Gwadar, Chabahar and Dubai

Published: March 14, 2017
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PHOTO: AFP

PHOTO: AFP

PHOTO: AFP The writer is a Pakistani investigative journalist and academic with extensive reporting experience in the Middle East and North Africa. He is based in Doha and Istanbul and tweets @naveed360

Less than 100 kilometers apart, Gwadar and Chabahar are emerging ambitious rivals. For decades, both the sleepy coastal towns relied on marine fishing and trivial shipping trade. Pakistan never profited from Balochistan’s potential until recently. Legend has it that Zulfikar Ali Bhutto had consented to Kremlin to building a Soviet naval base in Gwadar port. The agreement was never formally signed, thanks to the Pakistani leader’s domestic political woes. Around the same time, the US wooed Shah of Iran for a naval base in Chabahar. Both lost power to lasting coups. The next-door capital of Sistan-Balochistan province was particularly snubbed after blood-soaked coup of 1979 for being a rare Sunni majority region.

Not only Gwadar but also the entire Makran coast – stretching over 1,500 kilometers of shoreline from Alkouh region north of Iran’s Mina port to Lasbela District north of Karachi port in Pakistan – owes much to US President Barack Obama. America crafted ‘pivot to Asia’ policy to rebalance its foreign policy and backed it with Trans-Pacific Partnership (TPP). Though Barack Obama’s Russia reset was projected as another masterstroke of a statesman, the US foreign policy faltered on almost every count. While the ‘pivot’ got India as its supreme beneficiary, China remained far from deterred. Not only did it strengthen control over the South China Sea through new naval bases, Beijing also checkmated Washington with its one-belt-one-road strategy and string-of-pearls venture. US President Donald Trump topped it up by abandoning the TPP to China and Russia’s gain. The White House’s Russia ‘reset’ was at best a hallucination. Obama’s misadventures left the Pacific and Indian oceans amidst newer challenges.

Notwithstanding an assortment of trials, Gwadar fits perfectly in China and Pakistan’s scheme of things. Already signatory to defence pact with Iran since 2003, India chose Chabahar to not only challenge China’s entry in the Indian Ocean but also to encircle Pakistan while gaining backdoor entry in Afghanistan. As per its stated policy, Iran neither portrays Chabahar rivalling Gwadar nor being a strategic asset for India. The reality is, of course, to the contrary.

Owing to its unique status in China-Pakistan Economic Corridor, Gwadar is projected to resemble Singapore in the future. Chabahar emerges as India and Iran’s reply to China and Pakistan. Some analysts forecast that each of the nascent ports will upset Dubai one day. The United Arab Emirates (UAE), which has always jealously safeguarded its ports’ monopoly in the region, has been warily observing developments on the mouth of Strait of Hormuz. Are the neighbouring but competing ports worth the hype?

As for Chabahar, India’s prospective benefits can be gauged from its investment in the project along with other indicators. Delhi had earlier committed about $500 million to the port’s development while its recently announced budget earmarks paltry $22 million. China’s trade with the Gulf Cooperation Council (GCC) members dwarfs India’s existing and projected trade volume with Central Asian states (including Afghanistan) and Eurasia.

Gwadar is slated to handle not only China’s imports from and exports to members of GCC but also Africa and partly Europe. Being the world’s largest energy consumer since 1993, China devours over 25 per cent of the global output; the GCC states are its largest source of hydrocarbons. Come 2020, Beijing will soar by a notch to become the GCC’s largest trading partner. The Asian giant will likely be importing GCC goods worth $160 billion while exporting goods worth $135 billion. By 2025, its maritime commerce will overwhelmingly divert to Pakistan’s Gwadar port instead of passing through narrow and tense Strait of Malacca in the South China Sea. For now, Saudi Arabia is China’s single largest oil-trading partner after Russia, supplying more than 15 per cent of the country’s total annual imports. With the expected signing of the China-GCC FTA this year, China will surpass the entire European Union as the GCC region’s top trading partner. Seeing heavy reliance on Pakistan, the GCC nations such as Saudi Arabia and Qatar are mulling over setting up refineries and laying pipelines to Gwadar. Aramco already is repositioning and diversifying itself while pursuing an aggressive and multifaceted strategy for growth.

