What is the Gwadar Free Zone?

Located just 7km away from the port, the northern part of Gwadar has seen some significant investment and developments in the area lately. Commonly known as the Gwadar Free Zone, the region has been much talked about for the recent tax exemptions that were approved to businesses investing here. In what is being seen as a big step to take the Pak-China bond to a new level, the Gwadar Free Zone holds a significant position in the business relationship.

The Gwadar area of Balochistan province is known for its exemplary store of natural resources. However, unlike most other naturally rich places in the world, the Gwadar area has been defined by its significant development. Locals have experienced a rise in poverty and unemployment in the distant past but that is certainly set to change over the coming years. Construction on the Gwadar Free Zone started as soon as investments from Chinese giants; The China Overseas Ports Holding Ltd arrived in the sum of $250 million. Phase 1 was inaugurated in 2018 with Phase 2 in development.  The company constructed a massive 25-acre modern industrial park with all the modern amenities.

This project and many other subsequent developmental projects have created job opportunities for the locals. The recent developments have also been highly regarded by the officials in Balochistan too.

In a recent interview, the provincial government spokesman Liaquat Ali Shahwani, recognised the failures of the past government while he quoted:

“Despite having precious natural resources, the province lacks this important facility and depends on laboratories of other provinces for this purpose.”

China and Pakistan in unison have realised the strategic and economic significance of the port of Gwadar. It is the cornerstone of the whole trade that happens in the area and critical to building trade with the South West and Central Asia. The area is known for carrying out almost 40 per cent of the oil shipment transits. Hence the strategic location of the Gwadar will give Pakistan and China an upper hand in the region. When transits happen on a large scale at some port, the areas around the port are also the beneficiaries to large scale development.

The recent inaugurations of the developmental projects in the Gwadar Free Zone like the 300MW coal power plant and others will provide a sustainable effect on the economy of Balochistan and Pakistan as a whole. The public will reap the benefits of all these projects throughout the initial phases of the projects to its final development phase. The pace of these developmental projects has increased even more after the tax exemptions that the Pakistani government gifted investors looking for business opportunities in the Gwadar Free Zone.

The businesses that are to be established in the Gwadar Free Zone area are set to enjoy tax benefits for 23 years. Besides providing enough time to investors to cover their expenses and work on the profits, this step has also been successful in bringing the attention of business owners from all over the world to the Gwadar Free Zone. According to reports, more than 30 Pakistani and Chinese investors have already moved in with direct investments worth more than three billion Yuan. China has already planned to develop the area around Gwadar and the Free Zone as a significant commercial hub. This gives more potential to the thought of producing jobs for locals and a good lifestyle too.

The Gwadar area has been known for the abundant coastal heritage, and the Chinese seem to be the first to recognise it. The Gwadar Port project to help China make its mark in the Arab waters is being seen as the most significant Chinese investment in Pakistan till date. The recent policies introduced in the Gwadar Free Zone have lured investors and at the same time bounded them to complete the projects and start production within a year.

The COPHC chairman in a recent address notified, “So far, 41 investors have come forward to invest about $500 million in Gwadar Free Zone in the first phase. These industries are being set up in sectors of logistics, edible oil, piping, and halal food.”

The woes of the local people that have been a significant issue in the last few years as well as the Pakistani government are moving to put to rest finally. 

The China Overseas Ports Holding Company (COPHC) Gwadar Chairman Zhang Baozhong also mentioned, “We have completed the master plan of the Gwadar Free Zone that will be built in four phases over a period of seven years. Once the zone is fully developed in seven years, 47,000 jobs will be created for the locals, and its annual sales will be $1 billion.”

The Chinese have clarified their aim of turning Gwadar into a key commercial hub in what is known as the “great economic funnel”. The area is widely popular as a critical force that drives the trade and strategic relations between the Arab countries. The Gwadar Free Zone will also provide a significant platform to the Pakistani government to build diplomatic and military ties with the neighbouring countries without much toil.

The Gwadar Free Zone is also held to be the most significant factor that would shape the Pak-China relations in the future. For the past many decades, both the countries have helped each other develop sustainability and carried out military operations in amalgamation too. The recent statements from the Chinese president, Xi Jinping, where he mentioned the bond to be unbreakable and thanked Pakistan, clearly showing the good health of the relationship between the two countries.

“No matter how the international and regional situation changes, the friendship between China and Pakistan has always been unbreakable and rock-solid, and China-Pakistan cooperation has always maintained strong vitality,” said the President at a meeting with Prime Minister Khan at the Diaoyutai State Guesthouse.

The past governments in Pakistan have ignored the development and socio-economic conditions of the Balochistan area. The Gwadar Free Zone will bring the necessary economic improvement in the whole region, assisting Pakistan strengthen their economy in the long run.

CPCI Global is the premier market leader in Gwadar real estate. To contact us, please use our contact form here or call +44 (0) 333 733 3337 for UK / RoW enquiries or +1 212 365 CPIC (2742) for all US enquiries.

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