Blue Growth Initiatives By Pakistan: Moving Towards A Sustainable Future

The world is gradually moving towards a maritime order in response to the changes in the international environment to acquire greater economic and geopolitical ambitions. In this regard, the Blue Economy has become the epicentre of the emerging global maritime order. With the changing maritime equation, Pakistan is also expanding its footprint in sustainable economic growth and development. Previously, the government neglected the vast potential of the ocean economy; nevertheless, the recent tilt towards Sino-Pak ‘blue partnership’ under the CPEC project will act as the main driver to explore the potential of the blue economy in the country.

Interestingly, the maritime sector repeatedly gained prompt importance in the economic reforms proposed over time. After the establishment of the National Shipping Corporation in 1963, Pakistan experienced a ‘golden era’ of merchant shipping while owning 71 national and private vessels. Eventually, Port Qasim was made operational in 1980 to open up the global sea trade for raw materials to expand Pakistan Steel Mills. It has transformed into the country’s largest industrial zone stretching over 15474 acres and contributes to 51% of sea trade with a tremendous growth rate of 5%.

Likewise, Pakistan Maritime Academy was inaugurated in 1962 and supplied a substantial amount of seafarers in the international fleet. Since the beginning, Pakistan was placed on the ‘white-list’ of the International Maritime Organization (IMO) for complying with the requirements of STCW (International Convention on Standards of Training, Certification, and Watch-keeping for Seafarers). In the 1980s, Pakistan was the global hub of the shipbreaking industry and produced more than 1 million tons of scrap annually in Gadani Yard; and was ranked 3rd largest shipbreaking yard in the world. Moreover, the Trade Development Authority of Pakistan shows that Pakistan’s seafood industry is worth 1.2 billion dollars, and the annual exports are estimated to be 370 million dollars. Similarly, Pakistan’s offshore reserves include the world’s 2nd largest Indus basin and Makran, home to massive hydrocarbon and methane gas reserves.

Since the beginning, Pakistan was placed on the ‘white-list’ of the International Maritime Organization (IMO) for complying with the requirements of STCW (International Convention on Standards of Training, Certification, and Watch-keeping for Seafarers).

Pakistan’s maritime sector is currently experiencing substantial growth due to favourable policies and investments to transform Pakistan into a marine state. Pakistan’s recurrent shift towards the blue economy is seen over the years as 95% of trade is carried out through sea. GMP of Pakistan’s blue economy is estimated to be $1.5 billion, restricted to limited sectors including fishing, mangroves, shipping, shipbreaking, and ocean trade. In October 2017, Pakistan restructured the Ministry of Ports and Shipping as Ministry of Maritime Affairs to expand the research and development in Maritime Sector.

A report published by the World Bank suggests that it is a golden opportunity to launch a ‘Blue Revolution’ in the country. It will prioritize sustainable growth and management of marine resources for economic and social benefits. Balochistan has a rich potential of fish resources and contributes to 35% of the total fish catch. Indian Mackerel on its coast has found a market in South Asia, resulting in a boost in exports. Balochistan’s government has also allocated a significant budget in the maritime sector to provide fisheries with interest-free loans.

Moreover, Pakistan is home to the sixth-largest area of mangroves in the world. Mangroves are an essential resource of the blue economy and contribute to 4 billion dollars in exports. The government of Pakistan launched the ‘Ten Billion Tree Tsunami Project’ where it will plant 43.5 million mangroves to improve the economic livelihoods of fishers residing in the coastal areas and to promote sustainable economic growth. Likewise, Pakistan’s offshore reserves include the Indus basin, the 2nd largest reserve in the world. Oil companies have started joint drilling near Karachi Indus G-Block (Kekra-1). The Petroleum Division of Pakistan is overseeing drill stem tests to determine reserves of gas and oil.

The blue partnership under the CPEC project is massively contributing to the growth of the maritime sector with an increase of funds and investment of the coastal belt in the country. The development of Gwadar Port, which is the largest deep seaport in the world, has the potential to become a global economic hub in the future. A new shipyard is under construction in Gwadar, and the development of Kati Bandar port is taking place in Sindh. Pakistan declared 2020 as the ‘year of the Blue economy’ and has included blue economy in the 2025 vision goal of the state, which will pave the way for ocean industries such as ship-making, ship-breaking, tourism, and so on.

CPEC prospects are attracting foreign investment in the maritime sector of the country. Saudia Arabia has proposed the desire to construct a 10 billion dollar oil refinery port in Gwadar. The Saudi Energy Minister Khalid al-Falih says: “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China-Pakistan Economic Corridor.”

CPEC prospects are attracting foreign investment in the maritime sector of the country. Saudia Arabia has proposed the desire to construct a 10 billion dollar oil refinery port in Gwadar.

Furthermore, Pakistan’s maritime sector is yet to reach its full potential and represents a massive opportunity to grow. For starters, the government should incorporate suggestions given by the World Bank for a blue revolution including, strategic investment and proper management of the fishery sector to improve the quality of fish for economic and social benefits. Incentives and interest-free loans should be offered to fishers through microfinance to encourage the development of the fishery sector.  Moreover, an extensive policy framework should be formulated to develop a deep-sea fishing policy to expand seafood exports and stimulate the growth of aquaculture. Also, Investors should be encouraged to invest in the shipping industry, increase the capacity of shipping corporations and promote sustainable economic growth.

Similarly, favourable conditions under CPEC will attract foreign investors, and priority should be given to international companies for drilling offshore resources along the Indus basin and Makran basin. Furthermore, Pakistan should explore blue tourism under its vision of a blue economy. The coastal areas have untapped tourism potential, especially in Gwadar. The development in various sectors of the maritime domain will create millions of jobs in the state while simultaneously boosting the country’s economic growth.

Hence, Pakistan’s maritime sector has a huge potential for growth and development with invaluable hydrocarbon reserves, minerals, fish stocks, and other marine resources. The government is developing a blue strategy in line with the ‘blue revolution’ to establish the state as a maritime state. A promising opportunity lies in the form of CPEC that will diversify the state’s economy and pave the way for prosperity. Also, the geo-strategic location places Pakistan in the pivotal position to transform the maritime affairs in the Indian Ocean and emerge as a global economic hub. The oceans and seas will become essential for growth and engagement with the world.

Ashna Mehmood

The writer is a final year student of International Relations at National Defence University, Islamabad.

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