- Pakistan must look to the sea
By: Jawaria Abbasi
The worsening economic situation is unfortunately not supporting the economic health of the country. On top of that the covid-19 andemic has brought in additional challenges to the prevailing economic situation. According to the government officials, the estimated loss for Pakistan due to Covid-19 is around Rs 2.5 trillion. To support the economic challenges, Pakistan is mainly relying on IFDIs and other friendly support; however, the reliance on agriculture, industry and services sectors are still intact. Exploration of the new alternatives are limited to tackle the economic challenges. The Blue Economy is one of the options to be explored.
Pakistan has a long coastline of approximately 1050 km. It is divided between the provinces of Sindh and Baluchistan. This divides the maritime area of Pakistan into exclusive economic zones (EEZ) and the buffer zones. Recently the United Nations Conference on the Law of the Sea (UNCLOS) has acknowledged Pakistan’s claim on 350 Nautical miles of Sea and resultantly Pakistan’s offshore area has been extended up to 50,000 sq km. After this, the EEZ has become the second-largest province of Pakistan. There are myriads of opportunities to explore in the coastal areas and maritime sector.
“Blue Economy” or Ocean economy has many sectors such as 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 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 data from 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 exerienced 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”.
The maritime potential of Pakistan is vast and it is aptly right to say that, the 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. Pakistan is a maritime nation. This parallel 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 the Blue Economy
Pakistan, in spite of having huge potential for growth and investment in the maritime sector or the “Blue Economy”, is only able to generate only 0.4 percent of its GDP through maritime sectors. The potential sectors of the maritime economy which have been mentioned earlier (Shipbreaking, shipping, ports, seafaring, fishing, aquaculture, coastal tourism, minerals and offshore basins) are many, but Pakistan is earning from only a few, like, fishing, shipbreaking, ports and shipping. Pakistan is not even fully utilizing the potential of these sectors. Pakistan was ranked at number one in the shipbreaking industry earlier. However, now India has taken over the Number One spot, is followed by Bangladesh and only then comes Pakistan. Both the countries are ahead of Pakistan despite having favorable conditions like heavy tides, cheap labour and a long beach. 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.
Secondly, Pakistan has beautiful and untapped beaches along with its coastlines. 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 needs to invest in coastal tourism development by building infrastructures like a resort, theme parks, islands and a food industry. Additionally, water sport like boating, diving, snorkelling, sport-fishing, jet-skiing and scuba diving should be started. Pakistan also needs to create a cruise industry for attracting more tourists in the areas of Karachi and Gwadar.
Thirdly, Pakistan needs to improve its fishing industry and invest more on aquaculture. Fisheries play an important role in the agriculture and food economy of the country. This sector provides jobs to almost 390,000 people of Pakistan directly and almost 400,000 people indirectly through such areas as transportation and retailing. 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 can improve the export quality by providing quality fishing boats, sustainable nets and capacity building training. Additionally, illegal fishing should be banned by legislation. Thus the addition of value-added products in the export basket will bring more revenue to the country.
Fourthly, the role of the ports, and especially of Gwadar, is very crucial for the 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 area, there is a 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 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. Pakistan is a maritime nation. This parallel 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 the Blue Economy.