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“And He it is who made the sea subservient that you may eat fresh tender meat from it. You bring forth from it ornaments which you wear. And you see the ships cleaving through it. And these are for you that you might seek of His Virtue and that you may be grateful” (Surah An-Nahl (Verse 14).
The term “Blue Economy” originated in 2012 from the Rio+20 Conference of the United Nations on Sustainable Development and Growth. Given the vastness of oceanic resources, the blue economy has been touted as the panacea for all economic woes of less developed coastal countries. It basically refers to leveraging the coastal and marine resources for economic benefits, emphasizing sustainable economic growth and environmental conservation. Based on these factors, 2020 was declared as the ‘Year of Blue Economy of Pakistan’.
Blue Economy is defined as sustainable commercial growth, improving livelihood and creating jobs using ocean resources while preserving and protecting the health of oceanic ecosystem. Blue Economy Concepts embrace many industries including ports, shipping companies, Energy/Renewable Energy, Fisheries, Maritime Transportation, Tourism, Climate Change, Waste Management to name a few. Water and oceans have tremendous value for inhabitation and carry great potential for trade and economic connectivity. A Blue Economy that comprises marine or oceanic resources holds vast and untapped potential to drive economic growth in Pakistan. Investment in coastal and various categories of marine resources can help meet the food, transport, and energy needs of Pakistan.
This is important in the context of slow economic growth, financial instability, volatility of investment, and ever-rising unemployment that Pakistan has experienced in recent years. It is time that Pakistan looks to coastal and marine resources to diversify its economy beyond traditional land-based investment avenues. Pakistan has about 990 km long coastline, an Exclusive Economic Zone of 240 000 sq. km, and an additional continental shelf area of about 50,000 sq. km, making Pakistan an important coastal state. The exclusive geostrategic position of Pakistan lends its ports a unique significance concerning maritime trade. Furthermore, the construction of Gwadar as a transit and transhipment port under CPEC has further augmented Pakistan’s maritime potential as a key player in Indian Ocean Region.
Pakistan is a lower-middle-income country, with the economy growing at less than a 3% growth rate, whereas, Pakistan Institute of Development Economics suggests for Pakistan a potential of sustainable 8% growth annually. Being the 5th most populous economy globally with a population growth rate of nearly 2%, Pakistan might face precarious food security challenges in the future.
The inadequacy of tax revenues and the balance of payment situation add to the economic woes of Pakistan. The extreme vulnerability to climate change needs new forms of decision making, such as investing more into blue economy because Pakistan might face food security problems related to the limited land and water resources. It is the need of the hour to frame a comprehensive Marine Policy that must include each and every sector of the blue economy to ensure optimal use of ocean resources, rather than sticking to few ordinances and regulations. This will require all stakeholders’ input; the stakeholders having the responsibility of governance are of core importance to kick start blue economy development.
Pakistan has a unique geostrategic location that offers opportunities and challenges as well.
Geographical location, investment, and timely implemented policies are important in sea trade and ports development. For instance, the Middle Eastern countries incorporate about 3% of world GDP and handle about 20 % of seaborne trade. Further, transshipment accounts for 53%. Pakistan can serve as a viable and most effective economic transit route to land locked Central Asia and neighboring countries. China Pakistan Economic Corridor (CPEC) can spur economic activity in Pakistan and regional countries through roads and railway networks, whereas ports at the Arabian Sea will provide global connectivity.
The Marine economy is one of the main pillars of economic structure, which needs a proper regulatory authority to monitor and evaluate it. It will play a critical role in the economic growth of Pakistan. This sector is facing numerous challenges like lack of institutional capacity, poor governance, and investment. The sector needs well-thought-out actions from the government including ease of business processes. The revenue from the sea routes transport system can be improved. The government has to play an important role to enhance ships fleet and increase the share of GDP. In addition, maritime tourism can generate $1-2 billion annually through domestic/international tourism and employ coastal community people.
The shipping industry holds paramount importance in any economy in today’s globalized world as 80% of world trade is carried out through the sea. Over 90% of Pakistan’s trade by volume is through the sea. The shipping sector of Pakistan is governed by several organizations under both international law and a dedicated national shipping policy. The Ministry of Maritime affairs acts as the supreme authority to regulate most of the maritime sector of Pakistan.
Pakistan National Shipping Corporation (PNSC) is the largest and the only Pakistani flag shipping company in Pakistan lifting only 10-11 percent of Pakistani cargo. Worldwide, 70,094 ships are registered, out of which the USA operates 3000 registered ships. Pakistan possesses seven oil tankers, five bulk carriers, and a total fleet of 57 ships, which is the lowest number compared with other regional countries. India has a total fleet of 1801, Bangladesh 468, Sri Lanka 90, and Iran, despite long standing international sanctions, maintains 893 ships not just that, Pakistan does not pose a single general cargo or containership. The regional countries comparison calls out the vulnerable position of Pakistan’s fleet size. The concerned authority must look forward to acquiring oil tankers and bulk carrier ships in the first phase, as Pakistan depends on oil import.
Boating tourism, marine sports activities, beach development, and other aquatic environment are core sectors, and all other recreational activities come under marine related tourism. When we compare the share of tourism in the GDP of Pakistan with the neighboring country India, it shows that Pakistan is lagging in developing the tourism sector. However, government is more focused on land-based tourism and is neglecting the capacity of marine tourism. The availability of vast resources is a blessing and must be properly developed as it can significantly raise the standards of coastal communities used by human beings.
Pakistan must develop a vast spectrum of marine tourism activities like harbor cruises, recreational fishing, maritime museums, sailing yachting, beach activities, windsurfing, scuba diving, snorkeling, sea kayaking, and many more. Investors should be motivated with incentives like tax reliefs, high-profit expectations, ease of documentation process, and security guarantee. On the other hand, awareness and a friendly environment should be provided to local communities and visitors. The development of international tourism will pave the way to revenue generation and foreign exchange reserves.
Action plan for policymakers is based on the observation of internationally acknowledged practices. Establish a network of researchers, industry stakeholders, government personnel, and media outlets to generate and disseminate awareness and knowledge regarding the scope and potential of blue resources.
A complete survey and manpower audit of the Mercantile Marine Department (MMD) is required to identify the shortcomings, capacity, and needed up gradation to fulfill its functions. Conduct a dedicated and full-fledged survey of Pakistan’s maritime zones to ascertain the nature, type, and extent of resources to better understand Pakistan’s blue potential. Formulate an exclusive National Blue Growth Policy with clearly defined goals and realistically set targets to be achieved within a reasonable time. Greater coordination and consultations among academia, government, and other stakeholders is the key to achieving consensus in decision-making. Eliminate subsidies for bringing in competitiveness. Invest in R&D and forge partnerships with international research groups to keep pace with the current international practices.