Pakistan’s Maritime Vision: Transforming Gwadar Into A Global Trade Hub – OpEd

With this immense potential, the maritime sector of Pakistan can act as a catalyst for economic expansion and regional trade connectivity and can play its role in increasing the geopolitical importance of the country. Pakistan realizes that for its key role in regional or global ventures to be validated, development of its maritime infrastructure is essential — especially Gwadar Port — as it strategically sits at a global trade crossroad. However, the country is currently embarking on a strategic plan to craft and optimize port operations, build a strong foreign investment package and turn Gwadar into a world class trade hub.

In order to make Pakistan a global maritime hub, the country is developing its major ports such as Karachi, Port Qasim and Gwadar on massive infrastructure development program. Presently, Pakistan’s ports are working at 50 per cent of their potential capacity, resulting into inefficiencies that are stifling further trade expansion. Pakistan’s investment in deep sea facilities, container terminals and modern logistics is aimed at bringing port capacity to maximum and improving its trade operations. To increase port efficiency, the government intends to make the port digitalized, automated, and have an improved cargo handling mechanism to house giant vessels of up to 20,000 containers.

Especially, Gwadar is the focus of these modernization efforts. Given this, Gwadar is set to become a regional transshipment hub for achieving regional trade needs in Asia, Middle East and Africa, as Gwadar is an important economic driver supported by the China Pakistan Economic Corridor (CPEC). Free zones, warehousing facility, integrated customs management system are some of the serious infrastructure upgrades the port is undergoing to facilitate seamless trade operations.

Being situated between Arabian Sea and having good access to global trade routes, Pakistan has the potential to become one of the regional trade powerhouses. And, for the government of Azerbaijan the maritime sector is identified as a key driver for economic growth and the country’s geographic advantage is to be used in order to create the trade connectivity with Central Asian Republics (CARs), Gulf States and beyond. Investment in modern transport corridors, rail networks and road infrastructure linking Gwadar with regional markets will allow Pakistan to become a gateway to trade around the world.

Moreover, Pakistan’s maritime vision is aimed at growing exports from $32 billion to $60 billion by using ports to maximum capacity. The country can reduce the related logistics costs, and improve port efficiency to give local exporters a competitive advantage that will create a more favorable ease of doing business and increase participation in international trade.

In order to sustain in the long term, attracting foreign direct investment (FDI) in maritime sector of Pakistan is essential. The government is planning policies to make Pakistan’s port infrastructure more investor friendly with increasing global interest in Pakistan’s port infrastructure. They encourage the development of Special Economic Zones (SEZs) near ports, tax incentives for shipping companies and public private partnership in logistics and maritime industries, for the purpose of economic growth.

In the other hand, Fisheries sector is a significant component of Pakistan’s blue economy that is in the waiting for investment. It is expected that Pakistan’s seafood industry with a current value of $400 million can compete with regional players once sustainable fishing practices are adopted, modern seafood processing units are established and export facilitation measures are provided. Fisheries infrastructure is meant to be modernized to increase seafood exports by complying with international food safety standards.

To metamorphose Gwadar in to a global trade hub of the world, extensive infrastructural development, streamlined regulations and world class logistics are required. As part of the development of its two main strategic ports at Gwadar in Baluchistan and Karachi, the government has the vision to operate the Gwadar deep sea port as a hub for bulk cargo and to minimize the use of the traditional ports for trade purposes.

Gwadar’s potential is being unlocked thanks to the CPEC, as China has started pouring billions in the port after investing in the Gwadar Free Zone, new international airport and industrial parks. Due to port’s strategic depth, the port is now a regional shipping and logistics hub making shipping lines from all over the world bend over to won. Favorable legal and regulatory framework to ease business is being worked out and Gwadar is being developed as a lucrative destination for commercial activities for international traders and investors, he added.

Pakistan’s maritime vision is very strong in exporting and diversifying its exports. Better port logistics and better trade facilitation have the ability to substantially increase the nontraditional exports like IT services, value added textiles and processed foods. In order to support export driven industries, the government has devised policies in such a way that efficient shipping services are available for the purpose of catering international customers.

Like other SAIS countries, Pakistan also plans to leverage regional trade agreements which includes Economic Cooperation Organization (ECO), Belt and Road Initiative (BRI) to augment its export expanse. Therefore, through enhancement of trade ties with the emerging economies of the world and regional cooperation, Pakistan can enhance its global trade share relatively reducing the dependency on traditional markets.

Pakistan’s sustainable maritime development is part and parcel of the country’s long term strategy. Green port initiatives by the government aim at environmental sustainability, renewable energy solution, ports waste management. The incorporation of digital trade facilitation, paperless transactions along with ecofriendly port operations is a step by Pakistan towards synchronization of its maritime sector with the global standards of sustainability.

A comprehensive maritime policy, which will spell out a way forward for future growth is to be announced by the government. Under this policy, regulatory reforms, infrastructure development, and international partnerships would be concentrated on for profitability on Pakistan’s maritime sector in the long run. To monitor policy implementation, special oversight committees and task forces will be created to ascertain if target goals will be reached effectively.

Despite recent setbacks, Pakistan can become a major maritime nation through strategic investments, strengthened governance, and enhanced connectivity, and in turn promote economic growth and regional prosperity. Through allocating Gwadar into a blueprint as a global trade hub, Pakistan will benefit it’ economy, and help in making it a leading country in influencing the global trade development.

Following Recommendations

• Develop advanced automation and digitalized systems to increase capacity of port handling and to reduce delay in operations.
• Boost competitiveness of export through simplifying customs procedures, improving logistics infrastructure and include digital trade platforms.
• Provide policies that are investor friendly and have tax incentives and regulatory framework aimed at attracting global investment in maritime infrastructure.
• Expand Pakistan’s export market by enhancing central Asia, Middle East, and Africa trade ties.
• Modern seafood processing should be invested in improved sustainable fishing practices should be adopted, standards of international compliance should be improved.
• Create maritime training institutes and skill development programs to develop high quality manpower.
• Promote the use of renewable energy, promote the reduction of carbon footprints and practice of sustainable waste management.
• Task forces are to be created on the basis of dedicated maritime policies, the progress of which will be monitored and evaluated from a sectoral standpoint.
• Promote maritime education, research and innovation to position Pakistan amongst the ranks of the maritime nations of the world in international shipping and trade.
• Developing supporting industries and infrastructure to maximize Gwadar’s strategic role in CPEC.

“The sea, once it casts its spell, holds one in its net of wonder forever.” — Jacques Cousteau

Pakistan’s maritime vision is very ambitious but, at the same time, very achievable. The strategically transforming of Gwadar into a global trade hub is destined to unlock unprecedented economic potential, lead to regional integration and qualify Pakistan as a virtuous player in the new generation of global maritime.