When it comes to Gwadar

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It’s an economic miracle

 

While militancy and terrorist attacks were on the rise in Pakistan being a potential threat to sanctity of the country, the most plausible achievement came across during the state visit of Xi Jinping to Pakistan in April 2015. He wrote in an open editorial stating: “This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother.” On 20 April 2015, Pakistan and China signed an agreement that resulted in a series of outlook revisions by international agencies and pundits worldwide while at the same time it remained at the gist of domestic politics between provinces as a tug-of-war

 

If we do a comparison of Gwadar Port with the regional ports, the most pragmatic approach would be to compare three features mainly that categorises the importance of any port by global standards. The first would be the depth of seaport, number of berths and labour cost. The total depth of Gwadar seaport is 17.1 M – 18.2 M while the depth of other biggest ports in the region like Jebel Ali (UAE): 15.5 M – 16 M, Khor Faran (UAE): 16 M, Doha (Qatar): 11.2 M – 12 M, Chabahar (Iran): 11 M, Salah (Oman): 10 M and Damam (Saudi Arabia): 9 M, stand much lower in comparison. Second, if we compare the number of berths available in Gwadar: 120 (capacity) versus 67 in Jebel Ali, 24 in Bandar Abbas (Iran) and 39 in Damam, is much significantly higher than its peers. Finally the labour cost in Pakistan is cheapest in the region while providing cheap manpower to other regional ports.

 

  Depth of Seaport

No of Berths

Gwadar (Pakistan) 17.1M-18.2M 120
Karachi (Pakistan) 9.4M-10M 33
Jebel Ali (UAE) 15.5M-16M 67
Khor Fakkan (UAE) 16M 20
Bandar Abbas (Iran) 9.4M-10M 24
Chabahar (Iran) 11M 10
Salalah (Oman) 10M 19
Damman (Saudi Arabia) 9M 39
Doha (Qatar) 11.2M-12M 29

Gawadar alone has a capacity of handling 400 million tons of cargo per annum whereas 212 ports of India combined, handle an aggregate cargo of 500 million tons of cargo per annum while the biggest port in America only handles 80 million tons of cargo every year which is only 20% of Gwadar’s planned capacity.

Strong seaports, alone are a strong factor in terms of economic and regional development, as well as also having a great influence on national integration to the world economic market. A review on the role of ports in the development of a nation by G.S Dwarakish and Akhil Muhammad Salim shows an interesting correlation of how ports like Gwadar have become game-changers for many successful nations around the world. For example, Singapore started life as an independent separate country in 1965 (18 years after Pakistan). Singapore’s prospects did not look good, as it was tiny, underdeveloped and had no natural resources with a population of relatively new immigrants. Lee Kuan Yew is credited with transforming it. He called one volume of his memoirs: “from third world to first”. First, it’s strategic location and natural harbor helped as a catalyst to their economy as it is located at the mouth of Malacca Strait, through which perhaps 40% of the world’s maritime trade passes. It was an important trading port in the late 14th Century and again in the 19th when British Diplomats to Stamford Raffles founded the modern city, that is today at the heart of world’s most dynamic regions. Second, under Mr. Lee, Singapore welcomed foreign trade and investment. Multinationals found Singapore a natural hub and were encouraged to expand and prosper. And third, the government was kept small, efficient and honest, qualities that are absent in most of Singapore’s neighbors.

On the other hand China, which is the world’s second largest economy and the biggest in Asia, started to change in 1978 when China launched major economic reforms with agriculture and setting up four economic zones (Xiamen, Shenzhen, Zhuhai and Shantou) being at the heart of its policy to encourage foreign direct investment. As the economy opened up to the outside world, companies flooded into China in order to set up factories and take advantage of cheap labour. Economic growth boomed the following decade averaging 10% a year with over 500,000,000 people lifted above poverty line creating higher buying power and a much more sustainable market in the longer run. It was called to be an “economic miracle” and one on which the world economy depends on today.

One thing however ascertained, is that Pakistan is blessed with such abundant natural resources, Gwadar being just only one, it has been unable to drag itself out of a state of dire financial instability since a very long time. Primarily due to “paradox of plenty” explained as a dysfunctional economy plagued by mass corruption. Clearly, nature is on Pakistan’s side, but the miracle remains risked entrust of political will of lawmakers, influencers and mostly into the hands of people of Pakistan.