Gwadar as Trade-Transit

Gwadar as Trade-Transit

Gwadar as Trade-Transit

The year of 2020, has been very progressive for Gwadar port despite of the pandemic and lockdowns. The eastern and western countries consider the Gwadar port as an emerging dock in the district for trade transit. Pakistan is sanctified with the geographical location as its border connects with Afghanistan, China, and India. Moreover, it links to the remaining countries through Arabian sea. This positioning has encouraged multifaceted trade with other adjacent countries. The only choice for Afghanistan to trade-transit is via Pakistan’s Gwadar port. 

Second Afghan Transit Cargo

On 15th December 2020, the second Afghan transit cargo arrived at Gwadar port. Since the arrival of the first trade cargo there have been a steady flow of international cargos arriving at Gwadar port. This was the second trade transit under Pak-Afghan trade-transit agreement. Second Afghan transit cargo contains 22,000 tons of DAP fertilizers. 

The First Trade-Transit

Gwadar port imported urea and DAP fertilizer for the very first time on 14th January, 2020. Afghan trade transit was initiated officially via Gwadar port in the first month of 2020. UAE has sent a container consignment to Pakistan through ships. Moreover, on 29th May, a ship from Australia brought 16,400 tons of fertilizer which will transit to Afghanistan after unloading and bagging. 

The picture shown below is taken on January 14, 2020, welcoming the first cargo consignment under Pak-Afghan trade-transit agreement.

The Agreement

Afghan Pakistan transit trade agreement (APTTA) is a replacement to the Afghanistan transit trade agreement (ATTA) that was signed in 1965. This was signed between Pakistan and Afghanistan so that there could be a smooth activity of duty-free export and import of goods using the Pakistani port of Karachi. Prime Minister Abdul Razak Dawood announced this progress through his social media. He marked this development as a new age in Pakistan’s trade operations by sea. This an initial step in making Gwadar port hub for international trade.

Afghanistan transit trade agreement (ATTA) did not provide Pakistan with the rights to export their good in other countries using afghan border. This trade agreement wont only boosts Pakistanis economy, but also help Pakistan stronger their ties with Afghanistan. Gwadar port plays an important role in Afghan Pakistan trade transit because it is close to Chabahar, an Iranian port that is being industrialized by India with the permission from Iran. India started this development because, Pakistan is not allowing India to transport it’s good to Afghanistan using Wagha border. 

Government Officials’ Statement

Abdul Razak Dawood also announced that this would be the first time in history that, DAP Fertilizer won’t be bagged at foreign ports, but instead it would be bagged locally. Once the fertilizers are bagged, they would be dispatched on trucks to Afghanistan. This process of unloading, bagging and then loading it again, would create employment opportunities for the local’s men of Baluchistan. Gwadar port being functional for Afghanistan’s import and export will elevate the opportunity for the locals of Balochista and Makran.

The commerce and investment minister also announced that Pakistan government has given a green signal in the form of special permission to Afghanistan, that they can also transit wheat and sugar using Gwadar port. Afghanistan heavily depends on Pakistan as this trade transit is considered to be source of income for its people as well as the business community. Afghanistan is affected badly if the flow of this trade transit is paused or delayed from Pakistan. This causes a shortage of commodities in Afghanistan as well as it increases inflation causing problems for the people of Afghanistan. 

Importance of Pak-Afghan Trade-Transit

Gwadar port is playing a significant role in Afghan trade and is the only mean for Afghanistan to import and export their products and goods. China has invested a huge amount in the construction of Gwadar port, approximated around 250 million dollars. According to the CEPC agreement, China will get the 91% of earnings generated by the Gwadar port through trade for the next 40 years. Currently, the Afghan trade is the only source of income for Gwadar port. Hence, Pak-Afghan trade is essential for the operations to run smoothly at the dock and to pay off debt to China.

Shahid Beheshti port is an Indian project, the port connects India with Afghanistan. India exported goods to Afghanistan through Chabahar port in 2018. However, Afghanistan is now preferring Gwadar for trade-transit. The relation of Pak-Afghan has put an end on the functions of Shahid Beheshti port, which is a loss for India as they invested around 100 million dollars in the project.

Economic Impact 

The better trade-transit facility would provide a way to connect the south Asian countries to central Asian countries. Pakistan will get the advantage even if it is only getting used as a transit for import and export of goods for other countries. The trade-transit would create employment for the basic local labors as they will get a chance to pack and load the goods shipped to Pakistan to export them to other countries. Pakistan will get a chance to earn revenue from the customs and duty charges. As the economic activities on Gwadar port is rising, Pakistan will soon give a boost to international trade globally. Afghanistan has its border with Iran and Tajikistan, Pakistan can export their products to underdeveloped countries via Afghanistan. This way, we can make grounds to increase the productivity of our own local products and can be the provider to many central Asian countries. Pakistan is the major exporter of cotton, with the enriched culture and aesthetic; we should focus more on garments and textile industry to stable the economy of Pakistan by increasing the ratio of export. 

Gwadar is a nature’s gift to Pakistan, and it is so well located that it acts as a center of trade in Asia. The second trade-transit is a sign of growing economy and a bright future for Gwadar port and Pakistan as well. On December 15th, a vessel of DAP fertilizer was shipped to Pakistan and loaded in trucks to get exported to Afghanistan. Pakistan is a route for many countries in order to trade as it is connected with Afghanistan, Iran, China, India, Arabian sea and Indian ocean. In 2020, the trade-deficit of Pakistan reduced by 1,587 million dollars, showing an import in exports by 468 million dollars. We wish that Pakistan will continue to grow in the near future, economically and globally.

 

Date : 
Sunday 10 January 2021
Author : 
Admin
Source : 
Globbiz Admin
Tag : 
Investement in Gwadar,