The China-Pakistan Axis: Asia's New Geopolitics (19 page)

The building of Gwadar port had been launched with great hopes for its transformative economic impact. Gwadar was a small fishing village located in a deepwater natural harbour, which Pakistan had purchased from Oman for $3 million in 1958 with a view to developing it as a port site. The opportunity to do so was once offered to the United States by Zulfiqar Bhutto in the 1970s.
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The Americans didn’t bite. A formal plan to build Gwadar into a major commercial centre was proposed in 1993,
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with the task handed to a British consortium a couple of years later, but the initiative was stalled by political and financing problems.
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Then in 2001, on the fiftieth anniversary of China-Pakistan relations, Chinese Prime Minister Zhu Rongji announced that China would underwrite the project.
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China agreed to provide $198 million of the $248 million required,
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and China Harbour Engineering Company—
the sister company of China Road and Bridge Corporation, which was rebuilding the KKH—took responsibility for its first phase.
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That involved the construction of three multipurpose ship berths and a service berth, and dredging of a deep-water channel, as well as erection of roads, port buildings and facilities.
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At the same time, a $200 million road link to Karachi,
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the Makran Coastal Highway, was given the go-ahead, and built by the Frontier Works Organisation,
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the Pakistani military entity that had been established to construct the KKH in the first place. Gwadar’s first phase was finished in 2006 and the port was opened to great fanfare at a ceremony in January 2007.
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Given that the port was developed partly in order to reduce the bottleneck at Karachi, the Makran Coastal Highway was of limited use—the real value would only come when Gwadar was connected up to the rest of Pakistan. That was expected to come during the second phase of the port’s development. The contract to run and manage the facility itself was given to the Port of Singapore Authority (PSA). It would involve the construction of four container berths, a bulk cargo terminal, two oil terminals, a roll on/roll off terminal, and a grain terminal.
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An oil refinery—to be built separately by China—was planned,
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along with the crucial high-quality road links to the Balochistan capital, Quetta, and Ratodero in northern Sindh.
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Phase 2, at a cost estimated to run between $600 million and $1 billion, would take Gwadar from an overdeveloped fishing village to a genuine commercial hub.
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Yet very little of “Phase 2” was ever undertaken. The oil refinery was never built.
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The PSA made derisory progress on developing the port. And after General Musharraf ’s departure in 2008, resources due to have been spent on infrastructure connections were diverted from his “pet project”.
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Gwadar stood virtually isolated. Mutual recriminations over the situation went on for years. The PSA and some sections of the Pakistani government blamed the navy, which had refused to hand over 584 acres of land that were earmarked for the port’s operational activities.
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Other sections of the Pakistani government blamed the PSA for failing to fulfil its commitments.
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Following protracted court battles, the Singaporeans pulled out of the contract, which was taken over in February 2013 by China Overseas Port Holdings Company.
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But the difficulties in building the roads, the PSA’s reluctance to develop the port, and the slow-motion legal process that finally saw Chinese companies stepping back in were not just the result of foot-dragging.

The port and associated developments have been a major target for Baloch nationalist groups. While the potential economic benefits of the project are undeniable, even political moderates in Balochistan believe that most of them will be diverted elsewhere in Pakistan, and that the project will be used by the Pakistani military to consolidate its presence in the region.
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Some described their opposition to the port as a “last stand” for the Baloch cause.
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Its success would bring about a huge population influx, with Gwadar expected to become a 2-million-person city, and the Baloch “fear that they will become a minority in their own land”.
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It is the less moderate who have had the most telling impact, though. On 3 May 2004, the Baloch Liberation Army killed three Chinese engineers and injured nine more working on the project, when a remote-controlled car bomb blew up the bus carrying them to the port.
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Subsequent rocket attacks struck Gwadar airport,
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a hotel where Chinese engineers were staying,
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and a Chinese construction company.
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Chinese workers narrowly escaped another bus bombing in 2007, though the Pakistani police protecting them were less fortunate.
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Many other attacks on roads, pipelines and other infrastructure in the province have simply gone unreported.

