OPINION
Uzair Younus There’s a right way to develop Gwadar
shows that if the geoeconomics pivot is successful, Pakistan’s exports would dramatically rise, creating millions of well-paying jobs, eliminating chronic external sector crises that Pakistan faces, and accelerating the achievement of key human development goals. Digging a little deeper into this World Bank analysis highlights that the real potential for the geoeconomics pivot lies through the Pakistan’s geoeconomic pivot must weigh oceans, not the heartland of Central Asia. Almost $25 billion of the heavily towards the oceans potential can be realized through three key markets: China ($13.3 billion), the United States ($5.8 billion), and Japan ($4.2 billion). Other f the China-Pakistan Economic Corridor (CPEC) is the crown key markets with untapped potential are Italy ($1.3 billion), Indonesia jewel of China’s Belt and Road Initiative, then Gwadar can be ($1.3 billion), and France ($1.3 billion). It is also worth pointing out described as the holy grail of CPEC. Given the economic and that India has a potential of $12.7 billion and overland trade with India strategic importance associated with Gwadar, one could argue would deliver immense benefits; however, realizing this potential in that a transformation of the city and its economy would, by exthe near-term is an unlikely scenario given Pakistan-India relations. tension, signal the realization of the promise and potential of CPEC. In comparison, Central Asian heartland represents a tiny opporAnd if the promise and potential of CPEC is realized, then Pakistan’s tunity, with Uzbekistan and Kazakhstan combined offering a potential economy would be transformed for the better, leading to sustainable of under $1 billion. That opportunity can only be unlocked through and inclusive growth coupled with integration with the broader peace and stability in Afghanistan, and as recent weeks have shown, region and the global economy. rising violence on the border with Afghanistan makes the realization However, the pursuit of this strategy has led successive governof this potential an unlikely scenario in the immediate future. The ments, civilian and military, to focus on a top-down developmental security challenge from Afghanistan and beyond is nothing new: for model that is exposing and exacerbating the shortcomings of the Pacenturies armies, not wealth, have flowed from west of the Khyber Pass kistani state. These capacity gaps, when paired with a developmental into the subcontinent. And this security issue has plagued Pakistan strategy that is disconnected from local realities, is the reason why from its very early days. It is worth noting that the first Memorandum Gwadar has a lush green cricket outfield but limited to no access to of Understanding (MoU) between Pakistan and Turkmenistan to declean drinking water for the citizens of the city. While celebrities, invelop a natural gas and oil pipeline was signed in March 1995. Almost fluencers, and political elite post pictures of pristine beaches, life for thirty years later, this pipeline remains a pipedream. It is also worth those on the ground in Gwadar remains challenging at best. Which pointing out that the terms of trade from Central Asia are likely to be is why there was a weeks’ long protest in the city, with citizens skewed against Pakistan, primarily because Pakistan would be importdemanding access to clean water and protection of their livelihoods, ing dollar-denominated energy and selling agricultural and manufacespecially those related to the fishing industry. tured goods like textiles in return. This means that the country would It goes without saying that the geoeconomics pivot is an eventually need additional inflows of dollars from other markets to pay important and much-needed pivot. However, we must scrutinize this for its energy imports. pivot for its alignments with the economic realities and potential of China is a strategic ally and a key market for Pakistan. However, Pakistan, and then assess Gwadar’s role in meeting this potential. the purchasing power of the country is based on its eastern seaboard, Take for example the World Bank’s research suggesting that the total not Xinjiang; fulfilling the $13 billion export potential would require export gap for Pakistan is over $60 billion. This, on surface value, Pakistan to send its goods through the oceans to ports in eastern China. Additionally, realizing the strategic economic opportunity on offer through CPEC requires Pakistan to address its own internal shortcomings. These shortcomings are forcing China to hedge against Gwadar, as evidenced by its engagement with Iran, including on the port of Chabahar. The writer is Director of The country’s current major trading partners are currently accessed through the seas and there is trethe Pakistan Initiative mendous upside on offer by investing in realizing the missing potential. This is a sentiment shared by others, at the Atlantic Council, a including leading corporate executives, who believe that a robust maritime strategy is sorely needed. Gwadar Washington D.C.-based will be a core part of this strategy, but the port must be reimagined as a transshipment hub that complements think tank, and host of Karachi. In addition, investments in modernizing the existing economy in Gwadar by building relevant infrathe podcast Pakistonomy. structure, starting with fishing, should be the priority. This can increase incomes for local fishermen by exportHe tweets @uzairyounus. ing value-added seafood to the world, starting with the Gulf, and generate increased economic activity that can justify further investments in the future. Pakistan’s geoeconomic pivot must weigh heavily towards the oceans, and investments must be made in core infrastructure necessary to meet the country’s export potential. n
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