Uzbekistan Eyes Pakistan’s Gwadar Port for Exports

A southbound logistics corridor via the Gwadar Port can increase regional connectivity and trade, offering Central Asian states direct access to the deepsea port. Plans are also afoot to connect Uzbekistan with Pakistan via Afghanistan through railway.

Posted on 03/23/21
By Special Report | Via PakistanWeek.org
Gwadar’s dry bulk cargo business grew more than 1,100 percent in 2020. (Photo by Moign Khawaja, CC license)
Uzbekistan is pushing for a diplomatic move among Central Asian countries, including top-level diplomatic visits to Tajikistan and Turkmenistan, for a southbound logistics corridor via the Gwadar Port.

Afghanistan has become the first landlocked Central Asian country to benefit from using the Gwadar Port in transshipment trade. In 2020, the country imported 43,000 tons of fertilizers via the port, contributing to its agricultural development.

The port’s dry bulk cargo business grew more than 1,100 percent to 57,000 tons in 2020 compared with 2018.

Uzbekistan, the world’s sixth-largest cotton producer, sent a high-level delegation earlier this week to the Chinese-invested Gwadar Port in Pakistan’s Balochistan province to look for logistics opportunities that might help it export its cotton, the Global Times reported.

Analysts said the move highlighted the big potential demand countries have for an international public facility such as the Gwadar Port, a deep-water port that may open a coveted sea trade option for landlocked Central Asian countries.

A 16-member high-level delegation from Uzbekistan, led by Vice Minister of Railways Akmal Kamalov and the country’s Ambassador to Pakistan Oybek Arif Usmanov, visited the port, according to a press release from the China Overseas Ports Holding Co, the port’s operator.

Accompanied by Gwadar Port Authority Chairman Naseer Khan Kashani and Zhang Baozhong, chairman of the China Overseas Ports Holding Co, the delegation observed the loading/offloading of cargoes by a containership operated by Chinese shipping giant COSCO Shipping Holdings. They discussed the matter of regional connectivity and the possibility of building and investing in a logistics park at the Gwadar free trade area.

Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told Global Times that the Gwadar Port has the best infrastructure among all ports in the region.

“The infrastructure there is superb. Both in terms of its deep-water berths and its onshore port infrastructure, the Gwadar Port beats its peers in Iran and India,” Zhou told the Global Times.

However, for such a southbound corridor to work, other regional countries including China and Iran will have to be involved to make an overland passage possible, given the current instability in Afghanistan, Zhou said.

Located in Pakistan’s southwest province of Balochistan, the Gwadar Port is a key project of the China-Pakistan Economic Corridor, a flagship project of the China-proposed Belt and Road Initiative.

According to data from the US Department of Agriculture, Uzbekistan exported 503,000 tons of cotton in 2015, with Bangladesh and China as its leading destinations.

The country’s cotton exports fell in recent years due to a shrinking planting area and an increase in domestic consumption.

Uzbekistan-Afghanistan-Pakistan Railway Line

Central Asian states for long have explored Pakistan as a possible transit route for their exports. However, in recent years the idea has shifted to the drawing board. Railway developments in Central Asia have made the headlines several times recently, with Pakistan and Uzbekistan playing a central role. Once more, they are the leading players of a potential railway connection, this time between Uzbekistan-Afghanistan-Pakistan.

This line would provide sea access to the landlocked countries via the Pakistani ports in the Arabian Sea. The three countries presented a joint proposal for a five-billion-dollar investment to build 537 kilometers of railway between Mazar-e-Sharif in Afghanistan and Peshawar in Pakistan. The railway line will also pass through the Afghan capital city Kabul.

Following some infrastructural upgrades, Uzbekistan had already built a railway link towards the Afghan city Mazar-e-Sharif. Afghanistan has also followed a trajectory of infrastructure upgrades, in coordination with Turkey. It also launched some interesting rail links during 2020, like the one with Iran. Their joint plans with Pakistan seem ambitious, promising, but at the same time, they present some significant difficulties.

Representatives of the three countries met in Tashkent recently to discuss the funding for the project which is expected to cost $5 billion. The main part of the project will be the construction of railway tracks between Mazar-e-Sharif and Peshawar. The new line will include both passenger and freight high-speed trains, according to Pakistan’s Minister for Railways, Azam Kwan Swati.

“The initiative will connect Central and South Asia by the shortest route and open Pakistan’s seaports to the Central Asian and Eurasian railway systems to boost trade flows and strengthen the regional economy”,  Razak Dawood, Pakistan’s commerce and investment advisor, was quoted by Gulf News as saying. All parties concerned will benefit from the new route since it will facilitate bilateral import and export trade.

Furthermore, it remains to be seen whether the new project will become part of China’s Belt and Road Initiative or whether it will benefit more from a connection with Russia. In any case, both options could provide an extra transport solution when it comes to the New Silk Road and Europe.

This story was developed from content published in Global Times.

 

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