as regional trade and energy transportation hub. Gwadar is strategically located between three increasingly important regions of the world: the oil-rich Western Asia heavily populated South Asia and the economically emerging and resource-rich Central Asia.
More important is Gwadar’s proximity to the Persian Gulf. It is situated near the Mouth of this strategic body of water, and about 400 km from the Strait of Hormuz, through which about 40% of the world’s oil tankers pass. This corridor will incorporate 2,000 kilometer transport link between Kashgar in northwestern.
China to Pakistan’s Gwadar port on the Arabian Sea near the border with Iran via roads, railways and pipelines. It also involves road and railway construction including an upgrade of the 1,300-km Karakoram Highway, the highest paved international road in the world which connects China and Pakistan across the Karakoram mountains. Gwadar has been announced as a Free Trade Zone for 40 years.
Gwadar – The Game Changer
It is a game changer project which will transform the fate of Pakistan and will help Pakistan modernize. It will improve the economy and trade, enhance regional connectivity, overcome energy crises, develop infrastructure and establish people to people contacts in both the countries. China was regarded as a sleeping giant in earlier decades.
But now, China is playing a core role not only in the Asian region but in the entire world. Being the largest country in the world population-wise and fast becoming economically as big as it is demographically.
Pak-China ties have kept growing and have strengthened ever since 1951 when their friendship began. With the support of China, Pakistan has gained significant importance not only in the region but the entire world. In recent years, both China and Pakistan have been making concerted efforts to revive the historic Silk Road which is one of the oldest known trade route in the world and will provide a route for trade from Kashgar (China) to Gwadar (Pakistan). China-Pakistan Economic Corridor plan gets successful after the research of from thousands of PHD’s will help Pakistan to become one of the most strategically important countries in the region.
The Concept of One Belt and One Road The “One Belt One Road” concept has international strategic importance. The One Belt One Road initiative covers countries and regions with a total population of 4.4 billion and a total economic volume of US$ 21 trillion, 63 percent and 29 percent respectively of the World’s total. According to the assessment of the Corridor, the plan is involved in laying the foundation for regional cooperation, improving economic growth, offering trade diversifications, investing in transportation, mining and energy sectors and creating political flexibility. It is a vision with world-changing implications, an unfolding plan that would weave much of Asia, Europe, Africa, Oceania and the Middle East much more closely together through a patchwork of diplomacy, new infrastructure and free trade zones.
Gwadar is located on the Gulf of Oman close to the entrance of the Persian Gulf,about 460 kilometres west of Karachi.The road links Karachi with several ports along the coast including Ormara,Pasni, Gwadar and will be extended to the Iranian border in the future. The highway has reduced travel time to Karachi from 48 hours to only 7 hours.
Pakistan is focusing on laying the Havelian-Kashghar (China) and QuettaKandahar (Afghanistan) railway tracks.
The network of Gwadar deep sea port’s emergence as regional trade and transportation hub 99 roads connects with China through the Indus Highway. Pakistan, China, Kazakhistan, Kyrgizstan and Uzbekistan are developing extensive road and rail links from Central Asia and Xinjiang to the Arabian Sea coast.
Pak-China Bilateral trade & Economic ties
China and Pakistan have developed strong bilateral trade and economic ties and cooperation over the years. China has gradually emerged as Pakistan’s major trading partner both in terms of exports and imports. Bilateral trade and commercial links between the two countries were established in January 1963 when both signed the first bilateral long term trade agreement
CPEC is an under-construction mega-project which will achieve the political and economic objectives through trade and development and will also strengthen the economic and trade cooperation between the two countries.
The CPEC, the construction period for which is from 2014 to 2030, has integrated links with the Chinese One Belt, One Road and an extension of China’s proposed 21st century Silk Road initiative. Implementation of the projects under the CPEC has been divided into three phases. The short-term projects are estimated to be completed by 2017; midterm-term by 2025, and the long-term by 2030. The overall construction costs are estimated at $46 billion. It is the network of highways, railways and pipelines to transport oil and gas.
