(Kamra campus)

Bachelor of Science in Computer Science

PAK STUDY ASSINMENT NO :03
 Submitted To

DR AMJAD
 Submitted By
Khushi muhammad
BSCS-1B
205356
Fall2020

Saturday, December 5, 2020

Background of Gwadar Port
Gwadar Port is a warm water port located in Pakistan’s
Baluchistan Province. It is a deep seaport located on the
Arabian Sea in Gwadar. This port is deemed as a link between
China’s One Belt One Road project and its Maritime Silk Road
Project. It features majorly in the CPEC (China-Pakistan
Economic Corridor). The port is situated about 533km from
the city of Karachi and about 120km from the Iran border. It
is also 380km NE of the nearest point in Oman over the
Arabian Sea.  The port is placed at the Persian Gulf mouth,
outside the Hormuz Strait, close to the important shipping
routes to and from the Gulf of Persia. The port is managed by
a Chinese government company

 Geo-Strategic Importance for pakistan

Gwadar port is located about 267 NM West of Karachi. Because of

its ideal location at the mouth of gulf and opposite strategic choke
points of Strait of Hormuz and Gulf of Oman the port is visualized
to become a regional hub serving incoming and out going
commercial traffic of Middle East and Gulf countries. The new port
of Gwadar will supplement Karachi Port and Port Qasim. It will
attract transit and trans-shipment trade from over twenty
countries including Srilanka, Bangladesh, Oman, UAE, Saudi
Arabia, Qatar, Iraq and Iran. These countries may open their
warehouses in Gwadar for export of goods and storing of
imported goods for later shipment to their countries.
non quantifiable Benefits of Port. Details of indirect non
quantifiable benefits which the people of region will get and
would accrue to the national economy from this port.
Duty Free Port & Free Economic Zone/Incentives. Keeping in view
 the significance of Gwadar port, the government has declared
Gwadar as a duty-free Port and Free Economic Zone. A separate
allocation of one billion rupees was made in the budget for the
fiscal year 2004-2005 for the construction of the export zone and
Gwadar industrial city. This has greatly accelerated the pace of
development in the area. The other incentives announced by Govt
are summarized as under:
Positive approach towards private sector involvement.

Infrastructure development on BOT/BOO basis.

100% profit repatriation.
Tax holidays for ten years from date of commencement of
commercial operations.
100% profit repatriation.
Ownership rights.
Flexible labour regulations.
Subsidy on utilities.
Complete exemption from duty & sales tax on imported plants &
machinery for 10 years.
Capital gains will be exempted from tax for 5 years.
No local octroi or export tax leviable by local Govt.
Access to CARs. Gwadar Port located in proximity of Arabian Gulf
and Central Asian Republics provide it unique opportunity to
serve both. Pakistan needs to capitalize on them through better
diplomatic ties with Arab states and CARs. It is therefore
anticipated that oil reserves and other resources of CARs would
gradually become the focus of world attention in coming years.
However, in case of “exports to and from CARs” a peaceful and
stable Afghanistan is must. The port will also help in promoting
trade with Gulf States possessing 63% of world’s oil reserves and
will prove instrumental in promoting trans-shipment essentially
of containerized cargo besides unlocking the development
potential for hinterland. The most important factor that makes
Gwadar Port strategically unique is the location with respect to
other major ports in the region, which are all located on the other
side of the sea. Gwadar port being towards north can easily
provide services and facilities to CARs, Afghanistan and China.

Upcoming Fishing Harbour/Industry. Planned fishing

harbour/industry linked with this port will facilitate efficient
exploitation of our 960 KM of long coast
which would give boost to fish and crab exports and would
promote food processing industries as well. Gwadar could also be
a potential source of gas and oil exploitation.[1] These areas
clearly indicate the vast potential which should be exploited and
will help contribute towards national economy.
Instability in Gulf. Gulf region and CARs contain one of the largest
oil and gas resources of the world respectively. Gulf countries in
particular, have capitalized on it by constructing major
commercial centers with bulk port facilities. Pakistan, could not
cash on this opportunity earlier due limited resources which Gulf
countries did and so have well established ports these days. Gulf
presently is badly exposed to world due instability in region and
in case of blockade of Gulf due to any reason, the Gwadar port
would become more important due to only choice left. Beside this,
sour relations of Iran with western countries and her territorial
disputes with Iraq are enough reasons for international
community to opt for Gwadar rather than any Iranian port in
future. Gwadar Port is therefore expected to act as a vital link to
China, Afghanistan and Central Asian Republics throughout the
year. Due to these factors Gwadar is going to be the necessity of
major shipping competitors as it is the most efficient route to
Indian Ocean for world markets. Gwadar Port can therefore
become a viable option for world community due to the following
reasons:

It is not within Gulf, thereby reducing chances of being blocked.