By far, Gwadar is a decade ahead of Chabahar in terms of development and higher brand recognition among the maritime industry. Iran’s belligerent security posturing and interventionist policies of harbouring non-state actors in Muslim countries constantly put her at the risk of war as well as sanctions.

Chabahar is and continues to be a fishing port and does not match Gwadar, which is a natural harbour and the deepest in Asia, with little need for continuous dredging. Gwadar is naturally suited to dock ‘very large crude carriers’ (VLCC) while Chabahar requires massive development and maintenance effort.

Gawadar or Chabahar will never be able to challenge Dubai’s Jebel Ali and Port Rashid. While the Makran coastal ports are under development, the Dubai ports boast 102 berths, with active VLCC petroleum supply terminals. While the Iranian port is no match to its Pakistani rival’s capacity and potential, Gwadar will complement the UAE’s maritime trade. In the times to come, the Strait of Hormuz will face ever more congestion which can either be solved through laying of pipelines to the Makran coast to serve China, Pakistan and other GCC oil buying nations or using Gwadar as auxiliary anchorage.

Dubai and Gwadar are set to be sister ports, for China is now the city’s biggest non-oil trade partner. Thus, nearly entire maritime share of UAE’s $50 billion China trade will take place via Gwadar. For all practical purposes, the Gulf state will invest in the emerging port instead of torpedoing it like Pakistan’s neighbours. Dubai is a mature port with state-of-the-art facilities located in the heart of the GCC while Gwadar will have to learn a lot from the success story. However, Dubai may face serious intimidation from Oman’s Sohar port. The most ambitious and realistic challenger to ports perched on the Strait of Arabian Gulf lies just outside the bottlenecked passageway. Separated by 200 kilometers to the southeast of Dubai, Sohar is starting to compete for traffic with Jebel Ali and other top ports inside the Gulf. Backed by Omani rail system, Sohar plans to increase its container capacity further to 4 million TEUs (twenty-foot equivalent unit cargo capacity) in 2017. The planned GCC railway network will place Sohar at par if not above Dubai a decade or less later. Once fully operational, Gwadar will help bolster maritime for trade Dubai and Sohar while innately lessening the congestion challenge.

While securing its vast territorial waters from rival sabotage bids, Pakistan must institutionalise a maritime partnership regime with GCC ports. Besides, it also requires a multilateral interface with the GCC on a wide-range of issues. Moreover, Islamabad and Beijing require a forum with the Gulf nations. Pakistan must also actively participate in China-GCC strategic dialogue, as Islamabad’s ties with the Gulf nations have been bilateral. Unlike India, the Islamic republic does not even maintain observer status in the Arab League. The same holds true for the African Union as Gwadar will be engine for the mega continent’s trade with China, Pakistan and Central Asia

Published in The Express Tribune, March 14th, 2017.

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Reader Comments (21)

  • Rahul
    Mar 14, 2017 - 2:27AM

    Exhibit A: Hambantota port, Sri Lanka, financed with $ 1.4 Billion loans from China, now lying unused. China Debt Trap diplomacy is well known.Recommend

  • cuban
    Mar 14, 2017 - 6:42AM

    This author like many others hasn’t done his homework on Gwadar or CPEC. Gwadar isn’t setup to offload oil and there is no provision in CPEC for an oil pipeline to China. In short – China isn’t going to use Gwadar to import oil.Recommend

  • Humza
    Mar 14, 2017 - 10:43AM

    @cuban: Whenever I see a flood of Indians comment negatively on Gwadar and CPEC, it only confirms what Pakistanis already know. CPEC and Gwadar along with its potential benefits to Pakistan really scares Indians. If you visit Gwadar, you will find a natural deep sea port the likes of nowhere in the world. I too think it will complement Dubai since it is positioned to work as a sister port to the GCC. It only has to be developed properly and avoid attacks from across the border in Afghanistan by agents working for anti state groups.Recommend

