Site icon Pakistan & Gulf Economist

For the love of blue gold: an alternative to traditional economy

For the love of blue gold: an alternative to traditional economy

Nationwide campaign of Bahria University to promote Blue Economy of Pakistan

Whenever we think of water the thing which comes in our mind is life representing its importance and enforces me to call all oceanic activities as Blue Gold. Oceans are of great significance for the survival and advancement of societies as they sustain life, connect the world and facilitate development. “The blue planet that humans inhabit is not divided into islands by the oceans, but is connected by the oceans to form a community with a shared future, where people of all countries share weal and woe”. Hence peace and tranquility of the oceans is crucial for the security and interests of countries around the world, and this requires joint efforts to maintain and to address common threats and challenges via better consultation and should cherish their oceans as much as we cherish their lives through the formulation and implementation of the maritime governance mechanism and related rules within the United Nations framework and has implemented the goal of sustainable marine development including great importance to enhancing pollution prevention and safeguarding the oceans, protecting marine biodiversity, properly utilizing marine resources and bequeathing clear skies and blue seas to future generations by maintaining security in international waterways that builds a community with a shared future for mankind which requires development of maritime community.

“The oceans’ role in national security and development has been on the rise in recent years. As a result, nations around the world will need a new framework or rallying point to reach consensus and handle these issues through peaceful dialogue and cooperation. Maritime security and peace in Asia is often viewed through a traditional security lens, where the main responsibility falls on maritime law enforcement agencies to protect maritime borders and territorial sovereignty. However, such a narrow perspective can fail to effectively counter maritime security threats and overburden enforcement agencies. A more holistic understanding of maritime drivers and actors is necessary to expand the scope beyond traditional security concerns and engage all maritime stakeholders in protecting the region’s maritime commons.

The COVID-19 pandemic has drastically altered the maritime landscape by highlighting its Importance not only in Asia but across the world because maritime trade plays a pivotal role as it supports, transforms and connects societies worldwide. Scope and scale of maritime trade, which accounts for around 80% of global trade by volume and 70% by value, is testimony to the same and the prosperity of many countries is closely related to the seaborne trade. The dependence on the free passage of goods through oceans holds the key for trade oriented economic structure. For Pakistan, maritime trade is the back bone of our economy as over 95 percent of our international trade is transported through seas. With the renewed impetus on maritime sector through CPEC and Gwadar Port, the maritime trade of Pakistan will increase manifold as the corridor is destined to provide regional connectivity.

China Pakistan Economic Corridor (CPEC) provides a great platform for China and Pakistan to promote regional trade activity. The massive infrastructure project to improve maritime and road connectivity is viewed as being a “game-changer” for Pakistan’s economy. However, the CPEC project at its core is envisaged as the link between China’s ambitious “One Belt and One Road” project and the “Maritime Silk Route”.

As per official statistics, Pakistan is confronting with the estimated loss of Rs.2.5 trillion due to COVID-19 and for recovery Pakistan is mainly relying on IFDIs and other friendly support; however, the reliance on agriculture, industry and services sectors are still intact so, new dimension needed to be explored to direct the economy where Blue Economy is the parallel option along with the traditional economy as most of the trade are attached with the sea in terms of transportation and global supply chains and we also have the myriads of opportunities to explore in the coastal areas and maritime sector in the fields of shipbreaking, shipping, ports, seafaring, fishing, aquaculture, coastal tourism, minerals and offshore basins. Pakistan is already on the path of blue development as a signatory of Sustainable Development Goals (SDGs), as its Goal No. 14 calls for the steps for the conservation and sustainable use of ocean resources. Pakistan has fully acknowledged this goal and has included it in Pakistan’s Vision 2025. This Vision 2025 recognizes the need for sufficient and cost-effective resource building for sustainable growth.

The Prime Minister of Pakistan has declared 2020 as the year of the ‘Blue Economy’. Additionally, the Federal Minister of Maritime Affairs, Ali Zaidi, has also stressed the ‘Blue Economy’ in his address to the National Assembly. He also mentioned that the new shipping policy would pave the way forward for the Blue Economy. These initiatives by the federal governments are commendable. However, there is a need for promising initiatives on urgent basis apart from white papers.

The neighboring countries of Pakistan, India along with Bangladesh, are earning a handsome revenue from initiatives in the Blue Economy. According to the World Bank, Bangladesh has earned $6 billion revenue from the maritime sector in 2019. The country is earning substantial revenue in the fisheries, ship-breaking, tourism, energy, minerals and ship-making sectors. The state-owned Shipping Corporation has experienced a 1000 percent increase in profit over the last five years. The shipbreaking industry is dismantling around 45 percent of the world’s ships. Similarly, the maritime revenue of India is $7 billion and it is focusing more on the ‘Blue Economy’ through projects like ‘Sagar Malla’.

