Turkmenistan is eyeing Pakistan’s Gwadar port for trade expansion

Turkmenistan is ready sign a Memorandum of Understanding (MoU) with Pakistan on access to the port of Gwadar in the southwestern province of Balochistan. The deal marks and makes an important step for Turkmenistan first Central Asian country to seek access to the strategically located port of Gwadar.

Economic motivations underlie Pakistan and Turkmenistan’s decisions to finalize the deal. This is expected to open up several layers of opportunities for both countries. However, it faces challenges.

Gwadar Port is part of the China-Pakistan Economic Corridor (CPEC) and is under the operational control of the China Overseas Port Holding Company. Pakistan hopes that the Pakistan-Turkmenistan deal will boost business in Gwadar.

Turkmenistan, a landlocked country, has long sought access to warm water ports to expand its alternatives for access global markets. Historically, the country has relied on routes through Iran, Afghanistan, other Central Asian countries, Russia and the Caspian Sea, which is also landlocked. The initiative to join the Port of Gwadar provides Turkmenistan with an important outlet to the Arabian Sea and ultimately to some of the most important international shipping routes.

Like one of the worlds largest gas producers, Turkmenistan’s economy is mainly dependent on gas exports. The country has long sought diversified transit routes to expand its reach to markets in South Asia, Southeast Asia and even Africa.

In July this year, Turkmenistan signed a landmark agreement with Kazakhstan, Russia and Iran to… North-South Transit Corridor. Similarly, Ashgabat signed another such partnership with Georgia, Azerbaijan and Romania to establish the “Caspian Sea-Black Sea Corridor to expand its ties with Europe,

Turkmenistan is not the first Central Asian country to show interest in Pakistani ports. In 2021, Pakistan extended a offer to all Central Asian states to gain access to the port of Gwadar. At the time, Pakistan and Uzbekistan signed bilateral agreements on preferential trade transit, customs procedures and visa facilitation, while also proposing a major rail corridor through Afghanistan – an ambitious project that has yet to materialize.

Turkmenistan’s interest in the port of Gwadar is in line with its broader efforts to reduce dependence on Russian and Iranian ports transit routesespecially in light of ongoing geopolitical instability and sanctions.

If the plan is successful, Turkmenistan’s use of Gwadar port for international shipments will streamline logistics operations from Central Asia through Pakistan to international markets. But the feasibility of this ambitious plan remains uncertain.

A crucial part of the initiative is the development of multimodal transport routes, which will pass through Afghanistan. However, relations between Pakistan and Afghanistan have worsened since the Taliban came to power in Afghanistan in August 2021, mainly due to cross-border violence and Pakistan’s efforts to repatriate Afghan refugees. Tensions have further escalated over Pakistan’s construction of border fencing along the Durand Line.

Moreover, the potential of Gwadar port, which has long been seen as a global hub for both maritime and land trade, is yet to be realized., even twenty years after the completion of the port’s construction. Political instability, logistical bottlenecks and security concerns in Balochistan have hampered the port’s full operational capacity. The port currently requires significant upgrades to handle increased traffic. Currently the port only has three berthing facilities, and there are no operational liquefied natural gas (LNG) terminals, although such terminals are part of the port’s future plans. Moreover, the port is exclusively dependent on road transport.

A core plan under CPEC was to build road and rail links across Pakistan, which would connect Gwadar port to major Pakistani cities and then to China’s western Xinjiang region. Currently, the pre-CPEC Makran Coastal Road, completed in 2004, connects Gwadar to Karachi. However, the $10 billion ML-1 railroad The 2,600-kilometer stretch from Karachi to Peshawar, which is a key part of the plan to modernize Pakistan’s primary railway, has made limited progress even though it has been about nine years since the project was first conceived.

For Pakistan, the ML-1 railway and realizing Gwadar’s potential could build the port into a major transit hub for Central Asia, and bring economic benefits including increased flow of foreign exchange and employment. Given the current economic crisis in Pakistan, the rising debt burden and the ongoing negotiations with the IMF, this is a recent crisis A $7 billion loanthe financial benefits from increased transit trade and port activities through Gwadar have become more important than ever.

However, concerns remain over connectivity infrastructure and the ongoing security situation in Balochistan, which has been plagued by insurgency and violence. It could make Turkmenistan known for its prudent foreign policy, think twice. Turkmenistan may hesitate to fully invest in the project until it sees signs of improvement in Pakistan-Afghanistan relations, regional security, port capacity and transport infrastructure.

While Turkmenistan’s potential partnership with Pakistan to access the Gwadar port offers a win-win deal for both countries, the path to realizing these benefits is fraught with challenges. Without serious efforts to address the complex security situation, tense diplomatic relations in the region and underdeveloped infrastructure, the feasibility of this project will remain in doubt.