The premier of Pakistan recently made a statement emphasising the Gwadar port as an essential component for the success of the China Pakistan Economic Corridor (CPEC). He further stressed that the economic future of Pakistan is linked with the success of CPEC. This statement is strong and weak at the same time; strong in the sense that Pakistan acknowledges the Gwadar seaport as a vital component of CPEC and simultaneously being weak in the sense that Gwadar’s significance is linked to CPEC alone.
The development of the Gwadar port is not only a game changing venture for Pakistan but also for the region. Initially, it would be hard for Gwadar to be in a competitive position given the reposited trust and investment in the established ports. However, once Gwadar achieves a competitive level, it could compel the region to reformulate its economic agendas. The competition would be at an intercontinental and continental scale. It would not be wrong to project that the competition would not remain to the extent of ports alone, rather would translate to regional and national interests of states. In either case, regional embeddedness is of paramount importance and Pakistan needs to proactively encompass its strategic policies accordingly.
As such, ports are not to be treated as an individual component but are to be integrated within the national policy. Therefore, as much as the economic-geographical location, technological advancements, and infrastructural development are important to the success of Gwadar port, it is imperative for Pakistan to frame a national marine policy encapsulating strengthening economic functions of the seaport, attracting and implementing investments, directing resources to the ports in a manner to achieve higher competitive levels in marine and multimodal transportation, and integrating the global supply chain actors for the projected connectivity and cooperation.
Ports in the Middle East, the Chahbahar port, and other ports in Southeast Asia are tough competitors. In order for Gwadar to gain dominance, it is essential to achieve economic and political sustainability and stability because ports are generally fragile to political and economic conditions and an attractive port is one having the capability to performs its services within progressive economic and political framework.
Even though political stability is a hard reality to achieve in Pakistan, economic conditions and policy framework may be devised in a manner to allow immunity from political instability. In this regard, the national marine policy, port regulatory framework, and ports operational arrangement should be framed and respected on a long-term basis allowing subsequent governments limited powers only to make necessary amendments. Gwadar as the port for transshipment of global cargos should not be affected by political fluctuations and this is the minimum Pakistan should do to try translating Gwadar into one of the world’s busiest trade hubs.
It must be clarified that port authorities usually do not operate the port. Port operations are generally undertaken by specialised terminal operators. In order to cultivate the economic potential of the seaports, the states when considering leasing ports place reliance upon a proficient institutional arrangement, governance structure, and the capability of the port operating company to handle ports in a strategic manner that helps advance port’s competitive advantage. Simultaneously, port authorities controlling, administering, managing, and regulating the ports should be empowered and capable enough to synchronise themselves with the operator. A strong alignment helps not in operating and managing ports in a proficient and resilient fashion but also could aid in achieving the competitive advantage.
The port of Gwadar is presently leased for forty years to a Chinese company—China Overseas Port Holding Company—which is claimed as a new ‘emerging and fast growing company’. Ideally Pakistan could have invited established and experienced other Chinese port operators like Hutchison Port Holdings, China Ocean Shipping Company or China Merchants Port Holdings Company that are ranked as leading port operators in the world. The proposed ideal position is highlighted because port development is time sensitive for Pakistan and the opportunity should have been utilised to timely attract world trade while building capacity. Nonetheless, as principle, optimism and high hopes as regards to COPH’s performance may not be ruled out.
Much has been highlighted as to the opportunities the port of Gwadar carries, but much less as to how to materialise the projected potential.
The development of the Gwadar port is not only a game changing venture for Pakistan but also for the region. Initially, it would be hard for Gwadar to be in a competitive position given the reposited trust and investment in the established ports. However, once Gwadar achieves a competitive level, it could compel the region to reformulate its economic agendas. The competition would be at an intercontinental and continental scale. It would not be wrong to project that the competition would not remain to the extent of ports alone, rather would translate to regional and national interests of states. In either case, regional embeddedness is of paramount importance and Pakistan needs to proactively encompass its strategic policies accordingly.
As such, ports are not to be treated as an individual component but are to be integrated within the national policy. Therefore, as much as the economic-geographical location, technological advancements, and infrastructural development are important to the success of Gwadar port, it is imperative for Pakistan to frame a national marine policy encapsulating strengthening economic functions of the seaport, attracting and implementing investments, directing resources to the ports in a manner to achieve higher competitive levels in marine and multimodal transportation, and integrating the global supply chain actors for the projected connectivity and cooperation.
Ports in the Middle East, the Chahbahar port, and other ports in Southeast Asia are tough competitors. In order for Gwadar to gain dominance, it is essential to achieve economic and political sustainability and stability because ports are generally fragile to political and economic conditions and an attractive port is one having the capability to performs its services within progressive economic and political framework.
Even though political stability is a hard reality to achieve in Pakistan, economic conditions and policy framework may be devised in a manner to allow immunity from political instability. In this regard, the national marine policy, port regulatory framework, and ports operational arrangement should be framed and respected on a long-term basis allowing subsequent governments limited powers only to make necessary amendments. Gwadar as the port for transshipment of global cargos should not be affected by political fluctuations and this is the minimum Pakistan should do to try translating Gwadar into one of the world’s busiest trade hubs.
It must be clarified that port authorities usually do not operate the port. Port operations are generally undertaken by specialised terminal operators. In order to cultivate the economic potential of the seaports, the states when considering leasing ports place reliance upon a proficient institutional arrangement, governance structure, and the capability of the port operating company to handle ports in a strategic manner that helps advance port’s competitive advantage. Simultaneously, port authorities controlling, administering, managing, and regulating the ports should be empowered and capable enough to synchronise themselves with the operator. A strong alignment helps not in operating and managing ports in a proficient and resilient fashion but also could aid in achieving the competitive advantage.
The port of Gwadar is presently leased for forty years to a Chinese company—China Overseas Port Holding Company—which is claimed as a new ‘emerging and fast growing company’. Ideally Pakistan could have invited established and experienced other Chinese port operators like Hutchison Port Holdings, China Ocean Shipping Company or China Merchants Port Holdings Company that are ranked as leading port operators in the world. The proposed ideal position is highlighted because port development is time sensitive for Pakistan and the opportunity should have been utilised to timely attract world trade while building capacity. Nonetheless, as principle, optimism and high hopes as regards to COPH’s performance may not be ruled out.
Much has been highlighted as to the opportunities the port of Gwadar carries, but much less as to how to materialise the projected potential.
