Gwadar Port: Geo-economic and

Geostrategic Dimensions
Gwadar has geostrategic significance as it lies on the conduit of three most
commercially important regions of the world. Gwadar has geostrategic
significance as it lies on the conduit of three most commercially important
regions of the world. The oil rich Middle East, Central Asia bestowed with
natural resources, and South Asia having the potential for growth, for this
century.

The awarding of the multi-billion dollar contract for construction and operation of Gwadar Port
to China Overseas Port Holding Company (COPHC), a state-run Chinese firm, in February this
year, has added a new chapter in decades-long Sino-Pak partnership. The project is mutually
beneficial for both countries in the region for it will not only give them a corridor for greater
commercial activity but will also bring closer the Central Asian countries. It is also expected to
earn them a great strategic leverage. The recent agreement is the part of a plan to open up an
energy and trade corridor from the Gulf region, across Pakistan to western China.
The transfer of project operations to China caught attention of the international media and
triggered discourse on the economic and strategic shift that the presence of China tends to induce
in one of the world's major maritime zones. Naturally, it raised concerns of major stakeholders in
the Indian Ocean, particularly Pakistan's eastern neighbour, India, and the United States.
It was March 2002, when the groundbreaking of Gwadar Port marked the execution of the
decades-old plan of Pakistan to build a deepwater seaport (Panamax port) at its coastline in
Balochistan province. Highlighting the paramount geo-economic and geostrategic significance of

the port, the then president Pervez Musharraf said:

The Gwadar port shall provide modern, up-to-date facilities for cargo vessels in line with
modern ports. The coastal highway which is also being constructed simultaneously with the port,
will provide a very healthy linkage between Karachi and Gwadar ports. If we see this whole
region, it is like a funnel. The top of the funnel is this wide area of Central Asia and also China's
western region. And this funnel gets narrowed on through Afghanistan and in Pakistan northern
areas into Pakistan and goes through Pakistan and the end of this funnel is Gwadar port. So this
funnel, futuristically, is the future economic funnel of this whole region. All the top of this
funnel, the broad top of the funnel, anything going into it or out of it, Pakistan and Gwadar port
provides the real input, the inlet and the outlet into it. There is no doubt that Gwadar port, when
operational, will play the role of a regional hub for trade and commercial activity.
The port was established with the help of a Chinese construction company and the first phase of
the project was completed with initial investment of 248 million dollars in a record time of four
years. After completion of the first phase of the project, the operational contract was given to the
Port of Singapore Authority (PSA) through open bidding in 2007. Owing to some unforeseen
reasons, the PSA expressed reservations on investing the agreed amount in five years time. Also,
it failed to operationalize the port as expected and agreed in the contract. Later on, Pakistan
offered the operational contract to China which the latter rejected.
With the changing dynamics of regional politics and the global shift that has taken places during
past couple of years, apparently, three key factors compelled China to opt for taking the
operational command of the Gwadar port. First, the increasing US influence in the Asia-Pacific
poses considerable economic and strategic challenges to China. Second, Gwadar port provides
China with an alternative route and eases its reliance on Strait of Malacca. Third, the expected
withdrawal of the US forces from Afghanistan by 2014 is going to provide other countries a
room for economic ventures Afghanistan as well as the Central Asian Republics.
The expected withdrawal of the US forces from Afghanistan by 2014 is going to provide other
countries a room for economic ventures Afghanistan as well as the Central Asian Republics.
To the US and India, it's quite a perturbing development. The policy analysts in both the
countries are wary of Chinas greater access to the Indian Ocean through Gwadar as it poses a
challenge to the commercial and strategic interests of the US and India. Some quarters in the US
referred to China's entry into Gwadar as part of its string of pearls strategy which refers to
Chinese Sea Lines of Communications (SLOCs) extending from mainland China to Port Sudan
straddling over Strait of Malacca, Strait of Bab-el Mandeb, Strait of Hormuz and run through
some significant maritime centres, including Pakistan, Sri Lanka, Bangladesh and Maldives. It is
believed that the array of ports that China has established in the Indian Ocean region, including a
port in Hambantota, Sri Lanka; a port in Chittagong, Bangladesh and a port and pipeline
complex off Myanmar's coast in Rakhine region; would help the country maximize its control
over the commercial and naval activity across the Indian Ocean.

