Blue Economy

Blue Economy

The Wave of Future
for Pakistan

While addressing the inaugural session of the 9th International Maritime Conference, which was held in Karachi alongside the 45-nation naval exercise Aman 2021, President Dr Arif Alvi called for maritime stability and regional peace to let the blue economy prosper. He also told the audience that Pakistan was taking effective steps on blue economy for improved livelihoods while preserving the health of the ocean ecosystem. He expressed satisfaction that Pakistan is heading towards a sustainable blue economy by giving importance to food security related to oceans. He further said that for blue economy to thrive, the world needs to bring an end to irresponsible exploitation of oceans. His speech has garnered great attraction form the media as well as economists who opine that blue economy is Pakistan’s untapped potential. The country is blessed with over 1000 km long coastline and the Exclusive Economic Zone (EEZ) covering about 240,000 Sq. Km. In addition, extension of continental shelf (50,000 sq. km) was also approved by United Nations Commission on the Limits of the Continental Shelf (UNCLCS) in 2015.

The 21st century is the century of blue economy and ocean civilization because maritime is not just a sector but a parallel economy, and all other sectors of economy cross through it. Economic globalization and the imminent threat of food insecurity are fast pushing the land economy to the ocean industry as the latter promotes sustainable economic growth and development. In the past, this has been a neglected sector; if we compare the growth of blue economy in Pakistan with other countries in the region, especially Bangladesh and India, we find that Pakistan is lagging far behind in reaping financial benefits it offers. There has been minimal development in this sector due to lack of awareness and unavailability of required infrastructure, inattention of governments and lack of necessary huge investments.
Pakistan, owing to the geopolitical changes in the region, is fast transforming to become a geo-economic hub in the near future. With Gwadar becoming a hub of maritime trade in the region, there is a vast potential for Pakistan to cash in on the opportunities in the sector of blue economy. It becomes especially important because Pakistan is, at present, the fifth most populous country in the world, with a population of more than 212 million people.
What is blue economy?
Ever since man started economic activities, trade through water has played a key role. Today, 90 percent of the world’s trade is conducted through water, including both rivers and seas. Blue economy is a term in economics which relates to the preservation and exploration of the marine environment. The World Bank states that the blue economy is the sustainable use of ocean resources for the economic growth, betterment of livelihoods, jobs creation and the preservation of the ocean’s eco-system.
As per Pakistan’s Ministry of Maritimes Affairs, “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.”
What does it encompass?
Blue economy may encompass all economic activities related to the oceans, seas, and coasts and it may cover a broad range of interconnected sectors. The concept of a blue economy is an emerging one and it is stressed that the utilization of such resources should also be directly combined with the preservation of it through better stewardship of those “blue resources.”
In other words, such resources are deemed to be precious and no one should view them as something to be exploited for quick gains. They should rather be viewed through the periscope of environmental protection and the permanent sustenance of its biodiversity. It may be noted that 15% of the protein that is consumed by people all across the world is provided from the sea; natural gas and oil constitute 30% of the sea resources; over 50% of magnesium is extracted globally from the seas; and even life-saving medication can be obtained from valuable resources originating from the sea.
The blue economy is roughly divided into two broader industrial sectors which are based on:
A. Ocean industry
Ocean industry represents the core of ocean economy. It means production or supply of services for developing, utilizing or protecting the ocean. It also includes the major marine industries, such as
1. Oil and gas industry 2. Salt manufacturing industry
3. Chemical industry 4. Electric power industry
5. Ship building 6. Marine engineering
7. Transport 8. Sea water utilization
9. Scientific research 10. Marine bio-medicine
B. Ocean-related industry
Ocean-related industry refers to the enterprises that link the major marine industries. It produces the inputs for the ocean industry or use outputs from the production process. It uses the sea water to irrigate the specific plants cultivated on the wetlands. These industries work as customers and suppliers of the ocean industries. They give input and output in the process of production. Input and output models are also applied to quantify the ocean related industries. The sub- category of this economy is also called coastal economy.
Pakistan’s Current Status
