Hoping to extend maritime reach, China lavishes aid on Pakistan town

China is lavishing vast amounts of aid on a small Pakistani fishing town to win over locals and build a commercial deep-water port that the United States and India suspect may also one day serve the Chinese navy. Beijing has built a school, sent doctors and pledged about $500 million in grants for an airport, hospital, college and badly-needed water infrastructure for Gwadar, a dusty town whose harbor juts out into the Arabian Sea, overlooking some of the world’s busiest oil and gas shipping lanes.

The grants include $230 million for a new international airport, one of the largest such disbursements China has made abroad, according to researchers and Pakistani officials. The handouts for the Gwadar project is a departure from Beijing’s usual approach in other countries. China has traditionally derided Westernstyle aid in favor of infrastructure projects for which it normally provides loans through Chinese state-owned commercial and development banks.

“The concentration of grants is quite striking,” said Andrew Small, an author of a book on China-Pakistan relations and a Washington-based researcher at the German Marshall Fund think tank. “China largely doesn’t do aid or grants, and when it has done them, they have tended to be modest.” Pakistan has welcomed the aid with open hands. However, Beijing’s unusual largesse has also fuelled suspicions in the United States and India that Gwadar is part of China’s future geostrategic plans to challenge US naval dominance. “It all suggests that Gwadar, for a lot of people in China, is not just a commercial proposition over the longer term,” Small said.

Beijing and Islamabad see Gwadar as the future jewel in the crown of the China-Pakistan Economic Corridor (CPEC), a flagship of Beijing’s Belt and Road initiative to build a new “Silk Road” of land and maritime trade routes across more than 60 countries in Asia, Europe and Africa. The plan is to turn Gwadar into a trans-shipment hub and megaport to be built alongside special economic zones from which exportfocused industries will ship goods worldwide. A web of energy pipelines, roads and rail links will connect Gwadar to China’s western regions.

Port trade is expected to grow from 1.2 million tonnes in 2018 to about 13 million tonnes by 2022, Pakistani officials say. At the harbor, three new cranes have been installed and dredging will next year deepen the port depth to 20 m at five berths. But the challenges are stark. Gwadar has no access to drinking water, power blackouts are common and separatist insurgents threaten attacks against Chinese projects in Gwadar and the rest of Baluchistan, a mineral-rich province that is still Pakistan’s poorest region.

Security is tight, with Chinese and other foreign visitors driven around in convoys of soldiers and armed police. Beijing is also trying to overcome the distrust of outsiders evident in Baluchistan, where indigenous Baloch fear an influx of other ethnic groups and foreigners. Many residents say the pace of change is too slow. “Local people are not completely satisfied,” said Essar Nori, a lawmaker for Gwadar, adding that the separatists were tapping into that dissatisfaction. Pakistani officials are urging Gwadar residents to be patient, vowing to urgently build desalination plants and power stations.

Cautionary Tale

China’s Gwadar project contrasts with similar efforts in Sri Lanka, where the village of Hambantota was transformed into a port complex - but was saddled with Chinese debt. Last week, Sri Lanka formally handed over operations to China on a 99-year lease in exchange for lighter debt repayments, a move that sparked street protests over what many Sri Lankans view as an erosion of sovereignty.

The Hambantota port, like Gwadar, is part of a network of harbors Beijing is developing in Asia and Africa that have spooked India, which fears being encircled by China’s growing naval power. But Pakistani officials say comparisons to Hambantota are unfair because the Gwadar project has much less debt. On top of the airport, Chinese handouts in Gwadar include $100 million to expand a hospital by 250 beds, $130 million towards upgrading water infrastructure, and $10 million for a technical and vocational college, according to Pakistani government documents and officials.

“We welcome this assistance as it’s changing the quality of life of the people of Gwadar for the better,” said Senator Mushahid Hussain Sayed, chairman of the parliamentary committee that oversees CPEC, including Gwadar. China and Pakistan jointly choose which projects will be developed under the CPEC mechanism, Sayed added. When China suggested a 7,000 m runway for the new airport, Pakistan pushed for a 12,000 m one that could accommodate planes as large as the Airbus 380 and be used for military purposes, according to Sajjad Baloch, a director of the Gwadar Development Authority.

The scale of Chinese grants is extraordinary, according to Brad Parks, executive director of AidData, a research lab at the US-based William and Mary university that collected data on Chinese aid across 140 countries from 2000-2014. —Reuters