  • ToThePoint
    Mar 14, 2017 - 12:05PM

    As a Pakistani first, I strongly believe that we need to ensure that all the employment is diverted to the residents of Balochistan. In that way, we will finally be able to address the grievances of our brothers and this will be the critical factor which will determine the success of Gwadar.Recommend

  • Komal S
    Mar 14, 2017 - 12:42PM

    We all agree Gwadar is a good thing for Pakistan and CPEC is also good for Pakistan. But the actual use case of the port as described in the article is not accurate and not feasible. China’s refineries and storage are in its eastern coast and also majority of their economic activity is on their east coast. Most of the Oil will go through Ships from middle east to their east coast. A small percentage will go through Gwadar. It is also possible China will build strategic oil storage at Gwadar. It may also build a refinery at Gwadar, that way some of the high polluting industries can be avoided on Chinese Soil. If you look at the Geography, there is a huge Himalayas and thinly populated region of west side of China. You go down another 500 kilometers to the east, the land distance from Chinese ports are shorter and efficient. Of course Gwadar is an Insurance policy for China in case of a war, great naval base for another anchor in the Indian ocean. Recommend

  • Parvez
    Mar 14, 2017 - 2:08PM

    Today Pakistan has only two ports with limited capacity to service trade……Gwadar would be workable from a commercial point of view ……getting it going will be the hard part.Recommend

  • IBN E ASHFAQUE
    Mar 14, 2017 - 2:42PM

    Gwadar is projected to resemble Singapore in the future. You must be day dreaming………………………………Gwadar cannot never be even near to be Dubai or Singapore…………….Because Dubai and Singapore have law and order………the whole of Pakistan does not have law and order……..You cannot build Gwadar on the basis of CORRUPTION all around in Pakistan……….May Allah guide us all……. Recommend

  • Feroz
    Mar 14, 2017 - 3:21PM

    There is no oil pipeline to carry oil from Gwadar to China. Niether Gwadar or Chabahar can ever rival Dubai because Dubai will always remain the No 1 trading destination in the Middle East. Chabahar port has no strategic significance, it is merely an outlet or inlet for trade between India/Afghanistan/Central Asia considering Pakistan/Afghanistan are now in a bind not allowing trade between partners on either side. Gwadar has been designed as a Naval Base for the Chinese Navy, any other benefits being merely incidental. It is not being called a Naval base because it can cause a lot of consternation in the US as well as other global powers. Sooner or later the cat will be out of the bag and a price will have to be paid for giving China a foothold in South Asia. The experience of Sri Lanka with Hambantota is a case in point, what is the volume of trade China can ever do with Sri Lanka ?Recommend

  • cuban
    Mar 14, 2017 - 3:38PM

    @Humza: @cuban: Whenever I see a flood of Indians comment negatively on Gwadar and CPEC, it only confirms what Pakistanis already know. ….
    .
    I am not Indian and maybe you or the author can explain how China is going to use Gwadar to transmit oil without an oil pipeline? It’s unfortunate that few in Pakistan have much understanding of Gwadar and that obviously includes ET which continues to show a picture of a port which clearly isn’t Gwadar. Recommend

  • Honest Observer
    Mar 14, 2017 - 4:52PM

    Excellent article backed with amazing facts. Rarely one find such in-depth essays which go beyond lecturing the readers. As for as the oil pipeline issues is concerned, the critics and cynics need to ask the Chinese, the Gulf Arabs like Saudi Arabia and Qatar about their plans if none wants to inquire from Pakistan government. Definitely, Gwadar is destined to be an oil industry hub for upstream supply between two main ends. Your denial won’t change the ground realities. I love the CPEC more when Indians and American express their outrage and rejection. Pro-Iran are opposed to CPEC as it makes Pakistan more integral not only to Chinese but also GCC nations. Iranian lobby in Pakistan along with liberals opposes such realities, only to look stupid in the end.Recommend

  • Shakil
    Mar 14, 2017 - 7:16PM

    Dear Indians, if CPEC is too bad for Pakistan then why are you so worried, keep Pakistanis in lala land :)

    but your responses states otherwise, Indians are never worried about Pakistan so if it makes them worry then its good for Pakistan.

