Pakistan’s enemies would have everyone and their cat believe that Gwadar is losing its sparkle. Yet this is a case of much ado about nothing. For Saudi Arabia is not pulling the plug on the $10 billion oil refinery project and petrochemical complex it had committed to building back in 2019. It is simply relocating construction to Karachi.
Indeed, rather than signalling that Gwadar is losing importance as a mega-investment hub, it simply represents a pragmatic approach to infrastructure issues. And, in this case, experts note that the absence of a 600-km oil pipeline to connect Gwadar with Karachi — the centre of oil supply for the entire country — is conspicuous by its absence.
So, what does this mean for CPEC?
Those arguing that the Saudi relocation represents a major set-back that undermines confidence that Gwadar will emerge as viable and mega energy centre may need to recall that Russia, also, in 2019, dangled a $14-billon energy investment carrot Pakistan’s way. It is hoped that the those at the top follow up on this. Not least because the payback clock on initial CPEC outlays is ticking. And fast.
That being said, ground realties dictate that the move to Karachi might not be all bad. For despite Saudi Arabia publicly announcing that it was not averse to a thawing of ties with arch rival Iran — there was always the remote concern that this country could become the next battleground were a new proxy to open up between the two giants.
Of course, the recent China-Iran $400-billion Strategic Cooperation Pact is a regional game-changer. Not least because it has dispelled the fear once and for all that Tehran will use Chabahar Port to compete against Gwadar. Indeed, Pakistan appears far from bothered and is already pushing ahead to connect via road networks mineral-rich Chagai, in north-west Balochistan, to Gwadar and neighbouring Afghanistan. That the Chagai district borders both Afghanistan and Iran more than suggests that these two countries are on the verge of formally joining CPEC.
Be all this as it may, the biggest threat to Gwadar living up to its nomenclature as the jewel in the Corridor crown is the ongoing security situation in Balochsistan. If this is to be avoided — the state must listen to the concerns of local communities in the country’s largest province in terms of landmass. A good place to start would be clamping down on the so-called Chinese ‘factory ships’ that sail forth towards the port to catch fish on an almost industrial scale. For local fisherman are paying the opportunity cost of this with their very livelihoods. Once the state, any state, fails in its primary duty of care — non-state actors are only too willing to step in and play the roel of malevolent benefactor. And if that happens, everyone loses. No matter how many big boys have foreign cash to splash. *