By Tariq AlShammari
An economically powerful Gwadar is threatening the strategic influence of Dubai in the region by the expansion of Gwadar port. This has caused a silent economic war in the Gulf of Oman between two groups of countries: Pakistan, China, and Qatar on one side and India with the UAE on the other side.
Dubai, located on the southeast coast of the Persian Gulf, is the largest and most populous city in the United Arab Emirates (UAE). Dubai has invested in infrastructure to overcome its poor natural resources and become a global business, trade and tourism hub. Thus, Dubai has emerged as a multicultural city and sees millions of leisure and business visitors each year from around the world.
The major revenue of Dubai comes from tourism, aviation, real estate, and financial services. Large construction projects, iconic skyscrapers and sports events are other means of income for Dubai.
The location of Dubai offers a distinct geographical advantage to businesses. There are two major commercial ports in Dubai—Port Rashid and Port Jebel Ali. The latter one is the biggest man-made harbour in the world and the biggest Middle Eastern port; it is home to over 5,000 companies from 120 countries around the world.
Competition in the game
However, Gwadar port is a serious rival to Dubai. Gwadar port is considered a strategic location which gives China and Central Asia access to the Gulf region and the Middle East. Gwadar port will likely become the main sea gate for Central Asia. It will also become easier to send products from Xinjiang and Central Asian countries to other regions. “The corridor will help reduce transport time for goods from Gwadar port to western China and central Asian regions by about 60 or 70 per cent,” Vice Premier of China Ms Liu Yandong said.
On 10 April 2016, The Washington Post reported Zhang Baozhong, chairman of China Overseas Port Holding Company, saying that his company could spend a total of $4.5 billion on roads, power, hotels and other infrastructure for the industrial zone of Gwadar. He also added that the company plans to build an international airport and power plant for Gwadar.
‘Dubai Investment Forum’, a platform aiming to persuade local and international investors, will be held in October under the patronage of Crown Prince of Dubai Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. Undoubtedly, this forum is crucial for the future of Dubai to continue its development against a strong rival.
India is another key player in this regional battle. The Chabahar-Gwadar adversary is due to the fact that the ports are at a distance of about 72 km from each other. Both India and Pakistan have been attempting to undermine each other in the region—the development of the two ports is bound to add to the animosity.
Recent agreements signed between the US and India validate the fact that a rising China is a threat to the regional balance of power. The US is also concerned about the rise of Chinese economic power in the region. Dr. Ahmed Albanna, the UAE Ambassador to India, declared that China’s investment for expanding Gwadar port in Pakistan will have a negative impact on the UAE’s interests.
Qatar officials understand the importance of Gwadar as a great game-changer in the region. They planned to invest 15% of the ‘China–Pakistan Economic Corridor’ (CPEC), a collection of infrastructure projects that are currently under construction throughout Pakistan, to put pressure on Dubai and the UAE with the increasing animosity between the two countries.
The geoeconomic and geopolitical situation in South Asia is changing swiftly. This can be credited to the fact that the emerging powers in the region are redefining their presence. China, Pakistan and Qatar are formulating the economic agenda of the region based on the geoeconomics of Gwadar port while India and the UAE are strongly against this prospect and attempt to thwart their plan by persuading the USA and European countries to invest in Dubai.
Saudi Arabia and Kuwait have natural oil resources and Qatar has natural gas resources, but the UAE is mostly dependent on its tourism and transportation revenues. Thus, with the large investments by Saudi Arabia for attracting tourism and the silent economic war in the Gulf of Oman, the UAE may be the big loser of the great game with no tourism and transportation privileges in the next ten years.
Featured Image Source: Visual Hunt
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