12 April 2016

*** Chinese-Pakistani Project Tries to Overcome Jihadists, Droughts and Doubts

By Saeed Shah 
April 10, 2016

Developing the fishing town of Gwadar into an economic hub is part of Beijing’s plan to forge new trade routes

Pakistan's leader, Nawaz Sharif, right, met with his Chinese counterpart President Xi Jinping in Islamabad last year to discuss the planned economic corridor linking the two nations. Photo: Associated Press 

GWADAR, Pakistan—A Pakistani brigade of 2,000 soldiers guards a small contingent of Chinese workers here from the threat of jihadists and separatists, reflecting the challenge of turning this remote fishing town into the hub of an economic corridor between the two nations.

Developing Gwadar would give China a new trade link from its relatively undeveloped west to key Arabian Sea shipping routes at the mouth of the oil-rich Persian Gulf—giving it potentially strategic as well as economic leverage. 

Pakistan hopes that Chinese infrastructure investment will boost industrialization in a country that has struggled to provide for its 200 million people and give it a second major port besides Karachi—operating near capacity now, and blockaded by India in past wars.

Work on Gwadar has gained pace following the transfer of land for a Chinese industrial zone here and the hastening of highway construction. It is part of Beijing’s broader plan to forge new east-west trade routes via a network of ports, pipelines, roads and railways.

Gwadar is the key to the trade portion of the China Pakistan Economic Corridor, a $46 billion program in which Beijing will also build power plants in Pakistan to plug an energy shortage. 

Zhao Lijian, the deputy Chinese ambassador to Islamabad, said the model for Gwadar was the Chinese port of Shenzhen. “Thirty-five years ago, Shenzhen was just a fishing village, like Gwadar, he said. “It has been transformed into a modern industrial city.”

But the challenges are immense. Shenzhen’s success piggybacked on next-door Hong Kong, whose gross domestic product is greater than the whole of Pakistan. Gwadar is 400 miles from the nearest big city, Karachi.

A view of Gwadar port in 2014. Photo: Zuma Press 

Gwadar itself, an arid spit of land jutting into the Indian Ocean, is so short on drinking water that during a particularly parched period in December thieves broke into homes to steal canisters of water, residents said. The thefts riled locals already unhappy about the plans, which they say they hadn’t been consulted over.

“How can you build a major port and a major city where there is no water?” said Kaiser Bengali, economic adviser to the chief minister of Balochistan, the sparsely populated western province where Gwadar is located. “There are no answers to anything. Transparency is seriously lacking.”

Gwadar planners said they would build more dams and a desalination plant. But with the country’s electricity grid 400 miles away, the town’s power is imported from neighboring Iran, a system that leaves the area with scheduled daily blackouts.

Then there is security. Balochistan has been battered for years by a separatist insurgency and jihadists. The military says that insurgents killed 46 workers building a new road between Gwadar and the western Pakistani city of Quetta in the past two years. 

To protect the economic-corridor projects across the country, the military is raising a dedicated force of 10,000, which officials say they may double in the coming years. “Security in Gwadar is much better now,” said district police chief Muhammad Jafer. “People are positive, shops are open.”

But the heavy security has scared potential Chinese investors who visit Gwadar, some Chinese say privately. A single Chinese national being driven in Gwadar is given a multivehicle security detail that includes police, paramilitary and army personnel, with the road used closed to all other traffic, officials said. 

The Chinese are pushing for a 65-mile fence around the whole town, with a special permit required by anyone—including locals—to enter, according to Pakistani and Chinese officials. The Pakistanis believe they can provide sufficient security without a fence.

A soldier mans a gun at a check post of a construction site on the outskirts of Gwadar in January. Photo: Reuters 

The project first kicked into high gear in November after Pakistan handed a state-owned Chinese company four square miles of Gwadar land under a 43-year lease to set up tax-free businesses. It is here that China hopes to develop the logistics, processing and manufacturing operations that would turn this desolate outpost into an industrial center.

Zhang Baozhong, chairman of China Overseas Port Holding Company, which runs Gwadar port, said that his company planned to spend $4.5 billion on roads, power, hotels and other infrastructure for the industrial zone, which he said would be open to non-Chinese companies. The firm also plans to build an international airport and power plant for Gwadar.

‘How can you build a major port and a major city where there is no water?’ 

—Kaiser Bengali, economic adviser to the chief minister of Balochistan 

Pakistan, along with China and multilateral organizations, also recently sped up the building and upgrading of roads across the country to provide routes for the 1,500-mile journey to China, with industrial parks planned along the way. Eventually, a rail link will be added.

The new road to Quetta, a key western artery, is scheduled to open by mid-2017.

Pakistan estimates the corridor project will create some 700,000 jobs within the next decade and add up to 2.5 percentage points to the country’s growth rate by 2030.

China is also deploying infrastructure firepower elsewhere in Africa, the Middle East and Asia. But the Pakistan initiative is the most ambitious in scale and complexity, said Andrew Small, author of “The China-Pakistan Axis.” 

“The question is whether China can pull off the same trick away from home turf,” said Mr. Small. 

—Jeremy Page in Beijing contributed to this article.

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