Daryo Senior Editor Tawney Kruger conducted an interview with Tahir Farooq, editor-in-chief of Daily Ettehad Media Group to discuss the possible implications of the construction of Gwadar Port in Pakistan as well as China's role in the project. Gwadar Port, often referred to as the "Crown Jewel" of the China-Pakistan Economic Corridor (CPEC) initiative, is on the cusp of becoming a game-changer for the region. Located in the southwestern province of Balochistan in Pakistan, Gwadar's strategic significance lies in its capacity to transform trade dynamics.
The port's strategic location on the Arabian Sea offers China an alternative trade route that bypasses the Strait of Malacca, reducing dependence on this maritime chokepoint. Moreover, it provides Pakistan with access to trade opportunities with Central Asian countries, fostering regional economic growth.
"It is seen as a potential economic hub for the region. It has the capacity to handle large cargo ships and offers modern facilities for shipping, trade, and logistics. The development of industrial zones and infrastructure around the port is expected to spur economic growth," states Mr. Farooq.
Addressing concerns about the transparency and sustainability of CPEC projects, the expert emphasized that allegations of a lack of transparency have been debunked. Pakistan and China jointly assess project finances, ensuring transparency and completion despite challenges such as the COVID-19 pandemic.
Regarding concerns about unsustainable debt burdens, the expert clarified: "China, under CPEC has given loans to Pakistan on a very little interest. Commercial loans are given on 2% interest which compared to other international deals is very low. Many loan agreements are structured with deferred payments, minimizing long-term economic implications for Pakistan."
Gwadar's role in the broader Belt and Road Initiative (BRI) cannot be overstated. As a vital component of the BRI, Gwadar's deep-sea port near the Strait of Hormuz offers China a secure and shorter route for energy imports, strengthening its energy security and reducing supply chain vulnerabilities.
"Its strategic location offers China a shorter and more secure route for its energy imports, reducing its dependence on the longer and riskier route through the Malacca Strait. Gwadar's proximity to the oil-rich Middle East is crucial for China's energy security. It provides an alternate route for oil and gas imports, reducing the vulnerability of its energy supply chain to disruptions," states the expert.
To adapt to evolving global economic and geopolitical landscapes, CPEC incorporates a diverse range of infrastructure projects that can be adjusted to align with changing priorities. Diplomacy and negotiations between China and Pakistan are crucial to managing potential challenges and ensuring the corridor's stability. Additionally, improving security in Pakistan's Balochistan region and maintaining political stability are essential for the long-term viability of CPEC and Gwadar Port.
Tahir Farooq has also recently published an article on the same topic.
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