Abstract

Gwadar and Chabahar port both have significance due to their geostrategic position for the emerging economic powers of Asia, India, and China. Gwadar port managed by China under the CPEC agreement, while on the other side, Chabahar port funded by India under Preferential Trade Agreement (PTA) which was signed on 23 May 2016 between India, Afghanistan, and Iran. Both ports are located in a significant strategic position for an energy trade route to connect Central Asia, Middle East, and Europe. Due to economic cost, both ports came into competition with each other. However, Iran and Pakistan both states deny any competition with each other and both states keenly interested in building cooperation and connections with each other. No doubt China is the emerging economic power of the world while the US try to contain China’s growing influence in the Asian region for its resources. This paper focused on the nature of both ports and built arguments that possible strengths, weaknesses, opportunities, and threat in the light of comparative analysis through descriptive studies.

Key Words

Gwadar, Chabahar, Strengths, Weakness, Opportunities, Threats, CPEC

Introduction

China and India are emerging economies of Asia. They both want to make their influence in the resource-rich region of Central Asia. China starts a project in Gwadar, the city of Balochistan in Pakistan, to build a seaport and wants to connect this port to a less develop Western part of China. As a result, India, to contain the growing influence of China in the region, India starts a project to build a seaport in Chabahar located and an important strategic position in Iran to make its influence stronger in Afghanistan and Central Asia. Both countries invest huge amount of money in these projects. Gwadar is the world deepest seaport; it has a large capacity for upcoming ships. On the other hand, Chabahar is only just a few meters deep; it has a low capacity as compared to Gwadar. Chabahar route is unsafe and unclear due to some militant’s groups that have control in a large area of Afghanistan, and there is no trained army or security force in Afghanistan like Pakistan. The Chabahar project is delay due to a lack of funding by India. Iran dropped India from the Chabahar railway project and made a deal with China. China wants to connect CPEC (China– Pakistan Economic Corridor) with Iran and other countries. Gwadar seaport has such a lot of significance due to it has the secure and shortest route for Central Asia and Western China to reach the warm sea. It's important to decrease Chinese dependence on the ‘Strait of Malacca’ and South China sea disputed routes, the port of Gwadar would provide China with another shortest and safe route for oil imports from the Middle East, thereby minimize shipping costs and reduce times. Gwadar is a new transit hub for the Landlocked Central Asian Republics (Malik, 2012).

Chabahar is beneficial for Iran because it is the alternate port of Iran. It is the merely Iranian port with direct access to the Indian Ocean. It also has significance for Afghanistan because it provides a gateway for Afghans. Both ports provide many opportunities to their native. Finically supports their own countries. They help to increase the GDP, decrease poverty, and provide a job for youth. India also wants to increase their influence in Afghanistan by the route of Chabahar. 

Gwadar Development under CPEC

Gwadar Port, located in Balochistan, is the only deep seaport which links China to the Middle East and provides a route to warm waters which can help China to develop its western province Xingjian by attaching its western regions to the rest of the world (Salim & Sultana). In the past 1987, China also constructed the Karakoram highway as a symbol of friendship and road connectivity which will be extended through CPEC and linked with Gwadar port. The port of Gwadar provides an alternative shipping route to China instead of ‘Malacca Strait’ and the South China Sea. Gwadar port will be able to improve the logistic structure of the Xinjiang region. Once the CPEC project will be fully functional and connected with Central Asian states through Xinjiang province, they can easily exchange their products in lower prices, and Gwadar port is the nearest port for Central Asian landlocked states (Bashir, Rashid, Ikram, & Tanveer, 2018). Gwadar port also provides access to oil transportation and the shortest route to Middle Eastern and African countries through Gwadar port, as shown in figure 1 (below). 

