New Delhi’s decision to initially invest US $ 150 million for the development of Chah Bahar, an Iranian port, just 70 kilometers away from Pakistani deep-sea port of Gwadar, seems a manifestation of the decades old rivalry between two nuclear-armed South Asian neighbors.
The two ports have the potential to provide main routes to commerce in and out of the oil-rich Persian Gulf and their access to the Central Asian states will boost economic activity in the region that houses nearly one-third of the global population.
Meanwhile, the region is going through transitions in landlocked Afghanistan, bordered by Pakistan, Iran and Central Asian countries.
So, will Pakistan and India continue to compete as rivals or facilitators of new trade and energy avenues?
Conceived decades ago, Gwadar Port is a milestone for Pakistan as the country looks to build on the recent economic momentum. China has provided nearly 80 percent of the $248 million spent on the development of the Gwadar Port on the Arabian Sea. Inaugurated in 2007, it provides a short energy and trade corridor between the Gulf and western China, running all the way from southwestern Balochistan province of Pakistan through its Northern Areas.
But, even before Chinese financial and technical assistance, Pakistan had long planned to develop Gwadar as complementing Karachi and Bin Qasim ports in the neighboring Sindh province to meet an-ever increasing trading volume.
During the first phase, 4 berths were constructed. The second phase of Gwadar Port project started in the year 2007 but remained in low key during the tenure of PPP government.
The port is, however, on top of the economic agenda between Pakistan and China, which signed China-Pakistan Economic Corridor pact last year kicking off a $46 billion Chinese investment in Pakistan’s infrastructure projects.
Strategically, Gwadar port provides much easier access than Chah Bahar for both Afghanistan and the Central Asian countries. India’s trade through Chah Bahar would remain much costlier than trade through Gwadar with Central Asia and other regional countries.
By investing in Gwadar Port, China will secure routes to its trading partners in the region, which currently pass through the South China Sea, Pacific Rim, the Strait of Malacca and Sri Lanka. Gwadar Port is slated to reduce the sea distance to regional partners to 2,500 km, instead of 10,000 km, in addition to cutting land distance. Beijing will save both time and millions of dollars in trading cost.
Pakistan first handed over the port to the Port of Singapore Authority in 2007 for 40 years, but transferred it to a state-owned Chinese company in 2015 when the previous management failed to inject promised funds to develop the port.
Now that CPEC nears completion, the start of 2016 has seen new tensions between Pakistan and India. Analysts were surprised last week to see New Delhi overreact to the United States’ announcement of F-16 fighter jets sale to Pakistan. The Indian move reminded experts of the zero-sum approach because addition of eight aircraft could hardly threaten India, which has been the biggest buyer of weapons in the world, and at any rate, Pakistan Air Force already has the sophisticated technology since 1980s.
Given the history of animosity dating back to their simultaneous independence from the British rule in 1947, and failure of successive leaders to bridge the chasm, anything that Pakistan and India do will always be weighed in terms of their “strategic interests.”
The mutual distrust will allow forces of negativism to hype up skepticism around every single move the two biggest economies of South Asia will make.
While competition is and will be the name of the game, there is no reason the two ports cannot co-exist and, may someday, be complementing business in a broader region which is home to around two-thirds of the world’s oil reserves.
India’s interest in Chah Bahar is more than a decade-old but has now gained momentum in recent months after international sanctions on Tehran were removed following the world powers’ deal with the Persian state on its nuclear program which the West believed was weapon-oriented rather than for peaceful use of energy.
The project entails immense trade and commercial gains for India as it allows the emerging economic powerhouse and one of the world’s largest energy consumer to gain access to Iran’s crude oil reserves and to energy resources in Central Asia.
India will also benefit from increasing trade with the land-locked Afghanistan and the Central Asian states that currently lag far behind when compared with other regional players such as China, Russia and Turkey.
To make it more attractive to the central Asian states, India has started developing communication infrastructure in Afghanistan like roads. During the recent visit of Chinese President to Teheran, Iranian government also invited China to invest in Chah Bahar Port, but China apparently held back as it has already committed to develop the Gwadar Port.
Indian experts say New Delhi has concerns over Gwadar becoming a military base for the Chinese navy in the Indian Ocean. That is despite the fact that China and India have expanded their trade significantly.
Islamabad has its own reasons to worry about India’s interest in Chah Bahar that would provide the country a sea-land route to Afghanistan bypassing Pakistan and adding to its already growing clout in Afghanistan – a paramount concern for Islamabad. Last week, Pakistan’s top Foreign Affairs official Sartaj Aziz told Washington journalists that Pakistan has already given the United Nations a dossier on Indian involvement – from across the Afghan border – in inflaming turmoil in tribal areas and Balochistan.
In the 1990s Pakistan backed the Afghan Taliban while India supported the Northern Alliance – made up of the Uzbeks, Tajiks and Hazaras – in the deadly civil war.
Now about 15 years after 9/11 terrorist attacks – after which India cemented its friendship with the United States through a civilian nuclear deal, and Pakistan became a critical U.S. partner in the fight against terror – New Delhi has become a major economic power. Pakistan is also showing signs of high growth, and all major powers including the United States, China and Russia recognize the economic importance of both South Asian countries.
In the years ahead, both Gwadar and Chah Bahar promise significant gains for countries involved. But, the mutual distrust for each other may tend to highlight geopolitical considerations more than economic benefits the two ports offer.
Several experts believe that immense economic benefits the port offers make it more logical for Pakistan and China to collaborate, rather than its military potential. Not to forget, China was not the first choice when Pakistan decided to hand over management of the Gwadar Port as it became operational about a decade ago.
Cooperation among regional players supported by world capitals and international donor agencies can help promote a congenial atmosphere for business in the region that is a win-win situation for all.