The first phase comprises development at Gwadar Port and the construction of an international airport. It will be completed in 2017. The Karakoram Highway connecting the two countries will also be widened, while the rail network between Peshawar in the north and Karachi in southern Pakistan will be upgraded. The two countries also have a plan of fiber-optic communication links.
Gwadar port will be connected with China’s western province of Xingjiang through rail and road links. China eastern seaboards are 3,500 km away from the city of Kashgar in western China while the distance from Kashgar to Gwadar port is only 1500 km.
Geography of China Pakistan Economic Corridor in Pakistan this project will run through most of Pakistan starting from Gwadar in Balochistan and ending in Kashgar in western China, while passing through parts of Punjab, Sindh, Balochistan, Khyber Pakhtunkhwa provinces and GilgitBaltistan in northern Pakistan to reach the Khunjrab Pass and beyond to China. Pakistan has prepared a plan to construct three corridors after active consultation with the Chinese authorities; these are the eastern alignment, the central alignment and the western alignment.
The eastern alignment of the corridor originates from Gwadar, travels parallel to the Makran Coastal Highway eastwards (towards Karachi), and then after passing through parts of interior Sindh, and southern, central and northern regions of Punjab, it reaches Islamabad. From Islamabad, it extends to Haripur, Abbottabad and Mansehra districts of the relatively peaceful Hazara Division in KP –this part of the corridor will also run through Muzaffarabad, the capital of Azad Jammu and Kashmir–and reaches Khunjrab after 150 Pakistan Vision passing through Diamer and Gilgit areas in northern Pakistan. The corridor will also run through the Pamir Plateau and Karakoram mountains. A link from Taxila through Peshawar and Torkhum will connect the eastern alignment of the corridor to Jalalabad in Afghanistan.
Regional connectivity with India through the eastern alignment is designed to be provided through the Hyderabad-Mirpurkhas-Khokhrapar-Zero Point link and the Wagha border, Lahore.
Western alignment was the original alignment which the government says has been deferred until the eastern alignment of the corridor is completed. According to the western alignment plan, the economic corridor (highway and railway) starts from Gwadar and runs through some southern and eastern districts of Balochistan (Khuzdar and Dera Bugti, respectively), and some districts in South Punjab to reach D.I. Khan in KP. From D.I. Khan, it further extends to Islamabad and Abbottabad and from there onwards, the route is the same as in the eastern alignment. The western alignment will have an additional regional connectivity link to Afghanistan through Chaman and will connect with Iran through Quetta-Kho-e-Taftan link.
All provincial capitals are included as nodes, the key corner stones of CPEC on which it will be constructed. These nodes are at Peshawar, Islamabad, Lahore, Sukkar, Karachi, Gwadar and Quetta.
Benefits for Pakistan
Pakistan has been playing a significant role in South Asia. After the completion of China Pakistan Economic Corridor; economic, commercial as well as geostrategic environment will improve in Pakistan. It will help Pakistan in dealing with the problems of poverty, unemployment and inequities of undeveloped provinces. During his meeting with President Xi Jinping, President Mamnoon Hussain said
“The China Pakistan economic Corridor would prove to be a game-changer in the whole region by generating massive trade and economic activity and opening new vistas of progress and prosperity for the people of the two countries and about three billion people of the region “.
CPEC from all counts will prove a game changer and will make China a real stakeholder in Pakistan’s stability and security. It is a win-win situation for both. It will greatly expand the scope for the sustainable and stable development of China’s economic development. Investments by China will boost Pakistan’s $274 billion GDP by over 15%.Corresponding progress and prosperity in Pakistan and China’s patronage will help Pakistan in getting rid of the decade old labels of ‘epicenter of terrorism’, ‘most 160 Pakistan Vision dangerous country’ and a ‘failing state’.
Pakistan enjoys a more favorable fiscal situation compared to India by reducing its budget deficit to 4.7% of GDP in 2014 (as against India’s 7%) and Pakistan is both competitive and cheaper as an emerging market. China’s economic and military assistance will help Pakistan a great deal in narrowing its ever widening gap in economic-military-nuclear fields with India and in bettering its defense potential.
