There’s a right way to develop

OPINION

Uzair Younus

There’s a right way to shows that if the geoeconomics pivot is successful, Pakistan’s exports would dramatically rise, creating millions of well-paying jobs, eliminatdevelop Gwadar ing 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 Pakistan’s geoeconomic pivot must weigh that the real potential for the geoeconomics pivot lies through the heavily towards the oceans oceans, not the heartland of Central Asia. Almost $25 billion of the potential can be realized through three key markets: China ($13.3 bilIf the China-Pakistan Economic Corridor (CPEC) is the crown jewel of China’s Belt and Road Initiative, then Gwadar can be described as the holy grail of CPEC. Given the economic and strategic importance associated with Gwadar, one could argue that a transformation of the city and its economy would, by exlion), the United States ($5.8 billion), and Japan ($4.2 billion). Other key markets with untapped potential are Italy ($1.3 billion), Indonesia ($1.3 billion), and France ($1.3 billion). It is also worth pointing out that India has a potential of $12.7 billion and overland trade with India would deliver immense benefits; however, realizing this potential in tension, signal the realization of the promise and potential of CPEC. the near-term is an unlikely scenario given Pakistan-India relations. And if the promise and potential of CPEC is realized, then Pakistan’s In comparison, Central Asian heartland represents a tiny opporeconomy would be transformed for the better, leading to sustainable tunity, with Uzbekistan and Kazakhstan combined offering a potential and inclusive growth coupled with integration with the broader of under $1 billion. That opportunity can only be unlocked through region and the global economy. peace and stability in Afghanistan, and as recent weeks have shown, However, the pursuit of this strategy has led successive govern- rising violence on the border with Afghanistan makes the realization ments, civilian and military, to focus on a top-down developmental of this potential an unlikely scenario in the immediate future. The model that is exposing and exacerbating the shortcomings of the Pa- security challenge from Afghanistan and beyond is nothing new: for kistani state. These capacity gaps, when paired with a developmental centuries armies, not wealth, have flowed from west of the Khyber Pass strategy that is disconnected from local realities, is the reason why into the subcontinent. And this security issue has plagued Pakistan

Gwadar has a lush green cricket outfield but limited to no access to from its very early days. It is worth noting that the first Memorandum clean drinking water for the citizens of the city. While celebrities, in- of Understanding (MoU) between Pakistan and Turkmenistan to defluencers, and political elite post pictures of pristine beaches, life for velop a natural gas and oil pipeline was signed in March 1995. Almost those on the ground in Gwadar remains challenging at best. Which thirty years later, this pipeline remains a pipedream. It is also worth is why there was a weeks’ long protest in the city, with citizens pointing out that the terms of trade from Central Asia are likely to be demanding access to clean water and protection of their livelihoods, skewed against Pakistan, primarily because Pakistan would be importespecially those related to the fishing industry. ing dollar-denominated energy and selling agricultural and manufacIt goes without saying that the geoeconomics pivot is an tured goods like textiles in return. This means that the country would important and much-needed pivot. However, we must scrutinize this eventually need additional inflows of dollars from other markets to pay pivot for its alignments with the economic realities and potential of for its energy imports. Pakistan, and then assess Gwadar’s role in meeting this potential. China is a strategic ally and a key market for Pakistan. However, Take for example the World Bank’s research suggesting that the total the purchasing power of the country is based on its eastern seaboard, export gap for Pakistan is over $60 billion. This, on surface value, not Xinjiang; fulfilling the $13 billion export potential would require 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, The writer is Director of as evidenced by its engagement with Iran, including on the port of Chabahar. the Pakistan Initiative The country’s current major trading partners are currently accessed through the seas and there is treat the Atlantic Council, a mendous upside on offer by investing in realizing the missing potential. This is a sentiment shared by others, Washington D.C.-based including leading corporate executives, who believe that a robust maritime strategy is sorely needed. Gwadar think tank, and host of will be a core part of this strategy, but the port must be reimagined as a transshipment hub that complements the podcast Pakistonomy. Karachi. In addition, investments in modernizing the existing economy in Gwadar by building relevant infraHe tweets @uzairyounus. structure, starting with fishing, should be the priority. This can increase incomes for local fishermen by exporting 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