Figure 1

Importance of Gwadar Port for the World




Source:https://defence.pk/pdf/threads/gwadar-port-implications-for-gcc-and-china.474961/ (accessed on 04-05-2020)



In 1958, Pakistan obtained Gwadar port from the Sultan of Oman with the ambition of developing a deep seaport. Having a deep seaport remained a dream until Karachi port came under attack by Indian forces in the war of 1971 between Pakistan and India. Developing a seaport in Gwadar will help as an alternative trade route for Pakistan. Post-war scenario, the plan of a port was implemented, but due to the lack of funds, ports could not be constructed. During 1988-1992, a small port was built in Gwadar (Ahmad, 2016). The proper development of Gwadar port started in 2002 when China took responsibility for Gwadar port development, and in 2013, they launched the CPEC project, and Gwadar port development became an essential part of this completely under the supervision of Chinese company. Pakistan experienced the same naval threats during the Kargil war 1999 and in 2001-2002 during a direct conflict with India, which forced Pakistan to have some substitute hub and naval base as an alternate trade route and provide a backup to Karachi and Port Qasim to counter future Indian threat (Kanwal, 2018).

Phases of Gwadar Port

Chinese company completed the first phase of Gwadar port in 2005. In 2007 President Musharaff along, Chinese minister of communication Mr. Li Shenglin, inaugurated it. The total capacity and area of phase I is around 3 berths, used for cargo shipments coming from west China, American continents, Middle East, and Africa. Phase II was during 2005-2010, under the port supervision of the Singapore authority (PSA). The suggested plan for up-gradation of Gwadar port included enhancing the berths from 3 to 9, which would increase the shortage capacity of the port. Due to unfavourable circumstances of Balochistan, the upgradation of the port was not done by PSA (Zaheer, 2006). In 2013, Pakistani leadership handed it over to COPHC for 49 years lease for further development and trading; the first shipment was made from Gwadar in 2008. Currently, China completely controls the development of the Gwadar port, and it also shows the importance of the Gwadar port for China as it has become the prime hub of the CPEC project; without the Gwadar port, we cannot imagine CPEC.

Gwadar port is the third-largest port in the world and can be utilized for commercial activities of the whole region (Naseem, 2014). Strategically it is situated at a prime location and only 72 km away from Chabahar port which tries to challenge and counter Gwadar port importance. Gwadar is located on the mouth of the Persian Gulf and gateway to the Strait of Hormuz. The Chinese government decided to construct a naval base in Jiwani, 40 km away from Gwadar, for the protection of this port and ongoing trade (Khetran, 2014).

 

Gwadar Free Zone

Gwadar port also has a free zone called (GFZ). In 2013, Gwadar free zone was taken over by China overseas ports holding company (COPHC) for expansion of Gwadar after the agreement inked between the Gwadar port authority (GPA), Singapore port authority and COPHC. GFZ is situated in the northern part of Gwadar, which is 7 km away from the existing port. The Gwadar free zone will be developed till 2030 under four phases. The total area of these free zone is 923 hectares. These free zones will provide cargo capacity and also will develop industry near the port area (Parliamentary Committee on China Pakistan Economic Corridor CPEC, 2015-2017). The early development of the port is primarily based on cold storage, fishery processing, agriculture processing, infrastructure, marble processing, container yards, warehouse, business centre, trade exhibition hall, halal food processing, packaging, rest and recreation, hotel, and medical facilities etc.

According to the Parliamentary report on CPEC 2015-2017, they prefer local people to work for the development of GFZ, and around 497 locals’ employees are already serving. During the construction work of the free zone, 2000 jobs will be created for the locals, and more jobs will be available with the development of the free zone. In the management of COPHC, the Faqeer school project completed in Gwadar, granting scholarships to local youth, supplying fresh water to locals, further progress of the free zone is in the process (Zaheer, 2006).

The planned GFZ expansions are mostly granted by the Chinese government through COPHC. As the president of Rawalpindi Chamber of Commerce and Industry (RCCI ) stated, “There is unfair projection done by the government on Gwadar port, is not much progress has been done there, which they are projecting to the public.” More, he added, “Gwadar port has potential, but we are not capable enough to use that potential. There is dire need to do a lot of work” (Khan, 2018/Interview). In Table 1 the details of Gwadar master plan and progress detail is mentioned.