The situation of the blue economy in Pakistan is not very encouraging. The GMP of Pakistan’s blue economy is only close to $1.5 billion and it is limited to a few sectors compared to many other sectors of the blue economy in the world. These include fisheries, shipping, ship-breaking industry, mangroves and non-existent coastal tourism. Many sectors of the blue economy were completely missing in Pakistan due to which it could not develop.
Future Prospects
Pakistan has been historically and culturally associated with its neighbours, Afghanistan, China, India and Iran, with the all-important Arabian Sea at its south. The country lies at the convergence of another three commercially important regions of the world; the ‘oil-rich’ Middle East, Central Asia and South Asia, which require access to warm waters for their global trade and Pakistan is ideally located in providing this, which makes it an essential hub for its neighbouring states and a focal point of logistics.
Balochistan is geographically located at the strategic epicentre of the South Asian, Persian and Central Asian subcontinents – at the heart of the ancient trade routes of Mesopotamia and India, making it a very important neighbour to Afghanistan and Iran, as it provides them with much needed Iand access. The Persian Gulf region supplies approximately one-third of the world’s oil production, and Balochistan can capitalize on its proximity to the international energy transport route.
Potential Sources
Balochistan is an arid desert made up of nomadic tribes and people of vibrant culture. With an area of almost 350,000 square kilometres, a population of over 12 million and abundant natural resources, such as copper, ilmenite, manganese, nickel, rutile and zirconium, it is Pakistan’s richest province. The coastal belt of Balochistan presents an immense opportunity for the sustainable development of infrastructure and industry and has potential in many areas, including eco-tourism, fisheries and wind energy, to name a few. Unfortunately, these resources have historically been under-utilised, resulting in this province being the least developed.
Mega schemes have been proposed to fully utilise the available resources to bring this region up to its potential of being the richest and most prosperous of Pakistan’s provinces. The 770-kilometre long coastal belt provides an opportunity for these projects to successfully alleviate poverty by developing infrastructure and industry.
What can Pakistan Learn from India and Bangladesh?
Pakistan must give importance to the blue economy in its national priorities.
Just as India has given it a prominent place in its economic policy and Bangladesh has made it a priority in its planning policy, so too must Pakistan work along these lines. The private sector is at the forefront of India’s ‘Sagar Mala’ project. Pakistan also needs to encourage the private sector because, without it, the potential in the sector cannot be tapped.
Like India and Bangladesh, we have to help the private sector in this area. In these two countries, cheap loans are given to the fisheries sector through microfinance, but there is no such situation in Pakistan.
Importance of Gwadar
Gwadar, is the closest warm water seaport to the landlocked Central Asian Republics, as well as Afghanistan. Gwadar’s strategic location on the shores of the Arabian Sea is crucial for China to sustain its rapidly growing economy, as it needs a transit corridor to other states for its global trade expansion. It is very fortunate that at this juncture, the world’s largest development project, the China-Pakistan Economic Corridor (CPEC) has successfully commenced between China and Pakistan. CPEC is the framework for regional connectivity that will boost economic and trade activity and improve logistics networks throughout the region. Balochistan, and specifically Gwadar (considered to be the ‘Jewel in the Crown’ of CPEC), will give a major boost to our proposed development schemes.
Hurdles in the Way of Pakistan’s Blue Economy
Since its inception, Pakistan has been unable to fully capitalize on its marine sovereignty.
Pakistan has remained sea blind owing to the following reasons:
Firstly, Pakistan did not have a comprehensive policy to cater for the marine economy until August 2020, when the incumbent government revealed its “Blue Economy Policy 2020”.
However, it still has to come up with the parallel deep sea fishing policy. Due to the absence of a clear-cut policy Pakistan’s blue economy could neither attract private investors nor flourish on its own. The sitting government’s special attention towards blue economy will prove fruitful to remove these policy level hurdles in the way of blue economy.
Secondly, blue economy’s prerequisites include vast infrastructure development, ports development and shipyards construction. Pakistan’s weak economy cannot bear this huge cost, so the oceans remained untapped. Presently, only two ports and one shipyard are functional in Pakistan. That’s the reason that Pakistan could not reap all the benefits of the maritime sector.
Thirdly, lack of proper mechanism of catching, transporting and packing of fish on international standards greatly impedes the fishery industry. Moreover, the absence of deep sea fishing policy is also a bottleneck to capitalize fully on the marine economy.
