Monday, April 14, 2014

Desert ports (Singapore dreams)

Duqm, Chabahar, Gwadar....all are desert ports of tremendous significance (maybe).

Duqm, Oman may be the American firing post in response to the Chinese held Gwadar.
The advantage for the Americans is that Oman is stable while Baluchistan is not (even if a People's Liberation Army base comes up in Gwadar).  

India under Modi-raj will probably be friendly with Oman as well as Iran. The proposed access point to Afghanistan and Central Asia will be via the Chabahar port, right next to Gwadar).  

There is also a plan for a deep-sea pipeline between Iran and India. USA may not object to Indo-Iran links since there is a strong lobby which wants normalization between Tehran and Washington.

On Friday, India opened formal talks on a deep-sea gas pipeline with both Iran and Oman. Indian Foreign Minister Salman Khrushid met Omani Foreign Minister Yousif bin Alawai bin Abdullah and Iranian Foreign Minister Javad Zarif. The project, which is being discussed for the first time at this high of a level, is expected to cost around $5 billion. The deep sea pipeline would be an alternative for India to the proposed Iran-Pakistan-India gas pipeline which ran into several complications after Pakistan failed to meet its obligations in a timely manner.
Afghan foreign ministry officials announced that a memorandum of understanding for the road transit of goods will be signed among Iran, India and Afghanistan in May (2014). "The draft of this MoU has been finalized and it will be signed by Afghanistan, Iran and India within a month," Afghan Foreign Ministry Spokesman Shakib Mostaghni said in his weekly press conference on Saturday. 

Iran’s Chabahar Port, located 72 kilometers (44 miles) West of Pakistan’s Gwadar port, holds immense strategic and economic significance for India.

The Indian diplomat said the capital investment initially envisaged for the construction of a container terminal in Chabahar stands at $147mln. India's interest in the Iranian port is not only to get a direct access to Central Asia but also to facilitate import of minerals from Afghanistan, Khurshid said in the Afghan city of Kandahar.
High-ranking U.S. defense officials, military and civilian, have been visiting Oman and particularly Duqm of late. A few years ago, Duqm was just a blank spot on the map, facing the sea on a vast and empty coastline with its back to the desert. Now, $2 billion has been invested to build miles and miles of quays, dry docks, roads, an airfield and hotels. By the time Duqm evolves into a full-fledged city-state, $60 billion will have been spent, officials told me during a visit I made there -- a visit sponsored by the government of Oman.

Duqm is a completely artificial development that aims to be not a media, cultural or entertainment center like Doha or Dubai, but a sterile and artificially engineered logistical supply chain city of the 21st century, whose basis of existence will be purely geographical and geopolitical. Duqm has little history behind it; it will be all about trade and business. If you look at the map, Duqm lies safely outside the increasingly vulnerable and conflict-prone Persian Gulf, but close enough to take advantage of the Gulf's energy logistics trail. It is also midway across the Arabian Sea, between the growing middle classes of India and East Africa.

To spur development, Duqm will have a new legal framework and will feature 100 percent foreign ownership of local businesses. Foreign companies that invest here will enjoy tax-free status and the ability to operate without currency restrictions, I was told.

Duqm's biggest advantage for the Americans is that Oman has been for decades among the most stable, well governed and least oppressive states in the Greater Middle East -- whereas the problem the Chinese have in Gwadar is that Pakistan is among the least stable and worst governed states in the Greater Middle East. Strategic geography for a port requires not just an advantageous location vis-a-vis the sea, but vis-a-vis land, too. And it is road, rail and pipeline connections from Omani ports outside the Persian Gulf -- Salalah and Sohar, as well as Duqm -- to ports inside the Gulf, from Dubai to Kuwait, that potentially make this place so attractive.

If Duqm succeeds -- still a big "if" -- it will become a great place name of the 21st century, just as Aden was in the 19th and Singapore was in the 20th. Given continued demographic growth and the theoretical prospect for economic dynamism in India and East Africa -- even as Europe hovers around zero population growth with stagnant, over-regulated economies -- the Indian Ocean, as I have been writing for years, could become the geopolitical nerve center of postmodern times. Duqm constitutes a multibillion-dollar bet that I am right.

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