Indian concerns are no different than the America's. India is apprehensive of Chinese presence in
Indian Ocean. For couple of obvious reasons, India is also flustered on China's control over a

port in Pakistan. Through Gwadar, China would be in a position to invalidate the India-US
counter China strategy. India also fears that China's growing influence may result in harming
Indian interests. Above all, India believes that the port would enable Pakistan to take control of
more of the world energy circulation and interdiction of Indian sea-borne trade. However, India
seldom mentions its plans to invest profusely in Port of Chabahar in southeastern Iran. The port
was partially built by India in 1990s and is located on the flanks of Indian Ocean and Oman Sea.
Criticism and apprehensions apart, economically, the port is expected to be the hub of trade and
commerce in the region as it holds tremendous opportunities to boost economic prospects and
activity in Pakistan. Pakistan has a coastline of about 1100 km along the shores of Arabian Sea.
Total annual trade of Pakistan is about 38 million tonnes out of which 95 per cent takes place
through sea. According to projected estimates, Gwadar port will exponentially increase the
shipping activity in other ports (Karachi port and Ports Qasim) as well. However, Baloch
nationalists have expressed reservations and has severely criticised the decision to provide China
access to the Gwadar port. They view it as an unlawful exploitation of the resources and
depriving people of Balochistan of their own economic asset. Also, they are sceptical of China's
plans believing it would lead to further militarization of the region.
While analysing the future of Balochistan with reference to Gwadar port, Robert D. Kaplan, an
American Geopolitical analyst stated:
One key to its (Balochistan) fate is the future of Gwadar, a strategic port whose development
will either unlock the riches of Central Asia, or plunge Pakistan into a savage, and potentially
terminal, civil war.
From a geostrategic perspective, Pakistan will have a strategic depth and access to the finest
naval facilities. It may also enjoy greater maritime interaction with the Middle East countries as
well. The Chinese naval presence may also meliorate Pakistan's coastal defence. It will also give
Pakistan an edge over India, economically and strategically.

China heavily relies on the Middle East for energy resources and hence the country is involved in
trade, exploitation and development here and in African region. The Gwadar port can provide the
Chinese with a listening post to observe the naval activities of US in the Persian Gulf 460 km
further west of Karachi and away from Indian naval bases. In military and strategic terms,
Gwadar port can help China to monitor the SLOCs from the Persian Gulf. Gwadar has strategic
importance for China as about 60 per cent of its crude supply comes from Gulf countries that are
close to Gwadar. Besides, owing to historical affiliations with Indian Ocean region, China
considers it its right to be associated with every activity in the Indian Ocean.
Along with opportunities, a number of challenges and risks are also involved in the Gwadar port
project for both Pakistan and China. Baloch nationalists' stance towards the project and the
continued unrest in Balochistan needs to be dealt with carefully and sensitively. China, while
expanding its influence in the Indian Ocean, may also come across the problem of distance for
shipping activity. The unrest in Balochistan may also pose some security-related risks and
challenges to development activity in Gwadar. Moreover, China needs to be cautious and
conscious of its internal economic and political weaknesses which, at certain point, may cause
trouble to its greater interests in the Indian Ocean.
As the Gwadar port project will require time to be fully functional, speculations and predictions
will keep circulating and resonating in the media and policy circles of major stakeholders.
Nevertheless, the port is destined to change the future course of commercial activity in the
region.
The writer is an IR analyst and a visiting faculty at the Faculty of Social Sciences, Shaheed
Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), Karachi.