When it became increasingly clear by 2011 that Chinese companies would be taking over the running of Gwadar port from the Port of Singapore Authority, it raised the question of why they would risk assuming responsibility for a facility that was little more than a white elephant with an enormous target sign painted on it.
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Certainly they had been reassured that the Pakistani navy would be more forthcoming on the land rights issue than it had been with the Singaporeans, and there was the promise of money set aside for the necessary road building work. But the suspicion endured that non-economic motives must also be involved. Like the Karakoram Highway, Gwadar has never entirely convinced as a commercial proposition. The “transport and energy corridor” is not vulnerable only to security threats in Balochistan and to landslides and floods in Gilgit-Baltistan, but also to the cold logic of the market: for all the talk of how a pipeline would cut thousands of miles off the journey of a barrel of oil from the Middle East to China’s interior, the cost of sending it overland via Gwadar and Xinjiang would run at between four and five times that of the sea route through Shanghai.
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There are certainly scenarios in which such a route might be used, though they are rather bleak, featuring either naval blockades or worse,
as an article on Chinese strategy in the Indian Ocean suggests: “The wartime experience of the [Republic of China] showed that, if China’s “backdoors” could be kept open, a regime based deep inside the country could be kept alive—even if an enemy had managed to occupy China’s coastal ports.”
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They also stretch credulity, given how straightforward it would be to prevent the functioning of the corridor. One US naval expert observes that “it would be easier for the United States to prevent the unloading of oil at Gwadar than to blockade the Strait of Malacca”.
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But the standing point of curiosity has been whether the port might have utility even if it never became the commercial and energy transit hub that was once intended: instead becoming a permanent Chinese naval facility.

The Pakistani government has flip-flopped on the issue, alternating between touting the port as a potential expansion of its naval capabilities—even publicly claiming that China had agreed to help it establish a base there
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—and playing down this possibility as Indian scaremongering.
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The rationale for using Gwadar for this purpose is fairly clear: Karachi, the principal operating base for the Pakistani navy, was subjected to an Indian blockade in 1971
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and there was the serious prospect of a repeat in 1999.
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Blockading Gwadar, 645 kilometres further along the coast—“away from Pakistan’s traditional confrontation sea zone”, as a report from the Balochistan government put it—would be a more difficult proposition.
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In 2005, the Pakistani Chief of Naval Staff said that Gwadar would be “the country’s third naval base”, and would “improve the country’s defence in deep sea waters”.
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The port is sufficiently deep to accommodate submarines and aircraft carriers. And from China’s perspective, its proximity to the Persian Gulf may provide a potential location for oil transhipment, but it would also offer something unusual for the Chinese navy: a permanent, reliable facility for ships needing support points close to the Middle East, North Africa or East Africa. This seemed a long way off back in 2001. In my discussions with Chinese experts and officials over the last decade, scepticism about the military value of Gwadar and an emphasis on the economic rationale that underpinned the project was consistent—talk of its being developed as a naval base was dismissed as a myth.
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But in the last few years, a couple of things changed. The security situation in Pakistan deteriorated markedly, making the economic corridor plans look less and less plausible. And the Chinese navy embarked on an increasingly far-flung set of activities.