It is the matter of fact that Pakistan’s maritime economy or blue economy can be used as a parallel economy. As the economic condition of Pakistan dwindles due to factors such as low growth and massive uncertainties, the export basket is limited and major profitable sectors of the economy are limited, Pakistan needs to discover its untapped resources and being the maritime nation this parallel alternative blue economy will solve the issues of foreign debt, twin deficit, poverty, unemployment, low export and inflation. Therefore, this is high time for the government and Ministry of Maritime Affairs to work on, to direct this sector towards prosperity by investigating weak areas, which is the hindrance in blue growth as we are not utilizing the potential of this sector. Pakistan was ranked at number one in the shipbreaking industry earlier but due to our weak policies India has taken over the number one spot followed by Bangladesh and Pakistan at third slot. Both the countries are ahead of Pakistan despite having favorable conditions like heavy tides, cheap labor and a long beaches. The shipbreaking industry is in a terrible condition after the fire incident took place at Gadani in 2017. Pakistan can earn billions in this sector by breaking large vessels which were used to carry crude oil. The government can facilitate public-private partnership in the shipbreaking and shipbuilding industry. Coastal tourism is also one of the big opportunity for Pakistan needed to be explored. Globally tourism industry accounts for more than 10 percent of the GDP. Coastal areas of Pakistan have a variety of landforms such as sand beaches in Baluchistan, rock cliffs, headlands, bays, lagoons, deltas, mud volcanoes, estuaries, and mudflats and so on. However, Pakistan is not utilizing this natural potential and losing its potential expected income of around $4 billion.

According to the report of the World Economic Forum (WEF), Pakistan is among the least competitive countries of South Asia in tourism and is ranked at 121 out of 140 countries globally. Pakistan need to invest in coastal tourism development by building infrastructures like a resort, theme parks, islands and a food industry while water sports like boating, diving, snorkeling, sport-fishing and jet-skiing and scuba diving may add value in tourism. We also need to pay our attention to the fisheries as this sector provides jobs to almost 390,000 people of Pakistan directly and almost 400,000 people indirectly through areas like transportation and retailing and others. Additionally, coastal communities are heavily dependent on this source of economy and food. Fish is a major export of Pakistan. According to the reports of the World Fish Centre, due to the growing population, the demand for fish is expected to increase globally by 50 percent over the next 15 years. Currently, Pakistan’s fish is relatively low-priced at $2.27 to $2.5 per kg as compared to $ 7 per kg in the region, due to its poor export quality and deteriorating transportation method. The fishing industry may contribute better if we improve the export quality by providing quality fishing boats, sustainable nets and capacity building training and through the addition of value-added products in the export basket.

All blue activities are moving around the smart ports where Gwadar is the upcoming key player which may contribute economic development of Pakistan. Ports play an important role in transporting freight at the cheapest rate. Along with this, ports provide employment opportunities to a large chunk of the nation. Two other ports of Pakistan, Karachi and Port Qasim are carrying the major freight of the country. However, Gwadar has the potential to introduce more maritime potential in Pakistan. Along with the development of Gwadar Port and its adjacent areas, there is a strong need to meet the grievance of the locals. For this the Government can look into the Pakistan Navy’s Ormara model. This will have twofold benefits, one being security and the other smooth economic development.

The maritime potential of Pakistan is vast and it is aptly right to say that, the maritime economy or Blue Gold can be used as an alternate economy and as the economic condition of Pakistan dwindles due to factors such as low growth and massive uncertainties, the export basket is limited and major profitable sectors of the economy are limited, Pakistan needs to discover its untapped resources. Pakistan is a maritime nation. This Blue Gold economy will resolve the issues of foreign debt, twin deficit, poverty, unemployment, low export and inflation. Therefore, this is right time for the governments and Ministries to work on the Blue Economy through their policies for the development of Blue Economy, seaborne trade, environment, provision of food and blue job opportunities, facilitating global supply chains that ensures economic prosperity of a Maritime Nation like Pakistan.

[box type=”note” align=”” class=”” width=””]Urooj Aijaz (Faculty Dept. of MS; Bahria University Karachi/MD Innovation Summit/National Coordinator of Blue Economy by IRP)[/box]

Exit mobile version