The ravages of the Second World War weakened the colonial powers, both militarily and economically. Even those who emerged as victors found it difficult to retain their colonies and had to give them independence.
Consequently, India became independent. The birth of Pakistan was the result of a considered opinion of the Muslims of the sub-continent that they were a separate nation. It is remarkable that in spite of the carnage and sufferings people who had lost everything, left their birthplace and migrated to Pakistan and started their new life with a firm faith in the future.
Pakistan awoke at the dawn of independence to find that it has an organised army and an experienced bureaucracy well trained by the erstwhile masters. The political leadership unfortunately passed away soon after independence. The colonial power trained the bureaucracy and army in accordance with their own requirements. As an independent state the people in power with the background of colonial training and a colonial motto "Divide and Rule" is considered extremely dangerous. In succeeding years, the people of Pakistan largely remained under military rule, even political governments relied heavily on the trained Army and the bureaucracy.
In 1947, the people in the power corridors of the Government of Pakistan were confronted with the problem of managing its merchant marine-commercial shipping, since Pakistan had not reasonable numbers of Masters, Mates and Engineers even to run its own merchant fleet. The Naval Officers had to be appointed in key positions in the shore based merchant marine establishments since they were the only available officers linked with the marine fields, even senior bureaucrats had to share the responsibility.
The English, Scottish, Indian, German, Egyptians, Dutch, and Turkish senior merchant Navy officers have served on board our merchant fleet until 1975 when a Pakistani Chief Engineer relieved the last Dutch Chief Engineer.
After the Second World War/Independence Pakistan is the first country among all in the neighbouring countries viz. Sri Lanka, Singapore, Malaysia, Iran, the Gulf States, Algeria, Tunisia. Bangladesh has managed to produce its own merchant marine senior officers to serve on board its merchant fleet and relieve the expatriates from its own merchant fleet.
Not only this, but Pakistani merchant navy officers even today are serving on the fleets of the world and earn over US dollars fifty million each year. A number of officers are instrumental towards building training institutions and maritime establishments of other countries as well.
WHY IN PAKISTAN SHIPPING IS IN DOLDRUMS: Brief mentions of the significant factors that are considered for the present deteriorated state of affairs in the merchant marine are given hereunder:
PSEUDO PROFESSIONALS ARE AT THE HELM OF AFFAIRS: Ports and Shipping is a very highly technical and sophisticated subject. The changes and development of ship design, cargo handling techniques, advancement of technology, use of electronic systems, modern communications techniques, all warrant that the affairs of merchant marine should be entrusted to professionally qualified technocrats of merchant marine who are fully abreast with commercial shipping and unless such a policy is implemented it is well nigh impossible to have any development and progress in the merchant marine sector.
UNREALISTIC AND DAMAGING APPROACH: When power is wielded by the Armed Forces of a country it is ultimately exercised by people who are least suited for the jobs entrusted to them, both by virtue of qualifications, experience and temperament, too. Likewise in a democratic system the politically motivated persons are entrusted jobs and exercise power to the will of politically elected persons in the power corridors.
The criteria in both these cases is "obedience" to those in the power corridors and blowing of trumpets proclaiming that all is "fine," no matter the national economy is ruined, corruption reaches its nadir and the people each day become poorer, jobless and are constrained to resort to corrupt practices and become part of a corrupt society, finding no other way out to exist. The social fabric is damaged and even law and order situation arises, mobs gather, burn national assets, kill people, revolt and raise slogans for a "revolution".
In both the above mentioned cases it is imperative to adopt a policy to induct suitably educated, qualified, experienced and those conversant in the fields and disciplines where they are given authoritative positions, including an honest system of accountability and progress.
Such officers should be courageous enough to argue and not to implement the wrong decisions and suggest means to improve upon the system falling under their purview. In not a dissimilar way those in the power corridors should refrain from their present attitude of terming the positive attitude of objection for betterment as "disobedience".