It provides shortest access to the land locked Afghanistan and
CARs.
It is located in close proximity of other regional ports of the Gulf.
Trans-shipment of Bulk Cargo.
Oil Storage, Refinery and Petrochemical related
industries/installations.
Export processing and Industrial Zone.
Export of minerals and live stock.
Services i.e hotel accommodation, tourism etc.
Fishing industry.
Ship repairs and Ship building.
Construction of Warehouses and Storages.
Beach Industries.
Port Related Facilities. Construction of under mentioned
facilities/industries is directly linked with the construction of
Gwadar Port and will provide employment opportunities for its
locals and the region.

Trade pact with Tashkent. Considering importance of trade from

CARs vis -a-vis up coming Gwadar port. Govt of Pakistan (GOP)
has very rightly concluded a trade pact with Tashkent. In this
Pakistan and Uzbekistan have agreed to enter into a trilateral
transit trade agreement with Afghanistan to benefit from the
Gwadar port facility and land routes. As per the joint communiqué
issued after meeting of reps of both sides on 29-30 Dec 2005, a
‘Joint Ministerial Commission’ has been formed to formulate
details/trade quantum and the modus operandi.

 Development Plans/Investment Opportunities for Balochistan

By making Gwadar the pivot of regional trade, Pakistan will

also attract considerable investment into its most under
developed province. These funds will allow construction of
roads and railways, linking the coastal region with rest of the
Pakistan, Iran and Afghanistan and will also, facilitate
cultivation of vast regions and exploration of natural
resources. This would ultimately help socio-economic uplift
of locals through various development projects.
The government on 3 October, 2004 has also announced Rs
3.000 Bn grant for speeding up development activities for
overall uplift of Baluchistan. Beside these the development of
Gwadar port would also benefit the overall economy of
province/country and will unlock its potentials. It is
anticipated that around 2.5 million people will get jobs with
start of this project. The government is setting technical
training centers in area to train people. Although Gwadar is
comparatively free from tribal influence, however people of
 area have two major concerns in their minds. Firstly, influx of
people from rest of the country may throw them in minority.
Secondly, local population lacks in education and other skills,
which may affect their career prospects. They have a fear
that people coming from other areas may grab the major
share of economic opportunities. General public therefore
show a resentment against government policies in form of
bomb blasts and demonstrations/destruction of sui gas
installation etc., however once economic lifts become visible
then people would certainly realize their short sightedness.
Oil Factor and the Alternate Port. Pakistan’s present
population is arround160 Million. With the present growth
rate of population, the country’s oil needs are increasing
continuously as well. The fact that our dependence on POL
gets further compounded as most of our defence needs are
also met through it. National oil reserves are also dependent
on the continuous POL from abroad. The war stamina
depends on the availability of POL to armed forces for
effective fighting. Therefore, keeping in mind the importance
of SLOCs for provision of uninterrupted oil supply, Gwadar
port would provide much-needed alternate for Karachi/
Qassim ports.

Economically importance of Gwadar:

Gwadar will help Pakistan to monitor the Sea Lines of

Communications (SLOCs) originating from the Persian Gulf and
the Strait of Hormuz. Gwadar will able to control the oil sea routes
and trade links among regions such as South Asia, Africa, Central
Asia, Gulf and Middle East. It will provide strategic leverage to
Pakistan vis-à -vis India, as the port is far from Indian reach as
compared to other two Pakistani ports. Gwadar will increase job
opportunities for Pakistani people and help in economic
development through transit trade fee and foreign exchange
reserves. Gwadar will boost up cooperation of Pakistan with other
countries in oil and energy sector. Tourism, trade, hotel industry
and state revenue will increase which will strengthen economy of
the country. Gwadar offers tax-free investment and trade, thus
attracting large number of foreign investors to open new
development projects and economic plans.

 Hindrance in way of Gwadar development:

The port for the time being is facing many challenges such as lack of
connectivity, under developed infrastructure and associated facilities.
There are security concerns which need to be addressed. Presently,
India is using all tactics to counter the development of Gwadar port. It
is heavily investing in Iranian port of Chahbahar with the investment
of US $85 million. After lifting of economic sanctions on Iran, India
is keener to work on Chahbahar as it considers Gwadar port as part of
Strings of Pearl strategy aimed to encircle India. India wants to reduce
Chinese influence in the region. India is attempting to reduce
economic importance of Gwadar. It has built roads from Afghanistan
to connect with Chahbahar for instance, Zaranj-Delaram road. It
clearly indicates that India would try its best to hinder the
construction of silk route from Pakistan. It has already raised serious
security concerns on the construction of CPEC. However, Pakistan
seriously needs to address these challenges and expedite its work on
Gwadar Port which is a key to economic prosperity, regional
connectivity and maritime development for Pakistan.
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