Fourthly, due to lack of research and development in the maritime sector, Pakistan’s economy did not show any positive markers in the past.
Fifthly, the lack of communication and coordination among the concerned ministries is also an impediment in the way of Pakistan’s blue economy. It is said that almost 43 federal and provincial departments are related to the maritime sector. So an extensive network of communication and coordination is needed.
Lastly, Pakistan’s ports are public owned. In contrast, for a vibrant maritime sector Public-Private partnership is needed.
Prominent Sectors
1. Building and breaking of ships
Many developed countries like China, Japan and South Korea realised the economic potential of shipbuilding and began to progress through its development. Balochistan’s coastal belt provides a great opportunity for sustainable and marine-friendly ship-breaking and shipbuilding yards which can boost Pakistan’s economy. These yards would cater to the increasing demands of the shipping industry in the light of CPEC and regional trade through Balochistan. Despite Pakistan’s ideal location, it currently has only one shipbreaking yard in Gadani (the third largest ship-breaking facility in the world) compared to neighbours India (46) and Bangladesh (23). It is to be noted that approximately 6,000 families of a marginalised segment of the population are currently associated with the Gadani yard through direct and indirect employment, which serves as a source of livelihood for this community. One can imagine how much employment would be generated by having more such yards. Ship-breaking also supplies a substantial quantity of raw material to the steel manufacturing industries. It is a known fact that the impact of ship-breaking on coastal and marine deterioration is high due to the discharge of poisonous toxic substances. This underlines the importance of developing a blue economy which is environmentally sustainable and eco-friendly policies for the ship-breaking/building industry by ensuring better working conditions, environmental protection and prevention of toxic contamination of sea and sand. This will encourage joint ventures in constructing additional shipyards.
2. Fisheries and Aquaculture
Pakistan is amongst the top 30 fish producers but exports only 10% of its fish catch. Fisheries are a significant economic sector in a country’s economy and with a coastline like Balochistan’s, the opportunities are colossal if managed in a sustainable way. Therefore, fisheries and aquaculture are important aspects of the blue economy, as they will enhance fish exports by adapting modern practices, adequate HR training, encourage processing and packaging plants and add support facilities. Balochistan’s coastline is one of the most productive marine ecosystems in the world. It is home to a variety of fish fit for human consumption. Around 60 species of fish and at least 10 species of shrimp are found there.
Setting up a fish processing plant is recommended to create new income-generating opportunities for local communities. Solar desalination plants and reverse osmosis technologies are used to treat seawater and with the completion of Gwadar Port, Gwadar is set to become a metropolis, hence creating a huge demand for fresh water. This presents an excellent opportunity for private-sector investors in setting up desalination plants.
3. Culture and Tourism
Tourism is very significant to developing nations and could be one of the largest contributors to its economy. It is critically tied to the social and economic well-being of a community. Balochistan, with its cultural heritage, marble mountains, clear waters and white sand beaches provides the perfect tourism opportunities such as:
Marine: Recreational fishing, surfing, scuba diving, and marine archaeology
Mountain ranges: Hiking, trekking, cave exploration, camping, rock climbing and wildlife safaris
National parks: Family leisure activities and stargazing in Hingol National Park
4. Alternate Energy Resources
Balochistan’s contribution to alternative energy in Pakistan’s energy mix is negligible whereas it has the potential of producing over 50,000 MW of renewable energy through its resources – Coastal winds: 40,000 MW. Tidal currents: 11,000 MW.
Need of the hour is to formulate an effective national compliance mechanism and synergize the institutional efforts to tap the ‘blue’ economic potentials of Pakistan. Moreover, CPEC is a significant platform to play a pivotal role in this regard as it has already put forward plans for the activation of ocean-based activities in a bid to explore the incredible maritime avenues. Pakistan should also embark upon boosting its economy while focusing on maritime infrastructure, technology for offshore resource development, a strong fisheries and marine leisure sector (tourism), environment issues, etc. All the required financial and technological support should be geared up for building, operating and making economically profitable industries. These are compelling reasons for Pakistan to endorse and internalize the concept of a blue economy in policy, bilateral relations as well as international transactions.

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