All eyes on Gwadar

Spearhead Analysis – 09.06.2015

By Moiz Agha
Research Analyst, Spearhead Research

The China Pakistan Economic Corridor was first envisaged by the Chinese who formally proposed the project when the Chinese Premier Li Kiqiang visited Pakistan in 2013. Ever since the project was publically promulgated a ruckus was raised not only on a regional scale, but even the global powers seem to be prepossessed by it.  A new ‘Great Game’ appears to be taking place, gyrating in the warm waters of the Indian Ocean. The CPEC is not just a ‘game changer’ for Pakistan and China, but is in fact a development with multifaceted dimensions, with many players who are viewing the economic corridor as a direct threat to their interests. The CPEC if undertaken in earnest will have profound ramifications regionally as well as globally.

The Gwadar port was initially under the management of the Port of Singapore Authority (PSA International). Development had been extremely sluggish and sloppy and the whole notion of Gwadar becoming the ‘next Dubai’ appeared to be a damp squib. Things took a drastic turn when the 40 year deal with the PSA was annulled and the authority over the port was handed to the China Overseas Port Holding Company (COPHC). This was followed by the gargantuan investment by the Chinese Government for the much acclaimed Gwadar-Kashgar Economic Corridor. For Pakistan the project can prove to be a Godsend opportunity to develop the ravaged, war torn and poverty stricken province of Baluchistan and Khyber Pakhtunkhwa. Commercial and Industrial economic zones, revenue generated from transit fees and cargo handling, and the increased capabilities of the transport and energy sectors can help uplift the downtrodden population of the region.

China too has palpable benefits that it would realize if the proposed plan is developed into a fully functioning economic corridor. Its relatively impoverished western province of Xinjiang provides a stark contrast against China’s prosperous eastern belt. One of the key factors which promoted the development of the eastern half of China is its littoral character. The ocean even in the modern age of air travel is still the ‘highway of the world’ when it comes to transportation of goods and cargo. Currently 60% of Chinese oil passes through the Strait of Hormuz, onward through the Strait of Malacca, reaching the eastern Chinese shores after covering a staggering 16000 kilometers. This distance can be drastically curtailed to a mere 5000 kilometers if the Gwadar-Kasghar route is developed. The CPEC forms an integral part of China’s ‘Maritime Silk Route’ which coupled with the ‘Silk Road Economic Belt,’ forms a network that gives access to key areas spread across Eurasia. The entire project has been given the moniker of ‘One Belt, One Road’ project and the CPEC along with ventures like ‘New Eurasian Land Bridge,’ form an integral part of the grand design. In addition to providing enhanced connectivity, building a naval base at Gwadar would give the Chinese great leverage over their adversaries by adding another port to the ‘String of Pearls.’ Gwadar would offer a great strategic position, overseeing the busiest maritime route in the world with nearly 50 per cent of all container traffic and 70 per cent of all petroleum traffic passing through the Indian Ocean. It would also obviate Chinese concerns over increasing U.S influence in South East Asia through the Trans Pacific Partnership from which China has been kept excluded. An instance of U.S influence in the region is reflected by the Enhanced Defense Cooperation Act (EDCA) between the U.S and the Philippines, which allows the U.S to keep permanent military bases in Philippines which are beyond the jurisdiction of even the Philippine Supreme Court. In addition the ‘Quadrilateral Inititaitive,’ constituted by Japan, Australia, India and the U.S also poses a direct threat to Chinese influence in the region. A blockade of the Strait of Malacca in a state of crisis could for instance create great logistical problems for China. Hence in order to circumvent these obstacles and threats the CPEC would serve as a corridor of immense strategic importance for China.

