Pakistan: PM Sharif's Efforts To Reinvigorate Gwadar Port Project Faces Resistance From Locals Led By Maulana Hidayat-ur-Rehman Baloch

Shehbaz Sharif, who was elected as Pakistan's Prime Minister in April this year, is on an overdrive to expedite Chinese-funded infrastructure development projects that lost momentum under his predecessor Imran Khan. The apparent push from the newly selected PM aims to keep Beijing in good humour and shore up Pakistan's beleaguered economy.

In June alone, Sharif made two trips to the port town of Gwadar, which has rarely seen any high-profile visits. Apart from Sharif, the planning minister and a top prime ministerial aide also visited Gwadar in a bid to reinvigorate the development of the port town, a critical component of the China-Pakistan Economic Corridor (CPEC).

China-Pakistan Economic Corridor (CPEC)

In December last year, Pakistan and China agreed to use the full potential of the Gwadar Port in Balochistan province.

CPEC remained dormant during the tenure of the previous Pakistan Tehreek-e-Insaf (PTI) government, but lately, there has been some progress after the last political regime brought in Khalid Mansoor as special assistant to the PM on CPEC affairs.

Local Resistance To Gwadar Port

The overtures being made by the ruling dispensation to China, however, run the risk of running aground if the government cannot resolve the simmering discontent with the local fishermen community.

The emergence of Maulana Hidayat-ur-Rehman Baloch, a local leader of the Jamaat-i-Islami (JI) who has gained considerable popularity, is complicating the government's efforts to expedite the port development work.

Rehman, who hails from from the local fisherman community, has threatened to shut down the strategic Gwadar Port if the government does not fulfil the promises it made in the agreement signed in April this year to end a month-long sit-in in the port city.

The main demands of the Gwadar rights movement including freeing the coast of Balochistan from the trawler mafia, opening border points in Gwadar, eliminating drug trafficking and removing unnecessary check-posts by the Pakistan military.

An Idle Port

Gwadar is a port city located on the southwestern coast of Balochistan, Pakistan. The city is located on the shores of the Arabian Sea opposite Oman.

The Gwadar port project was conceptualised in 2013 when a little-known state-owned company, the China Overseas Port Holding Company (COPHC), acquired the port for 40 years on behalf of Pakistan. The port is the crown jewel of the CPEC project, and it is where both countries hope the logistics of incoming and outgoing cargo will be handled for an international market.

Despite Gwadar's "strategic positioning" as one of the "best deep sea ports" at the mouth of the Persian Gulf, which facilitates the movement of "one-third of global oil every year", the port has failed to bring business. The reason for the slow pace in trade is not just poor marketing. Gwadar still does not have power, water, road connectivity, internet and cellular networks or gas.

Pakistan and China are making a considerable effort - and pledging close to $700 million in investment – to transform what was once a sleepy fishing town into a vibrant trade hub, complete with a seaport, airport, major road connections and a trade zone.

The development efforts have run into obstacles. As recently as May, the city had no sustainable supply of electricity amid scorching heat of 42 C. Access is equally difficult, with just three flights per week between the town and Karachi.

Unlike Karachi and Qasim ports (also in Karachi), whose infrastructure expanded as they became major global freight hubs, little development had happened in Gwadar before the CPEC project's launch in 2013.

The New Gwadar International Airport, which will be Pakistan's largest, should have been completed a few years ago, is still under the implementation stage and is due to open in September 2023, even though China provided a $230 million grant for the project.

The road-link project, namely the $179 million Eastbay Expressway, which connects the port with the free zone and the city, was completed only in June. China has provided interest-free loans for the scheme.

To sort out power issues, Sharif recently sent his power minister to Iran to sign a memorandum of understanding on an additional 100 megawatts of electricity for Gwadar. The previous government of Imran Khan delayed the 29-kilometre-long transmission lines for the supply of 100 megawatts from Iran, whereas the Iranian side had completed the project at its end.

In addition, two other schemes, $14 million worth of 1.2 million gallons per day desalination plant in Gwadar and $32 million worth five million gallons per day desalination plant, remain at a very initial stage of work.

Courting China

Pakistan is in the grip of an economic crisis that has seen foreign exchange reserves dwindle, fuel prices surge, and prolonged blackouts occur as the country seeks a bailout from the International Monetary Fund (IMF). In June, the inflation rate soared to 21.3 per cent on the year, the fastest pace of price rises in over a decade.

Sharif is aware of Pakistan's highly uncertain economic future and is thus keen to improve ties with its "all-weather friend" China has invested in Pakistan in the past regardless of political and security issues and is a major supplier for the Pakistani military.

Nevertheless, experts say Sharif is doing his best to salvage CPEC, as China is one of Pakistan's most important strategic allies and partners that have helped Pakistan in the toughest of times after friction under the previous PTI government of Imran Khan.

The sticking point is the pending payment of roughly 300 billion rupees ($1.5 billion) to Chinese power producers. Sharif's government tried to temporarily smooth this over by ordering the release of 50 billion rupees. Beijing has started to respond to Sharif's courtship. Last month, Chinese banks lent Pakistan $2.3 billion to help shore up its forex reserves.