Ambassador of China to Pakistan Sun Weidong while talking about the corridor said that the setting up of energy, transport, infrastructure and industrial projects under China Pakistan Economic Corridor (CPEC) would benefit all the provinces of Pakistan. He said that the CPEC was not limited to just a road but it will connect the country with a number of motorways and infrastructure projects. He explained that infrastructure projects included Gwadar port, the second phase of the upgrading project of Karakoram Highway, motorway project between Karachi and Lahore, Thakot-Havelian motorway, Gwadar port expressway, Gwadar international airport and Karachi Sukkur motorway, adding further that the project will increase collaboration in areas of energy, finance, commerce, banking, industry and education.
Here are some benefits which Pakistan will take after the completion of CPEC.
Infrastructure development – including the development of roads, ports and highways is another important segment of CPEC. This project basically will improve Pakistan’s 162 Pakistan Vision infrastructure connection with all sub regions in Asia, and between Europe Asia and Africa step by step and will remove all investment and trade barriers for the creation of a sound business environment within the region and in all related countries. After the complementation of this Project, Pakistan will become modernize and then by spreading out markets for manufactured good. The areas adjacent to the corridor would become attractive locations for manufacturing, agricultural and services industries, Small and medium enterprises would be special beneficiaries.
Employment and economic growth expand significantly.57 It will also attract whole world for economic and trade assistances. under which the Karakoram Highway had been identified for the first phase and Khunjerab-Havelian Islamabad section of the road was expected to be completed in three years, moreover, CPEC route would be utilized for the creation of economic and industrial free zones, for which a fresh economic zone working group would be created soon after the upcoming visit to link all the four provinces, AJK, Fata and Gilgit-Baltistan to expand benefits of the initiative across the country.
CPEC is the crown jewel in the new Pakistan economic paradigm because Pakistan has the opportunity to act independently of the western influence especially the US influence as it has proved of late, an irritant factor. CPEC Project will also bring an opportunity to Pakistan for normalization of ties with India, Iran and Afghanistan which will keep balance, strengthen prospects of peace and improve socio-economic status of the people of the region.
Removal of poverty
CPEC is a game changer project which will lift millions of Pakistanis out of poverty and misery. The project embraces the construction of textile garment, industrial park projects, construction of dams, the installation of nuclear reactors and creating networks of road, railway line which will generate employment and people will also take ownership of these projects. 61 Fully equipped hospitals, technical and vocational training institutes, water supply and distribution in undeveloped areas will also improve the quality of life of people.
China will be able to save billions in transport costs and saved time.
Gwadar raised the level of investment from $ 26 billion to $ 46 Billion. He signed 51 agreements/MoUs worth $28 billion, with $17 billion in pipeline spread over 15 years. His visit achieved the milestone of the groundbreaking of historic 3,000 km-long strategic CPEC.
On Going Projects
It includes $ 33 billion worth energy projects such as coal, solar, hydroelectric power projects. These will inject 10,400 MW electricity in the national grid by 2017/18, and hydro power projects. Other projects are fibre optic cable from Xingjiang to Rawalpindi, 1240 km long Karachi-Lahore motorway, metro and bus service in six major cities, up gradation of 1300 km long Karakorum Highway, oil/gas pipelines to connect Kashgar to the seaport of Gwadar, 1,800-km railway line, commercial sea-lanes, special economic zones, dry ports and other infrastructure.
Routes: Three routes have been marked:-
Western route originating from Gwadar will pass through Turbat, Panjgur, Naag, Basima, Sohrab, Kalat, Quetta, Qila Saifullah, Zhob DIK, Mianwali, Hasanabdal, Isbd.
Central route will originate from Gwadar, Quetta, and reach DIK via Basima, Khuzdar, Sukkar, Rajanpur, Liya, Muzaffargarh, Bhakkar, DIK.
Eastern route will include Gwadar, Basima, Khuzdar, Sukkar, RYK, Bwp, Multan, Lahore/Fsbd, Isbd.
It is planned to develop Gwadar into free trade zone with a modern airport on the model of Singapore or Hong Kong . It will be largest, deep seaport, overshadowing Chahbahar and Dubai seaports.
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