The Myth of Central Asia’s Trade Potential

by: TN Media News: Central Asia’s trade potential, especially in connection with Pakistan, has been widely discussed. This analysis examines the infrastructure and realistic opportunities, focusing on Gwadar Port (GP) and Chabahar Port (CPP).

Gwadar Port, set to handle up to 400 million metric tons of cargo annually by 2045, features a natural deepwater harbor. It can accommodate the largest vessels, including 200,000 DWT supertankers. Supported by China-Pakistan Economic Corridor (CPEC) developments, including a new international airport, Gwadar’s infrastructure is rapidly advancing.

In contrast, Iran’s Chabahar Port faces limitations such as shallow depth, narrow access, and costly dredging requirements. Though important for Iran and India’s trade with Afghanistan and Central Asia, its operational costs reduce competitiveness compared to Gwadar.

Pakistan’s current trade with Central Asian Republics (CARs) remains modest at $400–$500 million annually. Countries like Uzbekistan and Kazakhstan contribute small but growing shares. With improved infrastructure, transport, and trade regulations, this could increase to over $5 billion in the future. However, border issues, security concerns, and complex regulations continue to limit growth.

Central Asia’s regional trade totaled $10 billion in 2022, led by Kazakhstan, yet it lags behind Pakistan’s trade with China ($17.8 billion) and the US ($6.1 billion). The region’s smaller population, limited industrial base, and reliance on Russia and Turkey constrain its market size.

Energy projects such as the TAPI gas pipeline and CASA-1000 electricity transmission show promise but face geopolitical and economic hurdles. Pakistan’s current energy capacity exceeds demand, with solar power expansion expected by 2030, offering alternatives to Central Asian energy imports.

While stronger ties with Central Asia are beneficial, expectations should be realistic. Geopolitical motives, such as India’s focus on Chabahar and China’s on Gwadar, often outweigh economic factors. Ultimately, Pakistan must prioritize its infrastructure and energy development to maximize its role as a regional trade hub.