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Gwadar port emerging as a trading hub for ECO countries

Gwadar port will prove a milestone in promoting regional trade between Pakistan, Iran, Turkey, Afghanistan and Central Asian states (CARs) under the Economic Cooperation Organization (ECO) objective. It is deep-sea port in the warm-water of the Arabian Sea at Gwadar in the province of Balochistan-Pakistan is very important part of the Central Asia region. Gwadar port is being developed into an international port with huge investment of China and the road network is being completed with the assistance of Asian Development Bank, which will connect CARs with this port and would generate massive economic activity in the region. The goods produced in Pakistan can be exported to CARs at much cheaper transportation rates.

The developing trade through this port will truly promote the objective of the ECO to be single market for goods and services as ECO is trading bloc for the Central Asian states connected to the Mediterranean through Turkey, to Persian Gulf via Iran, and to the Arabian Sea via Pakistan. ECO founded in Tehran (Iran) in 1985 by Pakistan, Iran and Turkey is the only forum with representation of all the Muslim majority nations of Central Asia bordering Afghanistan, but it has been dormant as a regional organization. It has not played an effective role in promoting regional trade in the past. The ECO region is well placed to become a major hub of energy supply with the progress in Gwadar port in Pakistan-. There is a need to make efforts to establish inter-regional oil and gas pipelines as well as power grids from energy-rich to energy-deficient states. Free trade is central to regional economic integration as it can unlock latent energies and transform socio-economic landscapes. The ECO can only become a coherent organization if it creates inter-dependencies and synergies, especially in areas of energy, transportation and trade. A functional Gwadar port will revive the transit facilities and trade links among the member countries. The port offers tremendous prospects for regional trade, as it lies outside the traditional areas of conflict. Pakistan is developing additional infrastructure, which will serve both bilateral and transit trade with Central Asia.

Time calls for establishing an ECO free trade area, inter-regional oil and gas pipelines. An energy grid could create inter-linkages necessary for making the ECO more effective. Pakistan’s vision for the ECO has been the establishment of a regional power grid contributing to the economic integration of the region. ECO region has great scope for expansion of trade and economic relations with Pakistan.

Pakistan has served as a route for international trade of ECO countries. During the cold war period and after the collapse of the Soviet Union, this route remained disrupted for political instability and security crisis in Afghanistan. It is because of the prevailing situation in Afghanistan that economic, trade and cultural relations could not be revived between the newly independent states in Central Asia and other Asian countries.

A free trade zone in the ECO region is vital to make use of the member states’ potentials to their collective well being. ECO countries are rich in natural and human resources. Development of these resources through economic cooperation can lead to usher in prosperity for the region as a whole. Pakistan has repeatedly offered the ECO member countries to provide ideal port and transit facilities at Gwadar to establish their trade links with the world that would benefit the entire region. The offer to use the port facilities at Gwadar is an important proposal, as by adopting the trade route through Pakistan, the economies of the Central Asia can benefit immensely in terms of lower their transportation costs. There are plans under consideration of Pakistan for linking Peshawar with Termez in Uzbekistan and Chaman with Kushka in Turkmenistan. This would make credible trade routes to the markets of West, Far East and beyond.

The ECO region has tremendous potential for development to the mutual benefit of the member states. There is a genuine need for harmonious utilization of the region’s resources for individual and collective development of ECO member states. The Gwadar port is the gateway to Central Asia from the west, providing the shortest and fastest access to the warm waters of the Arabian Sea. The port would mean the development of transit and transshipment of bulk cargo, oil storage, refinery and petrochemicals and export processing capable of serving the entire region.

ECO members must harness their resources, as regional and inter-regional cooperation is the key to unlocking the tremendous potential of the Asia-Pacific Region for growth and prosperity. The broad-based road links between the Gwadar port and Afghanistan have been planned to ensure more links with Central Asian states.

A few years back, the ADB convened the ministerial conference on transport and trade in Central and South Asia to assess the economic impact of enhanced regional trade. There is a need for operationalizing the ECO trade agreement, transit transport agreement and the ECO Trade and Development Bank. The ECO member countries can utilize Pakistan’s geographical advantage as a gateway to the Indian Ocean and an avenue for access to South East Asia. The Gwadar port is not only an achievement for Pakistan but also a milestone in generating greater trade for ECO countries. The landlocked ECO countries can use the Gwadar port as key to greater trade through sea routes.

Gwadar port will project ECO region as an area full of investment potential and opportunities. Transportation, investment, technology, tourism, agriculture and telecommunication are only a few of the areas which can generate and absorb trade and economic activity in the region and strengthening each and every one of these sectors is of vital importance for sustainable development and economic growth of the region.

Pakistan has been Afghanistan’s principle trading partner and entry port for imports and exports. Pakistan has been providing trade facility to Afghanistan under the WTO charter that allows the landlocked country to use the port of the neighboring country. It was in1965 that Pakistan signed Afghan Transit Trade agreement (ATT) with neighboring Afghanistan to facilitate Afghan foreign trade. Presently around 300 containers per month pass through the Karachi port for onward haulage to Afghanistan.

By virtue of its geo-strategic location, the landlocked Afghanistan can emerge as a trade hub connecting the Middle East, Central Asia and Europe. Pakistan railway also plans to lay railway tracks to link Gwadar with Afghanistan and the track will further link central Asian republic and Europe. The planned railway line from Chaman (a border town in Balochistan) to Spin Boldak-Afghanistan would facilitate trade with Afghanistan and through Afghanistan with the countries of Central Asia. Gwadar would provide landlocked Afghanistan and the Central Asian republics with access to the sea. Goods and oil and gas reserves from these countries could be shipped to global markets through Gwadar port. There is almost no transit trade through Afghanistan. Being a landlocked country, Afghanistan desperately needs an export outlet.

If the ATT cargo shifts to Gwadar port, it will give a big boost to the new port because there are already road networks up to the Iranian border. Afghanistan actually wants to benefit from the proximity of distance of around 460km from Gwadar, which is the nearest port for greater trade facilities in Balochistan. The development of communication links, network of roads, railways and related activities, including trade transactions, goods transportation and storage facilities have been designed to develop closer trade and business links between Balochistan and Afghanistan and CARs. Gwadar is poised to emerge as a transit port with Afghanistan letting big ships off load or take on cargoes for and from other ports servicing nearby regions. The port complex will provide facilities of warehousing, trans-shipment, transit and coastal trade and the commercial and industrial openings for international export-import trade.

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