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Potential of Blue Economy
Human beings are part of this earth which is 71% covered with water. These water bodies are crucial since 80% of world species live in oceans, and around 660 to 820 million people are directly or indirectly linked to fisheries. Today, the worldwide ocean economy is estimated at $1.5 trillion per year and around 80% of world trade by volume is carried through seas.
According to an estimate, by 2021, nearly 34% of crude oil production will be from these offshore oil fields. Hence these statistics make it significant for states to explore the potential the blue economy has. Involving a sustainable use of oceans resources for improving livelihood, providing jobs, and economic growth, the blue economy today could yield a global profit of around $24 trillion annually, though at present the world is only getting $5-500 billion from it.
Nevertheless, it is not that oceans are for the first time used as a means to economic growth. Historically, spices, slave trade, and textiles were all exported through oceans, yet the only significant change is the shift from being profit-oriented towards its use in a more sustainable manner.
Therefore, countries across the world are doing massive research and exploration of their blue economy potential considering its importance for the economy of the state. However, keeping in view Pakistan’s potential and its 990 km long coastline bifurcated in two parts, the Sindh coast (270 km) and the Makran coast (720 km), we still lag behind other countries in fully utilizing our capabilities.
Year of the Blue Economy
Nevertheless, under Imran Khan’s administration, a visible shift can be seen as far as investment in the blue economy sector is concerned and had declared the year 2020 as the “Year of the blue economy”. Huge potential awaits in the maritime sector especially after the flagship project of CPEC since investment at the Gwadar port under CPEC, which opens in the mouth of the oil-rich Persian Gulf, will provide access to Central Asia’s natural resources and add positively to the economy.
Importantly, the 240, 000 sq. km Exclusive Economic Zone (EEZ) of Pakistan is blessed with a number of important untapped resources including hydrocarbons, minerals, fishes, marine, etc. Not just this, Pakistan’s use of oceans for maritime transport and trade is yet again significant. Nearly 60% of Pakistan’s national cargo is handled by the port of Karachi and around 1700 cargo ships visit Karachi port annually. With this, Pakistan’s Bin Qasim port carries out around 40% of national cargo, and almost 1500 cargo ships visit the port annually.
Considering the coastline of Pakistan, it is ranked 74th out of 142 coastal countries. Likewise, Pakistan’s mangrove area is the 6th largest in the world with a value of around $20 million. Pakistan’s ranking in the Liner Shipping Connectivity Index (LSCI) has increased by around 34.06 points. Thus, recognizing the potential of the blue economy, Pakistan has renamed the Ministry of Ports and Shipping to the Ministry of Maritime Affairs.
Nevertheless, analyzing the sector-wise condition of Pakistan’s blue economy, there is a lot more to be done in order to fully exploit the potential. Pakistan’s National Shipping Corporation (NSC) was established back in 1963, and in the early ’70s was at its peak. However, there was a time when it had the capacity of 50 ships which has now been declined to nearly a dozen.
Moreover, at present, Pakistan’s National Shipping Corporation has a share of only 7% in the national exports and imports cargo, while the rest is carried out by foreign companies. Had it not been the case, Pakistan could have saved more than $1.5 billion dollars annually. Nevertheless, Pakistan Merchant Marine Policy (2001), which was updated in 2019, has set a new target to upgrade merchant marine fleet share of cargo from 5% to 40% by 2020 while increasing the vessel carrying capacity to one million tons.
The same is the case with the ship breaking and maintenance sector of Pakistan’s blue economy. Statistics from 2011 show that Pakistan has set a world record by demolishing around 1485 ships which are the largest worldwide. However, the sector needs funding from the government to get the most benefit since shipbreaking facilities at Gadani alone can contribute $3 billion annually, yet it is only contributing $100 million at present.
Then comes Pakistan’s seafood industry which carries a worth of more than $1 billion and contributes 1.8% to the GDP. Around 600,000 tons of fish are caught annually, yet the exports of seafood are limited to only $451 million; it could contribute around $2-2.5 billion if Pakistan comes up with a proper policy plan. Much like this, marine tourism is also significant since it adds $0.3 billion to GDP.
Nevertheless, its potential is more than $4 billion, therefore Pakistan needs to come up with an all-encompassing policy framework that can make the best use of the potential Pakistan has. There is a need for a proper resource management mechanism. Both the private and public sectors have to collaborate to fully utilize the potential of the blue economy.
Addressing the Challenges
According to reports, the total worth of Pakistan’s blue economy sector is more than $100 billion, however, at present, we are only getting an annual revenue of $450 million from the blue economy. Thus, despite being a maritime nation, Pakistan has yet to fully utilize the potential of its blue economy sector.
The decades of neglect have already hampered the development of the maritime sector which has impacted the country’s economy. Unless and until Pakistan comes up with a proper blue economy plan, there is nothing we can do as a nation. President Dr. Arif Alvi during the 9th International Maritime Conference (IMC-21) that was held in Karachi in February 2021 announced that Pakistan was transforming into a geo-economic hub and that a Blue Economy Policy of Pakistan 2020 had been launched.
Yet, keeping in view Pakistan’s economic condition, there is a need for a more coordinated, comprehensive, and all-encompassing policy plan with the collaboration of government and the private sector. Experts believe that if the maritime sector is explored then it would have the potential to create more than one million jobs in Pakistan. Thus, Pakistan is blessed with a lot of resources, yet all we need is to fully utilize the potential.
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