Oman is Pakistan’s fifth neighbor that shares maritime boundaries with Pakistan. The two countries enjoy close and cordial relations. Both the countries agreed to further enhance cooperation and expand relations in diverse areas, including economic, trade, investments, education and defense. Pakistan and Oman are bound by a common history, shared values, faith, traditions and commonality of interests and formed the basis of a special relationship with Oman. The two countries initiated their diplomatic relations way back in 1972, and have grown from strength to strength. Since its creation, the hardworking and committed Pakistanis contributed towards Oman’s development. Though bilateral trade between the two countries has been around 300-500 million dollars in the past one decade, yet there is a wide scope for expanding it multi-fold. Pakistan has been exporting its traditional items, including garments, textiles, footwear, fruits, surgical and sports goods to Oman.
Gwadar Port has the potential to become the industrial crown of the country. It can transform the Pakistan’s economic status forever. It will enjoy prime importance because of its geo-strategic location marking the confluence of South Asia, West Asia and Central Asia. The Gwadar Free Trade Zone will open up many more possibilities for the region. Gwadar, after completion of port project is expected to become the ‘boom’ town in the next few years. A special industrial development zone with an area of 4,000 hectare has been proposed for setting up various industries in Gwadar. The export processing zone has also been planned for assembling plant and other industries. Oil storage yard and refinery have also been proposed in the north of Gwadar town.
Gwadar Port does not pose any challenge to Omani Port of Salalah. Oman believes that both ports- Gwadar and Salalah will be complementing each other. Built on the site of the former harbor of Raysut, the port of Salalah offers direct access to the Gulf, the Red Sea, the Indian Ocean and the East Coast of Africa. With the expansion of the Raysut Industrial Estate, and the prospect of increased trade with the Yemen, it was decided to develop not only the container terminal but also a free zone as well. In 1999, Omani government gave the approval for the establishment of the free zone, which was funded primarily by the private sector. Depending on the volume of traffic passing through the port, the country plans to add 4 berths to the site. It has also been proposed to expand the port further by establishing a dry dock and making the storage area larger. The new container terminal in Port Salalah was opened for business in 1998. It has four berths, with a total length of 1,200 meters and a water depth of 16 meters after dredging.
Historically, Gwadar has been the part of Oman. In late 1960s, Gwadar was purchased from Oman and in 1970 it was made a full-fledged part of Balochistan province. Oman and Balochistan also share cultural history. Oman has also made valuable funding to contribute to the development of Gwadar Port City. A few years back, Oman had committed $100 million for the Gwadar port project, out of which $20 million had already been spent. The Omani government is committed to provide the remaining $80 million for various projects in Gwadar including the airport facility. Oman had been invited by Islamabad to consider building storage and warehouse facilities in Gwadar and make use of Pakistan’s defense production capabilities and facilities.
Oman has always been known for its political stability in the Gulf region. It has close relations with other Gulf Cooperation Council (GCC) members and other nations of the world outside the Middle East.
With a free market economic system, Oman enjoys a stable monetary policy that keeps inflation under control. Oman has a duty-free access to the GCC markets, which constitute a great purchasing power. All products originating from Oman are exempted from customs duty if the value added to the product is not less than 40 percent and the shareholding of GCC nationals in the company responsible for export is at least 51 percent. Oman is the second largest country in the Arabian Gulf occupying the South Eastern corner of the Arabian Gulf. It borders with Saudi Arabia and the United Arab Emirates in the West, the Republic of Yemen in the South, the Strait of Hormuz in the North and the Arabian Sea in the East. Its coastline stretches for 1,700 kilometers from the Strait of Hormuz in the North to the borders of the Republic of Yemen in the South. Oman is strategically located at a focal point of two continents: (East) Africa and (South) Asia, two areas that combined are considered a huge export market and an ideal point for distribution and communications with neighboring and international markets. Its geostrategic location makes it a gateway to the Arabian Gulf.
The port of Salalah is the deepwater port in the southern region of Oman. It is the main container transshipment terminal of the region, which can accommodate large vessels up to 16m draft. The port has attracted major shipping lines. The terminal has surpassed 5 million TEUs. It operates 24-hours by dividing the work into two shifts, a morning and a night shift. Development of the container terminal continues and there is an expansion plan to construct fifth and sixth berths in order to provide 3 million TEUs capacity per annum. The first stage of the plan is to extend the breakwater by 2.5km. Strategically located on Asia-Europe trade route, the fastest growing trade lane in the world, the establishment of Salalah Port at the southern tip of Oman has transformed and placed the city of Salalah on the global map. Its geographical location makes it the ideal hub for the Middle East, Indian subcontinent, Red Sea and East African markets. The port provides a quick and direct access to the world market as freight services become comparatively cheaper to destinations in Asia, Africa, the GCC and Indian Ocean rim states.
The trade from Gwadar can benefit the two countries greatly as a medium ship to Muscat takes only hours to ply as compared to the distance between Karachi and Muscat, which is generally covered in around three days.