Sunday, February 23, 2025

Pakistan: Loss of Strategic Advantage in Global Trade

 

Taking advantage of national amnesia, different governments in Pakistan have been taking credit of CPEC.  Therefore, it is imperative to keep refreshing our memories of historical events and apportion credit to those who had the vision and prudence to forecast future and act accordingly.

Gwadar was conceptualised in 2001 when Pakistan and China agreed to develop Gwadar Port as a deep-sea port to reduce Pakistan’s reliance on Karachi and create an alternative trade hub.  Thereby reducing urban migration into Karachi and mitigate growing load on city’s infrastructure.  Furthermore, it was a great opportunity creating more business and employment opportunities in Pakistan, especially for locals of Balochistan.  As a side effect smaller towns around the route would have evolved to provide employment opportunities to the natives, hence reduction in urban migration.

The Phase I of Gwadar Port was completed with Chinese funding (~$248 million), in 2007. It was initially operated by the Port of Singapore Authority (PSA). In 2008 the Pakistan government and China formally discussed handing over Gwadar to China, which was to expand the port and develop surrounding infrastructure.

Therefore, actual credit of CPEC initiation goes to Gen Pervaiz Musharaf and his team. It is worthwhile to acknowledge the foresight of Chinese to venture into the project well before announcing their Belt Road Initiative, which was formally announced in 2013.

After the ousting of Gen Musharaf political parties continued their tug of war for power and self interest in CPEC investments.  This self interest resulted in many shady deals whereby Pakistan suffered as a country and individuals thrived.  Such acts by elite compelled Sheikh Rasheed to rightly say "پاکستانی سی پیک پر پنکچرہی لگائیں گے"  .  Since 2008 it has been 17 years and no significant achievement could be recorded at the Gwadar front . As per available statistics, in 16 years from 2007-2023 Gwadar has handled; Imports: 7,362,694 metric tons, Exports: 14,711 metric tons, Combined Total: 7,377,405 metric tons average 38,423 MT per month less than a single vessel load.  As on the date of penning this article, i.e. 21st Feb 2025 in last 24 hours there has been no maritime activity at Gwadar and no such activity is anticipated in next 30 days.

Main reasons for such low maritime activity were Security Concerns and Slow Development. Both these factors reflect poorly and adversely on the performance of all the governments and LEAs involved.  Since 2007 Pakistan had virgin field to develop and operate alternate trade hub, take advantage of non-competitiveness and help boost its economy.  Unfortunately, elites lust for power, money and credit overcame the requirement of supporting the development and taking appropriate actions to mitigate challenges faced, resulting in loss of opportunity.

China being progressive country and an emerging superpower, was prudent enough to sense the forthcoming issues, started working on alternate plan and successfully executed the same.

 

Below is the map depicting CPEC and alternate routes.  What a shame that an alternate trade hub which was to outshine its neighbouring competitors, has been rendered irrelevant by incompetent, self-centered and myopic elite.

Its better to be late than never, Pakistan can still reverse the situation by taking advantage of geopolitical actions, revisiting its policies, calling off internal tug-of-war and concentrating on economic development of country rather than individuals’ interests.