China-Pakistan Economic Corridor (CPEC) has the potential to usher in a new era of economic progress and prosperity for both countries benefiting the whole region as well. Work on $47 billion CPEC is currently underway. Gwadar Port in Balochistan is essential part of CPEC, which involves construction of highways, railways and energy pipelines connecting western China with Pakistan and the Persian Gulf. After construction of the proposed rail, road and pipeline projects between China and Pakistan, Gwadar port will handle most of the oil tankers to China.
Gwadar has the most advantageous location for an alternative port in the region and it could handle mother ships and large oil tankers and capture the transit trade of the Central Asian Republics (CARs) as well as the trans-shipment trade of the region, according to the Ports Master Plan studies of Asian Development Bank. With a fully operational port, Pakistan will become a key player in the Persian Gulf region and serve as an energy corridor for Central Asia, South Asia and western China.
Gwadar Port will prove a milestone in promoting regional trade between Pakistan, Iran, Turkey, Afghanistan and Central Asian States. CPEC will convert Gwadar into a regional hub of business, trade and commercial activity that will provide a solid base for the economic progress of Balochistan. The opening of Free Trade Zone, and Export Processing Zone (EPZ) will open the doors for development of small, medium and large scale industries generating revenue for the government and providing profitable avenues for both the skilled and non-skilled workforce in the province. The potential investment areas in Gwadar include fish processing, crabs processing, cold storage, ice factories, sea-water reverse osmosis desalination plants, shrimp farming, boat building and naval architecture institute, oil storage tankers, ferry service for Karachi Ormara-Pasni-Gwadar and up to Oman and Dubai.
After the formal handover of the free trade zone to China, all business affairs of the Gwadar Port in Balochistan are currently being carried out by Chinese authorities.
Last year, Pakistan formally handed over the 2,281 acres free trade zone of Gwadar Port to China on a 43-year lease. Pakistani government has already declared Gwadar Port a free trade zone for the next 23 years. China is deeply interested to pour huge investments in Gwadar, which is located at the mouth of the Gulf and close to the Strait of Hormuz.
Pakistan and China have discussed laying an oil pipeline from Gwadar Port to western China. The proposed pipeline, which is a part of CPEC, could be extended and connected with Iran, which has already offered to supply crude oil.
In the proposed corridor, Gwadar Port is likely to become a major outlet for trade between the China, Central Asia and the Gulf region. China has already taken the operational control of Gwadar Port where oil shipped from the Central Asia and the Middle East may be unloaded and transported overland to China through the proposed trade corridor. Gwadar is poised to emerge as a hub port providing facilities of warehousing, trans-shipment, transit and coastal trade and the commercial and industrial openings for international export-import trade. On one hand, the two countries are working on laying the strategic Havelian-Khunjerab railway track in the difficult terrain of Karakoram connecting China with Pakistan from Gwadar in Balochistan. On the other hand, there are proposals to connect the Pakistan Railways with the trans-Asian railway network that will link the two countries through rail networks. This will facilitate trade to the Central Asian Republics (CARs), Russia and China and beyond.
The CPEC and Gwadar Port are expected to usher in a new era of industrial development in Balochistan. Balochistan possesses enormous industrial potential in key sectors- agriculture, livestock, fisheries and minerals. There are greater investment opportunities in all sectors of provincial economy for exploiting the industrial potential of the province. A large number of agro-based, livestock-based, fisheries-based and mineral-based industries can be set up in the province.
A fully operational Gwadar port will boost industrialization process in the province. With the functioning of industrial zone, Gwadar would become a hub of industrial and trade activities. The government has also reserved 3000 acres of land for the development of Gwadar Industrial Estate (GIE) to meet the demand of industrial plots. The government plans to establish a zone for the promotion of small and medium industries under the auspices of SMEDA in Gwadar. It also plans to open branches of banks and DFIs for making available loan financing to the intending entrepreneurs.
Gwadar free port project promises massive investment, greater generation of employment opportunities and more development projects in different sectors of provincial economy. Commerce, industry, trade and economic activities would receive a boost after the development of two-phased seaport in the province. Naturally the local people will benefit from the economic activities underway in their areas. The living standard of the local people would improve owing to the development projects in different economic sectors related to the Gwadar Port.
Balochistan is a strategically located province. The ongoing mega development projects like Gwadar deep-sea port would make the province a hub for regional transport more effectively for land locked Afghanistan and Central Asian states. This would accentuate the existing road network in Balochistan. Therefore Balochistan urgently needs a mega road sector development project to cope with the new circumstances after the completion of mega projects in the province and expected surge in economic activities in the province. Its geo-strategic location makes it the most attractive for transit traffic to the land locked Central Asian Republics (CARs). It provides greater opportunities for trade and commerce to all countries of the region by virtue of its strategic location. The Asian Development Bank has already approved construction of Gwadar-Saindak Highway taking the international highway to the borders with Afghanistan.
Of course, Gwadar has the potential to become a hub of major economic and commercial activities in the region. There is a high need for establishing roads and warehousing facilities at Taftan, Chaman and Torkham borders in order to make full use of Gwadar Port. The future scenario necessitates the establishment of a strong, well-coordinated and metalloid highway and road and rail network spreading across the province and interlinking the major commercial centers in Balochistan. The CPEC project is certainly the answer.