All that's Gwadar is not gold

Gwadar's economic potential needs a lot of time, planning, expertise, money and coordination for its realisation. Until that can happen, pitfalls abound for present and prospective investors

By M Ismail Khan

A goldmine for investment or world's biggest minefield of real estate hoax? A deep-sea port amidst humble fishing villages or South Asia's emerging hi-tech trade and industrial hub? As Gwadar inches towards an uncharted future, myriad of expectations, fears and apprehensions about it are reverberating all over the country, and among many 'investors' living abroad.

For a good one week I, along with a documentary film crew, zigzagged the entire Gwadar district from Pasni to Jeewani, from the Turtle Beaches of Daran, Tak and Astula Island to Mud Volcanoes around Ormara, and Crocodile habitat in Musa-e-Aab, from Pasni Fish Harbour to Pakistan's would be Dubai sitting right next to $ 250 million Gwadar Sea Port mainly gifted by China. The more we traveled, the more mind-boggling surprises we encountered. We were informed that the entire swaths of barren land, sand dunes and craggy hills on both sides of the newly built Makran Coastal Highway from Pasni to Gwadar town have been sold out, occupied or allotted. Between Gwadar and Jeewani, an area where even a proper road access does not exist, the land is also sold out. Billion of rupees have been changing hands and many local residents who were living a wretched life have suddenly become millionaires while many middlemen who bought land on throwaway prices have become billionaires. Villagers carrying goats in brand new vehicles is a common sight. One hears stories about people fainting while receiving unexpected amounts of money and their livestock eating up currency notes stored in jute bags in their adobe houses.

It's a financial tsunami to say the least -- never in their wildest dreams the Gwadarians might have expected their barren desert eclipsing real estate value in Islamabad, Lahore and Karachi. But many people, particularly government officials, raise a pertinent question: Do the millions of 'acres' being sold and purchased by developers or 'property agents' actually belong to the sellers? At the time of independence, Gwadar was not even part of Pakistan. The region was run by Muscat's royal family and it was only in 1958 when it was given away to Pakistan for a sum of 90 million rupees. The government of Pakistan, therefore, ought to be the sole owner of Gwadar's barren deserts. A bench of Balochistan High Court nullified allotment of land at a high profile development scheme only couple of months ago. Complex ownership issues and reported sale of same plots of land to more than one parties, make the whole real estate business scene tediously murky.

Following acquisition from Muscat, Gwadar was integrated into Pakistan as a remote tehsil of the then Makran district. Later, when Balochistan was accorded the status of a province, the area was made a district. Even then, it took a good three more decades for Islamabad to realise Gwadar's true geo-strategic potential.

Strategically located at the mouth of Strait of Hormuz, and right next to the oil and gas rich Iranian border, Gwadar presents tremendous opportunities as a future hub of trade and commerce for the growing economies of the Middle east, South and East Asia and the land-locked Central Asian Republics.

Recently completed Makran Coastal Highway from Karachi to Gwadar has understandably contributed to raising expectations about new opportunities in the region. The Gwadar Port is ready yet not fully operational. Pakistan Petroleum Limited is the only entity making limited use of the facility. Once the port is fully operational and construction work for its second phase gets going, more economic and trade activity is expected in the area.

For the time being, however, 'property agents' seem to be the main beneficiaries of the 'Gwadar opportunity'. There is a dire scope and need for more planning, resource allocation and a unified commend and control mechanism to catalyse the real potential of Gwadar. Or else one doesn't see Gwadar meeting expectations of its countless investors and stakeholders even with the kind of money floating in its deserts these days. A clear vision and concerted efforts for at least 20 years may take the area closer to what many property speculators are having us believe. Without that, Gwadar may well turn into another Islamabad New City or Taj Company -- only two of many financial scams in recent past in which hundreds, if not thousands, burnt their fingers.

The current upsurge in Gwadar rush is generally being credited to the post 9/11 banking reforms and steady flow of money from Pakistani community living abroad, who have been pouring their savings into what is considered 'safe' real estate business. The builders and developers in Gwadar have already received billions of rupees from various parts of Pakistan and abroad.

The million-dolor question however, is whether these property dealers, mostly from central Punjab and Karachi, will be able to honour their commitments. Do they have the expertise, resources and perhaps intentions to develop the Promised Land? Do most of them have the capacity, even with the fortunes they have netted, to establish high tech and costly desalination plants to fulfill minimum water requirements of a livable mega city, not to mention energy, waste treatment system and other infrastructures required as per agreed guidelines of Gwadar Development Authority.

Even if we assume that every thing goes as intended, it seems that most of the housing investors have kissed their cash goodbye for a good 15 to 20 years time minimum. That too, if jurisdiction and operations of Gwadar Development Authority (GDA), Balochistan Coastal Development Authority (BCDA), District Local Government (DLG) and other federal and provincial departments in the district are streamlined and geared towards a shared goal of implementing Gwadar Master Plan, which itself needs an upgrading into a comprehensive Gwadar District Master Plan. Lack of a unified command and authority, resource utilisation, empowered monitoring and course correction can lead to further chaos and confusion, to say the least.

Moreover, Gwadar is Pakistan's last frontier of pristine and unique coastal ecosystem. Home to an array of rich marine species and turtle beaches, the district houses many important and precious rangeland, wildlife and mangrove forests. Therefore, necessary environmental assessments and safeguards should be put in place to conserve Pakistan's precious natural heritage before actual infra and supra-structure development sweeps across the region.

Baloch sentiment is yet another dimension one needs to be mindful about. Already security is an issue in Gwadar following the murder of Chinese engineers last year. In addition to that, many local fisherman and tribespeople who do not own lands fear economic and political marginalisation. It is important that their concerns are allayed and treated in time. The locals who traditionally lived on deep-sea fishing, subsistence agriculture and pastoral practices need to be educated on the changes occurring right below their noses. Their integration in the development processes by enrolling children into schools, imparting skills and awareness about the blessings as well as blights of development will serve as lubricant for the economic and development engine that Gwadar has come to mean for Pakistan.

M Ismail Khan is a 'development analyst' based in Islamabad.