It is imperative to change our present approach especially in the merchant marine to obtain the desired results of having a strong, profitable and prosperous merchant marine.
SHIPPING - ITS SIGNIFICANCE: Brief history of Pakistan's merchant fleet international shipping - a carrier of world trade The International Shipping Industry is responsible for the carriage of 90% of world trade and is the life blood of the global economy.
Without shipping, intercontinental trade, the bulk transport of raw materials, and import/export of affordable food and manufactured goods simply could not be possible- half the world would starve and the other half world freeze.
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Growth 20,000 20,500 20,700 22,500 24,000 25,000 27,000 28,000 29000 30,000 33,000 34,500 35,000
in world Approx Approx Approx Approx Approx Approx Approx Approx Approx Approx Approx Approx Approx
seaborne -
Trade -
(Billion -
Tonne -
Mile) -
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Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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It is thus clear that there is a growing tendency in the shipping trade. Ships are technically sophisticated, high value assets (larger hi-tech vessels can cost over US $150 million to build) and the operation of merchant ships generates an annual estimated income of over US $.380 billion in freight rates, representing about 5% of total global economy only through seaborne trade, whereas transportation through road, rail and air sectors is largely dependant on the quantum of cargoes carried through sea lanes; represents about 35% of total global economy, that is to say that shipping has an impact of some 40% of total of global economy, both directly and indirectly and all related economies are directly attributable to shipping and provides employment to almost 32% of world population.
It is the availability, low cost and efficiency of maritime transport that has made possible the larger shift towards industrial production in Asia, which has largely been responsible for recent improvements in global living standards. World trade continuous to grow, and the international shipping industry has responded to demand for its services.
Recently, the industry has enjoyed what has become the longest sustained period of buoyant markets within living memory. Shipping markets are cyclical and notoriously volatile, and today's unprecedented markets are unlikely to continue forever. But virtually all sectors of the industry have benefited from the recent global shipping boom.
Shipping is directly linked with ports and its activities, marine insurance and the recent United Nations Conventions on the Law of the Sea has further opened avenues for research, procurement of costly minerals from the bottom of the sea, oil exploration and survey of the sea and its bed in the exclusive Economic Zone of the countries. All these form the disciplines of merchant marine. Shipping is an International Industry which depends upon a Global Regulatory framework to operate efficiently.
Unless member states have their own national framework to operate efficiently; achievement standards of a global regulatory frame work to operate efficiently is considered to be a "Mad man's Dream".
IMO is the regulatory body; one must give a serious thought as to how many IMO Conventions have been ratified in Pakistan Maritime sector, even after some 60 years of Independence. This depicts a vivid picture of the inefficiency of the stewards to the Government in the maritime sector.
It is not out of place to mention that the world tonnage (100 GT or more) comprises over 600 million gross tonnage with over 90,000 ships: unfortunately Pakistan has a total of 330127 GRT with 14 ships (Average age 27 years, which forms approximately 0.055% of world tonnage).
It is universally accepted that merchant marine (shipping) is an index of prosperity of a nation whose geographical parameters include navigable waters. The political/and or socio-economic situation is well reflected in the strength of its merchant marine fleet.
A graphical representation of the strength of Pakistan's merchant fleet sadly depicts a vivid picture of the political/and or socio economic situation in Pakistan and is an eye opener for every patriotic citizen of Pakistan.
After the inception of Pakistan, the business of shipping was managed by private ship owners, who have built the national fleet from scratch. In 1963, National Shipping Corporation was formed by the Government of Pakistan.
In 1970 the fleet strength of Pakistan's merchant fleet comprised 71 large ocean going ships (owned by 9 private shipping companies and the National Shipping Corporation). The emergence of Bangladesh was instrumental towards reducing the fleet strength of Pakistan to 57 ships. In 1971 some ships were sunk while the others were captured or scrapped.
