The Organisation of Economic Cooperation and Development (OECD) describes the ocean as the next ‘Great Economic Frontier’ as it holds potential for wealth and economic growth, employment, and innovation.
Additionally, the value added by oceans to the global economy is estimated to be USD 1.5 trillion annually and might rise to USD 3 trillion by 2030. By exploring the potential of the blue economy, countries can create livelihoods, alleviate poverty, and enhance standards of living for communities while simultaneously safeguarding the diversity of marine ecosystems.
In addition to this, leveraging the blue economy can also foster sustainable development by supporting climate-resilient infrastructure and focusing on renewable energy, ecotourism, and a more equitable distribution of the benefits of blue economic resources.
According to the World Bank, the blue economy refers to all economic activities related to oceans, seas, coasts, and inland water systems contributing to sustainable, inclusive, and environmentally friendly economic growth.
The blue economy seeks to protect and restore the health, productivity, and resilience of oceans and marine ecosystems; maintain their biodiversity; and enable conservation and sustainable use. Realizing its worth, the Sustainable Development Goals (SDGs) connect the blue economy to sustainable development through SDGs 14 to 17.
Moreover, the blue economy is composed of multiple existing and newly emerging sectors such as offshore oil and gas, marine transport, seabed mining, ports, tourism, fisheries, aquaculture, biotechnology, tidal and wave energy, wind and thermal energy, and blue carbon.
South Asian states like India and Bangladesh are earning billions of dollars from the blue economy, but Pakistan has been able to utilize only about US$ 450 million with only a major focus on fish exports and fish products. Other aspects of the blue economy have been ignored over the years.
The actual potential of Pakistan with respect to the blue economy is more than US$ 100 billion.
Out of the 142 coastal states in the world, Pakistan is ranked 74th in terms of the coastal length with a coast-to area ratio of 1:36. Pakistan is trying to enhance its marine resources and sea trade to benefit from the sea resources.
Since 95 percent of Pakistan’s trade with other countries is carried through the sea and almost all resources and minerals are imported through maritime routes, the sea trade can be said to be the jugular vein of Pakistan’s economy. Pakistan’s maritime area of responsibility encapsulates the coastline of Pakistan and includes all the maritime regions of Pakistan.
It is evident that the economic model of the blue economy is feasible and needs some pragmatic measures to benefit from it. However, there are some challenges that can be assuaged through robust planning and execution.
To leverage the full spectrum of opportunities presented by the blue economy, Pakistan must embark on a multi-faceted strategy.
Key components of this strategy should include infrastructure development, capacity building, regulatory reforms, and international collaboration. The significance of ports can never be underestimated.
Among the three major ports—Karachi, Gwadar, and Port Qasim Authority (PQA)—Karachi Port Trust (KPT) has been playing a crucial role in maritime traffic and cargo handling at the seaport.
The cargo and container handling at Karachi Port during the end of FY24 was 51.65m tonnes, compared to 41.85m tonnes during FY23, while the import/export breakdown shows imports of about 32.85m tonnes and exports of 12.78m tonnes (as per a KPT press release).
PQA, during the first nine months of FY24, handled 34.3 million tonnes of cargo—10 more cargos than last year in 2023, according to a survey.
To sustain this growth, Pakistan should prioritize investing in expanding port infrastructure and streamlining customs processes to further enhance trade efficiency and capacity.
Moreover, Gwadar Port’s existence is pivotal for socioeconomic development, and Chinese investment in the port is a golden opportunity for Pakistan. Balochistan’s marine resources, coastal areas, and beaches have the potential to build tourism infrastructure with the help of China. We need to stimulate investment in the province’s tourism sector.
Moreover, the government must improve port infrastructure and adhere to international laws and standards. Investments in technological advancement, infrastructure, logistics, and human resources are essential to attracting FDI. Compared with its regional peers, Pakistan’s port infrastructure requires significant upgrades to match the efficiency and capacity witnessed in ports in Singapore and Dubai.
Furthermore, the economic survey elaborates on transportation by sea. The Pakistan National Shipping Corporation (PNSC) is also playing a key role.
The financial performance of PNSC for July-March FY24 shows the following statistics: revenue at Rs35m, operating profit at Rs17.5m, profit before tax at Rs16.8m.
PNSC is engaged in various operations with its 12 vessels, comprising five bulk carriers and seven oil tankers. The shipping corporation has a huge capacity to excel at its potential in container business and transportation.
Additionally, regulatory reforms aimed at creating a conducive environment for investment in the maritime sector are another critical pillar of this strategy. Streamlining bureaucratic processes, establishing clear guidelines for sustainable resource extraction, and incentivizing investments in renewable energy and tourism can catalyze the growth of the blue economy.
Moreover, Pakistan’s efforts to harness the potential of its maritime sector must be underpinned by a commitment to environmental stewardship. Implementing strict environmental regulations, promoting the sustainable use of marine resources, and engaging in global initiatives aimed at ocean conservation are imperative to ensuring the long-term viability of the Blue Economy.
Lastly, the blue economy represents a paradigm shift in how we perceive and utilize our ocean resources. For Pakistan, embracing the blue economy offers a pathway to sustainable economic growth, environmental preservation, and social inclusion.
By strategically leveraging its maritime assets, Pakistan can unlock a new frontier of economic opportunity, positioning itself as a key player in the global maritime economy.
The journey towards realizing the full potential of the blue economy is complex and requires a concerted effort from the government, private sector, and international community. However, the rewards—economic prosperity, environmental sustainability, and enhanced social well-being—are well worth the endeavor. As we charting the Pakistan’s economy potential, the blue economy stands as a beacon of hope for a sustainable and prosperous future.
Copyright Business Recorder, 2024
The writer is an economic analyst.
Email: [email protected]
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