Since 2008, the PLA Navy has conducted the most extensive set of long-distance operations in its history. While its anti-piracy deployments in the Gulf of Aden provided the most significant ongoing test of the navy’s needs for overseas support locations, they were even more clearly in evidence during the huge evacuation of 35,000 Chinese workers from Libya in 2011.
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It was the first time that the PLA Navy had been deployed to conduct a NEO—non-combatant evacuation operation—to protect its citizens on the other side of the world, and with turmoil in the region continuing, it seemed to Chinese strategists as if it wouldn’t be the last time. While the exercise was a success, a great deal of chaos bubbled below the surface as the numbers of Chinese evacuees proved far greater than expected, requiring boats and planes to be chartered on an emergency basis at great expense.
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It raised the issue of which staging points in the region China could reliably expect to use in a crisis. China’s Sudanese friends allowed it to use Khartoum as the logistics point for air transport,
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but the refuelling location for the frigate,
Xuzhou
, which was sent to support and protect the evacuation, was the Omani port of Salalah.
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Chinese experts have argued that ports such as Salalah, Aden or Djibouti can be relied on for routine refuelling but that Pakistan is the likeliest country to agree to long-term arrangements for “more comprehensive supplying, replenishment, and large-scale repairs of shipboard weapons”.
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Trust between the two militaries makes it arguably the only plausible candidate for such a facility. The Libya incident also highlighted the value of forward deployed military assets—the only reason the
Xuzhou
could be used was because she was already operating in the Gulf of Aden as part of an anti-piracy mission. One of the definitive pieces of analysis on the evacuation contends that “from this point forward, there is a strong likelihood that the PLAN will seek to assume a more sustained presence in the Indian Ocean region, perhaps extending toward the Persian Gulf as well”.
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It was after the Libya deployment that the same Chinese experts and officials I had been interviewing started to change their tune. I increasingly heard the argument that even if the economic utility of Gwadar was fundamentally in doubt until the situation in Pakistan changed, its potential as a naval facility might change China’s calculations about the port’s value. When the Pakistani Defence Minister, Chaudhry Ahmed Mukhtar, made his statement about China agreeing to develop a naval base at Gwadar, the Chinese foreign ministry issued an official denial,
but as one expert familiar with the discussions put it: “It wouldn’t be a naval base. It would just be a facility to which we had access when we needed it. And we didn’t even agree to that during the visit, so he shouldn’t have made his statement. But that’s exactly what we’re considering.”
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The former Chinese ambassador to India, Pei Yuanying, has directly stated in an interview with the
People’s Daily
that “Gwadar port will become a logistics support base for supplies and maintenance along the route of large fleet when the Chinese naval fleet goes to the Suez Canal, the Mediterranean, and the Gulf of Aden” [
sic
].
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Existing plans for the development of the port are purely economic, and some Chinese and Pakistanis continue to see the finger-pointing at Gwadar as a distraction—whatever happens in Balochistan, the Chinese navy, if it wishes, can use Karachi, which is already its main repair facility in the Indian Ocean. “For us, Karachi is fine,” said one Chinese official. “It’s for Pakistan that Gwadar is really useful. They want us to upgrade it to a naval base that can be used by both Pakistani and Chinese ships. The main reason? India.”
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There is little surprise that the stories about Gwadar refuse to disappear, and it is now Chinese naval strategists rather than Indian ones who are talking up the port’s long-term prospects, however dire the short-term economic and security situation there appears. “The Singapore company put more value in the commercial benefits in operating the port, but for China, its strategic value is greater than the commercial significance,” said one Chinese expert. “I do believe China will build the port at the astonishing ‘Chinese speed’ to materialize the port’s strategic values.”
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The history of the Karakoram Highway’s construction is itself a demonstration that in China-Pakistan relations, strategic intent can—eventually—trump an array of physical, cultural, economic and security obstacles. The story is littered with disasters, almost as many man-made as natural. As Muhammad Mumtaz Khalid, the principal historian of the road, remarks: “Thoughtless urgency would become a peculiar feature of this mega-project, and perhaps for all future ones. Any presidential order, or for that matter any higher command dictates, would rarely be questioned by the Corps’ top brass regardless of the serious technical, financial and administrative problems, time constraints or frictions of terrain and weather.”
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Arbitrary deadlines and very poor preparation from the Pakistani side, especially for the extreme altitude, dogged the
early phases of a venture that was launched with extraordinarily minimal surveying or planning. The raising and dispatch of Pakistan’s Khunjerab force in 1966, which was supposed to begin the process of building the road down from the border, is described by one military officer as “the worst [operation] ever done by anyone”.
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Many of the first contingent needed to be rescued. In two years, the poorly prepared force had achieved only a 13km pilot cut, prompting an offer from the Chinese to take over the task. China had completed its portion of the road before the Pakistanis had even started theirs.
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The assumption of greater and greater Chinese responsibility for realizing the ambitious project became so pronounced that the Pakistani government, during the worst of its financial difficulties, even considered handing over the whole task to the Chinese and disbanding the newly established Frontier Works Organisation, the paramilitary body that had been leading the task on the Pakistani side.
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The road did enjoy its first “opening ceremony” in February 1971, but it was closed again almost immediately by floods and landslides, and while a desperate attempt to clear a route for the first Chinese trade delegation in July was successful,
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the 1971 war and its aftermath stalled most of the subsequent construction efforts.
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It would prove to be many years before the road was upgraded to a level that could be meaningfully considered functional. Even the second opening ceremony, which took place in June 1978 at Thakot bridge with Zia ul Haq and China’s Vice-Premier Geng Biao in attendance, was a false start.
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There was still over a year of additional work required, and the last Chinese workers only left Pakistan on 19 November 1979, “after a hot cup of tea at the chilly Khunjerab pass”, thirteen years after Ayub Khan had first given the project the green light.
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