Free Zone of Gwadar another major achievement for CPEC

By Shafei Moiz Hali

The China-Pakistan Economic Corridor (CPEC) is undoubtedly the most important ongoing project in Pakistan and the development on the project entered a new phase on 29th January 2018 due to the launch of the first phase of Gwadar Port's Free Zone and the Gwadar Expo 2018. Pakistan’s economy had been badly hit after the global financial crisis of 2008 and the economic blows were exacerbated by the terrorists and dire energy shortage as 70% of the Foreign Direct Investment in Pakistan fleeted, after which Pakistan’s economy started to register dismal growth levels between 3 to 4 percent until China applied jumper cables on Pakistan’s economic engine in the form of CPEC. 

Ever since President Xi Jinping visited Pakistan and finalized the CPEC deal, Pakistan’s economy has started to register growth levels beyond 5 percent. With each and every development under the CPEC, signs of economic prosperity and the morale of the people of Pakistan have started to rejuvenate. The Gwadar Expo 2018 and the inauguration of the Gwadar port’s Free Zone is one such major development as it has received massive reception internationally as well as locally. Enterprises from China, Europe, USA, Africa, Iran, Saudi Arabia and many more sought registration for the highly anticipated event.  

Photo taken on March 23, 2017 shows the Gwadar port area at sunrise in Gwadar, Pakistan.[Photo: Xinhua]

The inauguration ceremony was chaired by the country’s Prime Minister Mr. Shahid Khaqan Abbasi. Mr. Abbasi in his inauguration speech said that, “China Pakistan Economic Corridor (CPEC) is a proof of everlasting friendship between China and Pakistan and that it is the most important initiative of our generation.” He added that, “this inauguration is a realization of the vision given by Chinese President Xi Jinping.”

Mr. Abbasi is indeed correct in his remarks about the realization of President Xi’s vision. As 5000 exhibitors and 10,000 visitors applied for the exhibition but only 200 companies and 5000 visitors were allowed due to logistics issues. Businessmen from Iran, China, Afghanistan, Saudi Arabia and Oman participated in the expo. The hustle and bustle was such that, the Pakistan International Airlines had to increase its Karachi-Gwadar flights to four shifts a day. President Xi’s vision for Belt and Road Initiative is to boost world trade through an interconnected world, while creating a win-win scenario for all. The inauguration of the first Gwadar Free Zone and the Gwadar Expo 2018 is an example of the realization of President Xi’s vision. 

Mr. Zhang Baozhong, chairman of China Overseas Ports Holding Company Pakistan (COPHC) one of the organizers of the event said, “With the construction of the free zone, the port city of Gwadar will become a big commercial hub in the region”, he added that, “the development of Gwadar would help to improve Pakistan's overall economy and people's lives.” This all is possible because Gwadar under the funding of CPEC will be transformed in to an engine of economic growth not only for the local people but for the region at large.

The event holds tremendous significance not only for Pakistan but for China as well. For Chinese companies the Gwadar Free Zone and the Gwadar Expo are major platforms to do business with other countries which are interested thus significantly boosting trade for China. For Pakistan the significance of these developments can be judged from the fact that, the locals of Gwadar only had two major sources for income. The first source was through fisheries and the second through real-estate. Ever since the developments at the Gwadar port have started to take shape the land prices have increased 400 times. With the influx of investments and interest by international investors the local economy has started to boom especially the service industry. All hotels and rest houses are booked because of the occasion. Since Gwadar is situated at a strategic location on the world map and the opening of the first Gwadar Free Zone and the Gwadar International Expo a commercial hub has been created providing a swift platform where buyers, sellers, service providers are brought at one place where collaborations and future business partnerships can be erected.

COPHC, the operator of Gwadar port during the ceremony explained that, around 30 companies from various commercial sectors like; hotels, banking, logistics and fish processing sectors have officially registered with the Gwadar Free Zone (GFZ) and the direct investment from these sectors alone accounts for 474.3 million U.S. dollars and theses investments are forecasted to yield profits around the tune of 790.5 million U.S. dollars once operational. Apart from trade agreements the COPHC and the Gwadar District Council signed an agreement for poverty alleviation which will ensure that, very poor families in the region will be provided financial assistance and other opportunities for sustainable growth.

Pakistan’s Minister for Planning and Development Mr. Ahsan Iqbal also made a speech at the occasion and said that, “CPEC has transformed Pakistan-China relations into a strong strategic economic partnership.” The Chinese Ambassador to Pakistan Mr. Yao Jing was also at the inauguration ceremony and while addressing the event he seconded Mr. Ahsen Iqbal’s comments and said, “CPEC project was the project of common development and prosperity, adding that development of locals was a major purpose behind the Gwadar projects.”

The aura of Gwadar city prior to the event spoke highly of the economic prospects of the GFZs and the Gwadar Expo 2018 which is going to be an annual feature. Indeed CPEC is transforming the lives of the people Pakistan for the better as more and more employment opportunities are being created with each development and as President Xi’s vision is taking shape.

(Dr. Shafei Moiz Hali studied at George Mason University, Virginia, USA and specialized in the field of International Commerce and Policy. He did his PhD from Huazhong University of Science and Technology, Wuhan, China specializing in Chinese foreign policy focusing on the Belt and Road Initiative and energy issues. Currently Dr. Hali is working as an Assistant Professor with the Faculty of Contemporary Studies, National Defence University (NDU) Islamabad, Pakistan.)