In 1974 shipping was nationalised. The then 9 private shipping companies having 26 ships merged to form Pakistan Shipping Corporation. The National Shipping Corporation had 25 ships at the time of nationalisation. In 1979, the two Corporations (PSC and NSC) were merged to form Pakistan National Shipping Corporation.
During the fifth Five-Year Plan, PNSC procured 14 ships instead of planned decision of acquisition of 19 ships causing a loss of five ships in the bureaucratic/navalocractic procedures. These ships are considered most unsuitable in all aspects.
Later, National Tanker Company was formed and procured one tanker that too was scrapped. Later National Tanker Company was merged with PNSC. PNSC further procured three feeder container ships which have also been sold out. PNSC has acquired three old single hulled tankers. Out of which one tanker is also scrapped. Presently PNSC has one 14 ships (Average age aprox 27 years) destined to be scrapped in a couple of years.
The nationalised shipping corporation under the stewardship of pseudo-professionals mainly from Navy, Police and Army have lost some 65 large ocean going ships (auctioned including two ships lost due to sinking) and have caused colossal losses due to corruption, misappropriation, maladministration, inefficiency, embezzlement of huge funds.
PNSC hardly carries less than 5% (average for the past over two decades) of the total quantum of Pakistan's seaborne trade and the balance of trade is catered by foreign flag ships costing some 3 billion US$ each year. The reduction in fleet strength has caused great unemployment in the ranks of merchant marine.
We have lodged several complaints with the Ombudsman, Federal Anti-Corruption Committee, Chief Ehtasab Commissioner, FIA, Military Intelligence, NAB and other relevant authorities.
The Director Economic Crime Wing, FIA has informed the Government that enquiry number 49/96 in this regard cannot be finalised due to non co-operative attitude of PNSC. Consequently, the President of Pakistan framed a Directorate General of Vigilance that has also submitted hundreds of reports of corruption mal-practices and misappropriations along with documentary evidences in the organisations of merchant marine with our assistance.
The President is reluctant to take corrective steps and does not wish to take any action against those who have damaged the cause of shipping, Pakistan and its people. We strongly recommend to the President of Pakistan to take action in the light of the report submitted by Director General Vigilance Cell in the national interest.
REGISTER OF SHIPS:
There are three main types of ships registration system.
1. National Registry (National Flag) : A National Flag vessel is one beneficially owned or effectively controlled in the same country as its flag.
2. Flags of convenience: Where company that pockets profits from trading a ship lives outside the flag country; the ship is a Flag of Convenience.
-- Where a majority of ships on a register are owned outside the flag country.
-- Political expediency.
-- Tax evasion
-- Financing new tonnage.
-- Escape Unions, High Wages and working conditions.
-- Escape High Social Security Obligations.
-- Nationality shopping for compliant crew.
-- Less strict safety and environmental requirements.
3. Second Registers:
-- FOC character and designed for national owners.
-- DIS, RIF, NIS, Canary Islands, Madeira, Isle of Man, Italian, Turkish and Russian second register.
-- Though second register may be opposed by the ITF yet it is acceptable due to:
a) Economy Benefits Tax relief.
-- Social Security Benefits retained.
-- Safety and environmental standards maintained.
-- Trade Union and negotiating rights retained.
-- No Discrimination.
-- Presently there are 32 Countries which offer flags of convenience.
-- A little over 62% of world tonnage is flying FOC flags. Some 24% of world fleet is under Second Register of Shipping.
-- It is established that the nationals of the world do not prefer to invest large investment in shipping under their own national flags. A number of ships owned by Pakistani owners are under FOC register and our own nationals are reluctant to bring their ships under Pakistani Flag.
-- We suggest that the Government of Pakistan may consider to set up a special branch/section of banks under Maritime Financing System inline with Mercantile Banking for providing finances on soft terms for investment in shipping to Pakistani nationals.
(To be concluded)
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