Two ports currently under construction of the east coast of the Arabian Sea have enormous economic implications not only for their host nations but Eurasia’s post-Soviet space as well, providing a potential maritime link for their exports and imports beyond railway lines dominated by former imperial master, Russia. But surprisingly, both facilities are being developed by outside nations locked in a geostrategic rivalry of their own, complicating the ports’ developments as a subset of Eurasia’s new “Great Game.”
Chabahar, Iran’s southernmost city, is located on the Arabian Sea’s Makran coast in Sistan and Balochistan Province, and the port has free trade zone status. Pakistan’s Gwadar port also is situated on Pakistan’s Balochistan province’s Makran coast, only 72 nautical miles southeast of Chabahar. India is helping to underwrite the development of Iran’s Chabahar, while China has been financing Gwadar since 2002.
Chabahar’s development has a long genesis. Meeting in Tehran in Jan. 2003, Iran, India, and Afghanistan signed a memorandum on the Development and Construction of Transit and Transport Infrastructure to improving the route from Chabahar port to the Afghan cities of Zaranj and Delarm. Starting in 2009, Iranian ports and shipping companies contracted an Indian consortium to undertake development work at Chabahar and on the Chabahar–Fahraj–Bam railway link.
India is unconcerned that the project may suffer from sanctions. On Nov. 29, 2013, speaking in the wake of Iran Deputy Foreign Minister Ibrahim Rahimpur holding extensive talks with Foreign Secretary Sujatha Singh and National Security Advisor Shivshankar Menon, Ministry of External Affairs spokesman Syed Akbaruddin said, “India has always held that it would like to engage Iran economically and any issues in other parts of the world should not impact our legitimate economic interaction such as energy which is a major area of cooperation and we intend to pursue that. Similarly, we have been interested in Chabahar port and sanctions, even unilateral, do not impact port-related activities.”
In Feb. Iranian Foreign Minister Mohammad Javad Zarif, on a two-day visit to New Delhi, said, “Chabahar and a corridor, both rail and road from Chabahar to Afghanistan and Central Asia, is a project we are working on together with India. I hope that in this trip we can take practical steps (to implement the project). This region is suffering from a war economy, drug economy and from illegal trade economy. If we can provide an alternative economy, then we can deal with the problems like terrorism. There is a whole range of economic projects that we can work together on. There are transportation projects, energy projects. There are lots of areas that we can work together on that will benefit both countries and ensure peace and security in the region.” Iran has already spent $350 million on developing Chabahar.
Beyond financing Chabahar, India is not neglecting infrastructure and has also constructed a 135-mile Zaranj-Dilaram road in Afghanistan’s Nimroze province, which will connect to Chabahar port via Milak, which will assist in opening the Indian market to Afghanistan.
Indian investment in Chabahar is important for India to protect its “business and commercial interests” in the landlocked Afghanistan as Pakistan has denied India transit access to Afghanistan through its land route.
Farther north, Beijing has already invested heavily in building Pakistan’s Gwadar International Port at the mouth of the Gulf of Oman, gateway to the Gulf through which 40 percent of the world’s oil passes. With Chinese assistance the strategic, warm-water, deep-sea Gwadar Port was completed in 2007. China was a major investor in Gwadar and spent $248 million in the first phase of developing Gwadar port, whose eventual costs topped $2.2 billion.
Farther north, Beijing has already invested heavily in building Pakistan’s Gwadar International Port at the mouth of the Gulf of Oman, gateway to the Gulf through which 40 percent of the world’s oil passes. With Chinese assistance the strategic, warm-water, deep-sea Gwadar Port was completed in 2007. China was a major investor in Gwadar and spent $248 million in the first phase of developing Gwadar port, whose eventual costs topped $2.2 billion.
One person without a doubt about Gwadar’s future is China Harbor Engineering Company (CHEC) Vice President Shi Yingtao, who said in an interview earlier in the month that Gwadar would be able to serve large merchantmen for the next 50 years and will play a vital role in the regional trade and development. Pakistan has already handed over the task of handling Gwadar Port to the CHEC. The company which is responsible to make the port fully functional took it over at the beginning of this year. CHEC is currently dredging Gwadar’s three mile-long channel to a depth of 46 feet, which will allow it to handle all but the largest ocean-going merchantmen.
In addition, Shi noted that CHEC besides Gwadar is involved in another major project in Pakistan at Port Qasim in Karachi.
Gwadar’s development ties in with China’s larger maritime strategic interests. China has had an intermittent naval presence in the Indian Ocean since Dec. 2008, when it sent three warships to liaise with the Combined Task Force 150 (CTF 150), an international naval taskforce set up after the 11 September attacks to patrol the Arabian Sea and the coast of Africa to combat terrorism. When fully operational, Gwadar will give China easy access to the key energy markets in the Middle East, convenient access to the warm waters of Indian Ocean and a listening post near the Strait of Hormuz.
But state discussions between China and Pakistan remain problematic for the moment, as Chinese President Xi Jinping’s upcoming two-day visit to Pakistan, which was scheduled to begin on Sept. 15, as part of a trip that would also take him to India and Sri Lanka, has been indefinitely postponed. In the wake of prolonged political demonstrations in Islamabad, Pakistan on Sept.6 reluctantly announced that Xi’s visit had been delayed due security concerns in the capital. Six days later Xi subsequently remarked on the sidelines of the Shanghai Cooperation Organization leaders’ summit in Tajikistan, “I’ve been earnestly looking forward to visiting Pakistan.”
That said, China still has major ambitions for Gwadar. On Sept. 9 Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI) President Shah Faisal Afridi said that China is planning to reproduce the model of Shanghai Free Trade Zone (SFTZ) in Gwadar, telling reporters, “The SFTZ is a perfect model to be implemented at Gwadar. It was first used as a testing ground for a number of economic and social reforms in China and it proved very helpful in scaling up the country’s economic growth.”
The future of the two ports depends on both infrastructure development and political stability. In the issue of infrastructure, Iran, with its extensive railway network, is clearly ahead. Iran is also more politically stable than Pakistan, has better relations with Afghanistan and the Central Asian states, and unlike Gwadar’s proposed transport infrastructure, its proposed route goes through relatively stable parts of Afghanistan. Countering these advantages is the fact that China has far richer fiscal resources to throw at its Pakistani infrastructure projects and a far higher volume of maritime trade.
The two alternative transport visions both intersect Afghanistan, where, according to Ali Jalali, a Professor at the U.S. National Defense University in Washington and a former Afghan Interior Minister, Indian and Chinese investment “will be a major contributor to Afghanistan’s stability as the US is preparing to withdraw its main combat forces between now and 2014.”
It is probably too much to hope for, but given the vast amounts of money that the West has spent in Afghanistan, Western economic institutions and governments might assist Indian and Chinese investment in fast-tracking both projects, rather than devolving into political squabbling, as a prosperous and peaceful Afghanistan crisscrossed by roads and railways would benefit the economies of virtually all of Afghanistan’s neighbors as well.
In the meantime, all the post-Soviet Central Asian states can do is sit and wait.
Dr. John C. K. Daly is a non-resident Fellow at the Johns Hopkins Central Asia Caucasus Institute in Washington DC.
http://www.silkroadreporters.com/2014/09/22/two-ports-iran-pakistan-will-impact-central-asia/
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