 

Table 1. Gwadar Master Plan

S. No	Project	Company	Estimated Cost US$ Million	Financing Mechanism	Progress Update
1	GFZ	COPHC	32	Concessional Loan	60%
2	Gwadar International Airport	CAA	240	Grant	40%
3	Gwadar Smart Port City Master Plan	Chinese Fourth Harbour Design Institute (FDHI) CCCC	4		Completed in August 2018
4	Gwadar Eastbay Expressway (19 km, connecting Gwadar Port to Mehran Coastal Highway), Gwadar Eastbay Expressway II (19 km, connecting Eastbay Expressway I to New Gwadar International Airport to New Gwadar International Airport	EPC	140	A mix of Chinese Government Concessional Loan and Grant	60%
5	Gwadar Pak-China Friendship Hospital	GPA	100	Chinese Government Grant	N/A
6	Gwadar Vocational Training and technical college	Gwadar Port Authority or any Financial Framework Agreement under CPEC	10	Chinese Government Grant	N/A
7	Gwadar Faqeer Primary School	Chinese Communications Construction Company Ltd. (CCCCL)	N/A	Grant	Completed
8	Necessary facilities for freshwater treatment, water supply and distribution	GPA	130	Grant	N/A
9	Dredging of Breathing Areas & channels	TBD	27	Chinese Government Concessional Loan & Grant	Feasibility phase
10	Construction of Breakwater	EPC	123	Concessional Loan & Grant	Feasibility
11	Bao Steel Park, petrochemicals, stainless steel and other industries in Gwadar	N/A	N/A	N/A	N/A
12	Upgradation and development of fishing, boat making, and maintenance services to protect. and promote livelihoods of the local population	N/A	N/A	N/A	N/A
13	Development of Gwadar University (Social Sector Development)	N/A	N/A	N/A	N/A

Source: The Ministry of Planning and Commission and the China Pakistan Institute (22 Feb 2018)

 

Gwadar free zone is located 632 km away from Karachi and accessed through Makran coastal highway, and it is 120 km away from the Iran border. Gwadar is linked through road and air with the major cities of Pakistan, and a planned airport will connect the city with major airports of the world.  In Table 1 it is clearly indicated that only three projects were completely granted from China, whereas the remaining were on concessional loans taken from the Chinese government. The total expected cost on the development of the Gwadar project is 1.62 billion US dollars (A. Hassan, 2005). Here the question arises that if China is not fully invested in Gwadar, then why Pakistan handed over Gwadar to China for the next 40 years with 91 percent revenue collection to China, and Pakistan will receive only 9 percent of revenue. The concern of revenue production was raised by the Minister of Shipping and port Hasil Beizinjo during a Senate meeting in December 2017. Gwadar port has a significant strategic position for global trading activities, so it is essential for the Pakistan government to close a deal on equal terms and conditions. Another concern is that if Pakistan will collect only 9 percent revenue from Gwadar port, then how it will pay back the loan because Pakistan does not have sufficient foreign reserves or export industry. In 9 percent revenue, how many shares Pakistan will give to Balochistan province. Due to these conditions of Pakistan may be in future, China will take over Gwadar port as they

already took control of Hambantota port in Sri Lanka. Sri Lankan government signed a deal with China; they gave the port control to China for the next 99 years along with 70 percent revenue collection and the remaining 30 percent for Sri Lanka (Patrick, 2017). To counter this agenda, Pakistani government officials argue that the deal and agreements of Gwadar port are completely different from Hambantota port, and China will never take control of Gwadar port.

All the investments which come under the CPEC project will address China’s interests, not Pakistan’s interests. Pakistan will get better infrastructure, modern techniques of communication etc., but all these advancements will be utilized by China for transportation and trade. If Pakistan’s govt and industrialist will not formulate proper, timely policies and steps and how to counter the growing market of Chinese products, it will further lead Pakistan towards Chinese dependency. Pakistan is already facing foreign debt issue challenges, and CPEC loans will burden Pakistan’s economy. 

