Gwadar is very rarely out of the news this year as development of the international port continues to gather momentum. It’s an exciting time for all concerned and there is an obvious increase in interest from potential investors. Meanwhile, a small handful have a specific question and it concerns events in Gwadar back in 2005.
Was 2005 a boom period for Gwadar?
It is fair to say that for a brief period from 2005, Gwadar experienced something of a boom in its economy but the increase wasn’t sustained. At that time, reports show that Pakistan had only just started building the port itself. Financial interest came from China and from other countries who could see a time when the location was an important coastal outlet for surrounding, oil-rich regions.
An initial flurry of investment came as property magnates began to speculate as they saw the potential for Gwadar. The second phase of building was subsequently handed over to Islamabad as the Chinese, and others, began to take the position of observers.
It was from this point that development began to slow down. In part, this was due to China withdrawing. There were additional concerns around the world that Gwadar would be used as a military installation by the Chinese. Those concerns were loudly aired by the United States and that would clearly have deterred potential investment in the US.
Why is there a different financial landscape in 2019?
If there is one word that can be used to sum up the Gwadar port developments back in 2005, that word would be ‘speculative.’ Everyone involved knew that the area had potential but no-one knew exactly what Gwadar would be used for.
Fast forward to 2019 and specific plans are now in place. All the speculation has gone and, in particular, doubts over possible military use have been removed. China are back on board in a big way as they finance many projects via the CPEC and that should be the most encouraging sign for potential investment.
Why is the role of CPEC significant?
China has always held an interest in developing Gwadar and it partly funded the first phase of building back in 2005. Shortly after, the country took a back seat and that’s one of the reasons why growth in the city slowed down.
In 2013, CPEC was formed with China now fully committed to developing projects in Pakistan and in Gwadar specifically, Billions of dollars have been invested and that’s a clear sign that China will be here for the long term. It’s not just China who are committed to Gwadar but their continued involvement is a significant one. With projects in development and the first round of properties ready for handover, it’s clear that Gwadar has moved on from 2005 and is ready for sustained and unstoppable growth.