    So carry on saying whatever you want, things on the ground will prove you all wrong!Recommend

  • Shah
    Mar 14, 2017 - 10:12PM

    @cuban:
    My friend, maybe you have missed the point; Russia is positioning itself for the the $2 billion worth to lay the Oil Pipeline and Tajikhistan Kazakhistan venture wants to lay the Gas Pipeline; Gwadar is to be used to pump oil & gas from CIS states and Russia; Another line is being put to get China the delivery to their Western Regions which now have a master plann to development of the region; Of course negative thinkers, perpetrators and people who want this to fail have their theories and their own nightmares; Gwadar is there to stay; Of course we dont want bars, clubs & prostitution centers a la grande developed as there are so in the 2 famous countries, which makes them popular and glamorous; No, of course not, we dont want that; Recommend

  • A.
    Mar 14, 2017 - 11:56PM

    We love our brother china so much that we will be happy if they benefit from us. Our love is unconditional.Recommend

  • mrashidhai
    Mar 15, 2017 - 6:42AM

    Good article, but who will give answer to some of the following pertinent questions;

    i) What is the guarantee that China will not be another ‘East India Company’. (In politics and in one’s country’s interest there are no friends or foes.)
    ii) Who will ensure that Gawader port will not be used as a naval base for China?
    iii) What is the assurance that as ARAMCO area is for Saudis, Gawader area will not be for Pakistanis?
    iv) Who will give undertaking that Pakistan’s cottage industry will not totally disappear with the flooding of Chinese goods? (Pakistan is already struggling against the dumping of Chinese goods)
    v) How and who will stop the emergence of massage centers, pubs, bars and dance clubs (along with its must accessories).

    If for the Pakistani nation the answers are satisfying then BEST OF LUCK.Recommend

  • Siddiqui
    Mar 15, 2017 - 7:19AM

    Take it easy dear Author. There is no competition among ports as you have put it. Gwadar can never become Dubai nor Dubai can become Gwadar or Chahbahar. Every nation has its economic compulsions and develops ports to address its economic needs. This has been happening since ages ago and will continue to happen in future too. So, once again, take a deep breath and take things easy.Recommend

  • Attorney Tausif kamal
    Mar 15, 2017 - 8:21AM

    “Iran’s belligerent security posturing and interventionist policies of harbouring non-state actors in Muslim countries constantly put her at the risk of war as well as sanctions.”- this is the only sensible sentence in this article. The rest is just garbage, laughable…Recommend

  • Trollslayer
    Mar 15, 2017 - 9:29AM

    A whole lot of conjectures and wishful thinking, while putting the cart before the horse. Please stop counting your chickens before they are hatched.Recommend

  • Iqbal
    Mar 15, 2017 - 12:11PM

    exactly, CPEC is over amplified for what it is not / yet. India should not CPEC as extremists elements will flow into India.Recommend

  • Mega
    Mar 16, 2017 - 6:54AM

    @Shakil: U are getting comments because you include indian projects in your article “Chabar port” stop obsessing and belittling it just to upstage your fanfare CPEC loans..maybe then you won’t get replies.Recommend

  • Mat
    Mar 16, 2017 - 6:55AM

    A really well-rendered article on this critically important subject. Two very good suggestions I like are regarding Pakistan obtaining representation in Arab League and African Union. Gwadar is not Hong Kong, Singapore, Dubai, nor is it Chabahar or Hambantota. Gwadar is uniquely located to cater to a vast Hinterland of the entire Eurasia and not just China.Recommend

  • Sonya
    Mar 16, 2017 - 2:04PM

    @Attorney Tausif kamal: Even that sentence is a garbage too… the author, a Pakistani worker, lives in Qatar and one can imagine the rest.Recommend

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