Chabahar Port

On the other hand, Chabahar port which is located southeast of Iran in Sistan and best geostrategic position. It is in a key position to access the Oman Sea, Persian Gulf, and the Indian Ocean. India spending 85 million US dollars primarily on the development of Chabahar port because through Chabahar port India directly access landlocked Afghanistan and rich resources states of Central Asian Republics. After the development of Chabahar port India received rights over this for eighteen months initially. Iran also declared Chabahar port a free trade zone. India is constructing two containers berths with a length of 40 meters and three multi-cargo berths capacity. In figure 2 clearly indicated growing Indian influence in the Persian Gulf region also be able to strengths its maritime presence. The shortest distance of Chabahar Kandla port of India is 550 nautical miles (NM) while the currently define sea route is 650 NM by defining this new route towards Kandla and Mumbai Port it will secure travel cost and time and also avoid the Pakistani coast by a long margin (M. Hassan, 2018).

Figure 2

Importance of Chabahar Port for India

Source: google maps.



With one of the world's fastest-growing economies, India has felt compelled to explore new ways to extend its economic contacts and get access to new markets. Central Asia is one of the fastest-growing markets. The Gwadar port in Pakistan is one prospective path for India to access Central Asian markets, although India has long sought alternate routes due to its hostile relationship with Pakistan. Afghanistan is one of the possible routes for the country to reach Central Asia. Afghanistan also aims to diversify its trade routes to reach foreign markets and minimize its reliance on Pakistan, which handles most of the Afghan trade due to the country's landlocked status. The Chabahar Agreement was signed in 2003 by India, Afghanistan, and Iran as part of the North-South Transport Corridor concept signature by Chabahar port (Pant & Mehta, 2018). 

The port of Chabahar is in the province of Sistan and Balochistan in southern Iran, on the Gulf of Oman. Gwadar, Pakistan, located roughly 72 km west along the coast. Chabahar provides a new prospect for India to revive trade links with Afghanistan and Central Asia also monitor China naval presence at Gwadar and counter its ‘Strings of Pearl’ policy in the Indian Ocean. Afghanistan and Central Asian Republics consider Chabahar as another gateway for their import and export. Iran also came out from its isolation in the global community through this regional development (Balooch, 2009). This port also established cooperation and competition for Gwadar port.

SWOT Analysis of Gwadar with Chabahar Port

The port of Gwadar is the backbone of the CPEC project. It will provide China with a short way of transporting its Goods from its western provinces like Xinjiang, Tibet, and Qinghai to the Arabia Sea, in which 60 percent of oil shipping is done. It will play an important role in the less developed western region of China. This project is beneficial for both countries. Pakistan will get infrastructure development, and China can easily transport its goods and fulfil its energy needs by the alternate shortest and secure route. Revenue will also be generated from the toll of moving goods (A. Hassan, 2005). 

Both ports are located at the mouth of the Strait of Hormuz, which contains two-thirds of the world's oil reserves and through which an estimated 17 billion barrels of crude oil travel every day. Once these ports are fully functioning, it is likely that competition for dominance of regional seaborne trade will emerge (Zeb, 2003).

There are some major reasons which indicate the importance of Gwadar port over Chabahar.




Security Threats

After Chabahar in Iran, the next stop for Indian product will be Afghanistan, subsequently to the Central Asian States. Indian goods will not be safe due to the Taliban influence and political instability in Afghanistan, some major insurgent group in Afghanistan they have against Indian ideology. On the other hand, Gwadar also has some security issues like Balochistan has security problems and instability problem from local Baloch groups. Pakistan also established a special security task force with the help of China for the protection of CPEC and Chinese workers.




Iran Sanctions

Iran also has recently launched a nuclear-capable missile, which is a clear violating of a UN Security Council Resolution. Iran supreme leader has made that clear “We will not cooperate with America over the regional crisis. Their aims in the region are 180 degrees opposed to Iran” (Ayatollah Ali Khamenei). Gwadar has no such sanctions on China’s investment anywhere, nor is Pakistan subject to any kind of UN sanctions (Hemmer, 2007).