The recent telltale comment by Narendra Modi dubbing the CPEC passing through Kashmir as ‘unacceptable,’ is reflective of India’s stance on the project. As a matter of fact, India appears to have already envisaged an alternate route to undermine the importance of the Gwadar-Kashgar corridor. The Chabahar port on the Makran coast of Iran in the Sistan-Baluchistan province had been proposed in 2003 to be developed collectively by the Iranians and the Indians but the plan was stalled due to the sanctions foisted upon Iran by the U.S. Notwithstanding U.S objections, after the development of the Gwadar port, India immediately started taking prompt action to build the port and has planned to invest $85 million for its development. It has further earmarked large sums of money for the linking the Chabahar port with Milak in order to connect it to Afghanistan via rail. In Afghanistan India has already developed a 223-km road linking Zaranj to Delaram providing further connectivity to the port. All these developments are subsumed under the notion of ‘Iran’s Eastern Corridor,’ a term first coined by former president of Iran Mahmoud Ahmedinejad. The corridor offers a passageway to Central Asia via Iran and Afghanistan. The Chabahar port along with the Bandar Abbas port also forms part of the International North-South Transport Corridor (INSTC).  The INTSC will connect Iran not only towards the East via Turkmenistan but also to the west through Azerbaijan. These economic corridors, it is believed will undercut the strategic importance of the CPEC by offering an alternative route. The Chabahar will also allow India to skirt Pakistani territory in order to connect with Afghanistan and Central Asia, ending their dependence on Pakistan for gaining access towards the west.

The UAE also seems to have a great stake in the developments pertaining to the CPEC.  The ports of UAE unlike Gwadar are not deep sea ports. This significantly reduces the tonnage capacity which can be harboured at the port. Larger vessels have to be off loaded and only smaller transshipments eventually dock the ports. The natural layout of Gwadar provides a propitious terrain for development of a port. Being the largest deep sea port in the world, it allows docking of the largest vessels. The natural hammerhead shape of the peninsula also facilitates docking of a large number of vessels concurrently. Having a natural advantage in terms of layout of the land and offering a much shorter and feasible route to the Caspian region, the Gwadar port poses a direct threat to the ports in the U.A.E. Their importance as entrepots is believed to be greatly reduced if the Gwadar port along with the economic corridor is fully developed and functioning.

With so many global interests tied to the developments of the CPEC, Baluchistan has taken centre stage in the larger picture and is seen as pivot on which hinges either the success or failure of the $52 billion project. Interests in Baluchistan are certainly no longer limited to the benign sport of hunting exotic animals but have taken a much more horrific visage. A concomitant of such a situation is that those hostile to the project have decided to go beyond the pale in order to preclude the development of the Gwadar-Kasghar Economic Corridor. According to a Wikileak report a former military intelligence officer apprised Parliamentarians that terrorist elements were being supported by India and UAE in the region. A former President of Pakistan too, publically claimed that RAW had established training camps for separatists along the borders of Baluchistan. In a recent statement Baluchistan Home Minister Sarfraz Bugti held RAW responsible for the tragic Mastung Incident, claiming it to be part of a larger machination to impede the development of Gwadar port. Leaders of Baluch separatist wings like Brahamdagh Bugti and Baloch Marri have also been accused of being veritable extended arms of RAW and the CIA. Commotions with regards to the secession of  Baluchistan have also been raised in the U.S. Congressman Dana Rohrabacher even demanded a referendum to be held in Baluchistan in order to ascertain whether or not a sovereign state of Baluchistan should be formed. In addition to this, despite Pakistan government’s incessant claims, the U.S has refused to label the Baluchistan Liberation Army, the Baluch Republican Army and the Baluch Salvation Front, as terrorist organizations. The U.S in all probability espies the CPEC as a source of burgeoning Chinese influence; hence one can expect the U.S will use various subterfuges to upset the applecart in the region.

Pakistan has a lot to gain by the CPEC however, it finds itself beleaguered by antagonistic interests of a number of states across the globe; therefore the country should expect thorns strewn across its path. The economic corridor does seem to be promising, ushering in prosperity to the region, but achieving this task is by no means going to be a bagatelle. It is likely that Pakistan will be kept on tenterhooks throughout the development of the project. Creating a peaceful working environment and mitigating the violent factors in Baluchistan will be the key to the success of this project. With so many heads turned towards Baluchistan, the Pakistani Government too should divert its attention away from its pet projects in Punjab and start investing time and energy into transforming Baluchistan from a volatile, marginalized and under nourished province into a region characterized by stability and security.