Both China and Pakistan want to work on CPEC because both countries need this project for further economic growth of both countries, China, Russia, five Middle-Asian states and Pakistan, all these countries have an interest in CPEC, these countries also favor CPEC, on the other hand, both China and Pakistan are ready, even if needs they take a military action to stop enemies of CPEC from their aims. So, both countries are trying their best to convert this dream into reality. During the Prime Minister's visit to Pakistan in April 2019, the two nations inked the second phase of the China Pakistan Free Trade Agreement (CPFTA) to increase bilateral trade volume. CPFTA-II started operating on January 1, 2020. It would ensure a level playing field in terms of concessions compared to other rivals, as well as strong safeguard measures to protect domestic industry and improved tariffs as well (Aslam, 2020).

This shows the strength of CPEC and, of course, Gwadar, which is part of CPEC. The shortest route for China to reach the Arabian sea goes only through Pakistan. Pakistan and China both have good relations from the beginning, and the ties become stronger with the passage of times. 

Gwadar port faced a lot of challenges as compared to Chabahar. Gwadar is situated in the province of Balochistan, which is a resource rich but less developed state. Due to political instability in the Baloch region, Pakistan invested a huge amount for the security of Chinese workers and the development of the CPEC project. The Capital government allocated 17 million US dollars for CPEC safety in the budget of 2017-18. During the budget of 2019-20, the government offer to allocate 1.3 billion US dollars for CPEC related projects, especially for its safety. Furthermore, security forces at the provincial level were also established, like Punjab has its special protection Unit, while Khyber Pakhtunkhwa has passed the formation of a 4200-member security force at the cost of 11.4 million US dollars (Iqbal, 2018). If we see the position of Chabahar, it has no local security concerns like Pakistan. 

With reference to opportunities, Gwadar, as a relatively small town in the process of development, particularly with a modern port, provides a variety of prospects to potential investors, including those in the following fields: Storage, warehousing, and other port-related infrastructure Hotels, motels, travel, and tourism are all part of the hospitality industry. The port is vital to Pakistan's geopolitical and economic interests. After Karachi and Qasim, it is Pakistan's third-largest deep-water port. It is situated at a major crossroads for international maritime commerce and oil trading. Gwadar has the potential to serve as Pakistan's worldwide trade hub (Takrim & Afeef, 2015).

The port of Chabahar will also serve as a check on China's growing position in the Arabian Sea, as China is substantially involved in the construction of Gwadar, a deep seaport in Pakistan's Balochistan region. It is also likely that connections with India and Iran's military cooperation may be expanded, which would be extremely advantageous in countering China's navy in the Indian Ocean.

The major threats to Gwadar port are from those who think that this port will damage or end their dreams, like the US, which is in tension due to progressing of China. The US dream is to maintain its status as a Superpower; this dream getting threatens by the growing Chinese economy, which has left behind the US economy in terms of GDP in PPP, which is $25.27 trillion now. It is a common perception that the state which has a bigger economy can accommodate bigger military forces, and the state which has bigger military power can get the status of superpower in the world. So, the US is trying to contain the growing influence of China. Like creating an impression that the CPEC is a threat to Pakistan and forcing other nations of the world to stop trading with China. The US has warned Pakistan that CPEC would push the country deeper into an already stifling debt burden and increase profit to China. News like these will impact CPEC because its main purpose is to provide China with a route to export its goods. Other enemies of CPEC are India, which is looking that these two countries getting improved India is known to support BLA in Balochistan by its intelligence. Kulbhushan Jadhav Indian spy arrested in Balochistan Gwadar proof Indian involvement and objective to create hurdles in the way of CPEC development.

The biggest threat to the port of Chabahar is Strict-Policy making the government of Iran itself, as today Iran is under many US sanctions, and if these sanctions remain or increases, the port of Chabahar will be useless India and Central Asian countries. India ignores US threat moves to open Iran's Chabahar port, this shows the US is a threat to Chabahar port, so if the US hold remains in this region, the Chabahar port is in danger, as the US always support Saudi Arabia and Saudi Arabia thinks Iran as a danger for itself, so it somewhat also depends on Saudi Arabia's hold in World politics. To counter US influence, Iran also shakes hand with China and shows its interest to become a part of China’s game-changer project. Recently China and Iran signed an agreement for growing trade, economic and strategic cooperation. China invests $400 to $600 billion in Iran, with some estimates running as high as $800 billion.

Comparative Analysis

Both ports are located at the crossroad position of the energy trading route through which 70 percent of the world’s oil shipment passes. Gwadar is just 70 km away from Chabahar, but overall, both have different salient features. As compared to Chabahar, Gwadar is a deep seaport and have more capacity to deal with trans-shipment and dry cargo due to its close Sea Lines of Communication (SLOC) situated on an ideal position. Gwadar is a weather port as well as have more capacity to deal with cargo shipments. Another distinguished feature of Gwadar port is that port development under the lease of China Overseas Port Holding Corporation (COPHC) for 40 years (Khetran, 2018). On other sides, India is invested for the development of Chabahar port, but its operational restraints and control is in the hand of Iran. There is another important perspective that Gwadar is a part of China long term strategy and Belt Road Initiative and target the region of the Middle East and Africa. On the other side, Chabahar is focused on Afghanistan and Central Asian states. In case of cooperation or competition, Iran Ambassador to Pakistan Mehdi Hoonerdost addressing a public gathering on May 27, 2016, at the Institute of Strategic Studies Islamabad (ISSI) and similarly former Advisor to Prime Minister on Foreign Affairs, Sartaj Aziz, said that Pakistan wants to connect Gwadar with Chabahar trough road and rail links. Iran also shows interest to join the CPEC project. So, both states focus on cooperation rather than the competition but Indian involvement in Chabahar is creating competition and hurdles for Gwadar. The whole scenario focused on a realist perspective and maintained the Balance of Power in the region.

Conclusion

 Both ports are twin ports, both of which have their own importance. In a case when one port become un-efficient for trading (for example, Chabahar by sanctions of the US), the other port will provide a trade route to Central Asian states. On the other hand, it is just a fantasy created about the Chabahar port, whereas its potentials are so much low than Gwadar’s. Though the Indian economy is growing at a healthy pace of over 7 percent yearly nevertheless, it must manage with high population growth, swelling inflation and financial condition, declining exports, lack of infrastructure, and lots of different considerations. According to research commissioned by the Ministry of Commerce, imports via Chabahar port and international north-south transport corridor  INSTC are 30 percent cheaper than those via the Mediterranean-Suez route. The port will allow India to use a sea-land route to deliver products to Afghanistan and Central Asia, bypassing Pakistan. Law and order situation on Iran’s side is not pretty either, and the US disclosed concerns over India-Iran ties too. All such situation increases the questions on the feasibility of Indian capacities for Chabahar and smooth expansion of the project. 

Gwadar Port of Pakistan needs extraordinary economic incentives for the country and can be the center stage of the entire recovery process. It is capable of placing Pakistan among the leading economies of the region. Aside from lessening China's reliance on the Strait of Malacca and South China Sea routes, the port of Gwadar will provide China with a new and shorter route for energy imports from the Middle East, lowering shipping costs and transit times. The port of Gwadar is thought to be the closest to other Chinese ports. Pakistan's economy is significantly reliant on Chinese imports. The Gwadar port will be the most convenient port for Chinese imports to enter Pakistan's mainland. This will provide Pakistan's economy with a much-needed boost. Gwadar is providing shorter trade paths to the landlocked country relative to Chabahar. China is getting a cost reductive and time-saving path for exports and imports through Gwadar, and the port will help the new superpower to meet its oil and energy requirements via Gwadar Port. Hence, the port is likely to be “The Golden Bird” for Pakistan.

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