- Maritime tourism may bring in $1 to 2bn for the national exchequer a year and create jobs
The Rio+20 Conference of the United Nations on Sustainable Development was the place where the phrase “Blue Economy” first appeared in 2012. In the conference, the development and expansion of the blue economy have been hailed as the solution to all of the economic problems facing less developed coastal nations, given the abundance of resources found in the ocean. Basically, it means using marine and coastal resources for financial advantages, placing a focus on sustainable economic growth, and preservation of the environment 2030 Agenda for Sustainable Development of the United Nations directly connected the Blue Economy to sustainable economic growth via Goal 14. Blue Economy, according to the World Bank, is the “sustainable use of utilising ocean resources for increased prosperity, better living conditions, and jobs while maintaining the ocean ecosystem’s health.
Pakistan is a significant coastal state with a coastline of around 990 km, an Exclusive Economic Zone spanning 240,000 square km, and an additional 50,000 square km of continental shelf. Pakistan’s strategic location gives its ports special importance in relation to marine trade. Moreover, Pakistan’s marine potential as a major player in the Indian Ocean Region has been further enhanced by the CPEC and the building of Gwadar as a transit and cargo port.
Pakistan’s Blue Economy encompasses a broad spectrum of maritime industries unique to the nation’s geopolitical and economic conditions including fisheries, coastal tourism, maritime transportation, and other traditional maritime sectors, aquaculture and marine biotechnology, deep-sea bed mining, resource extraction, oceanic renewable energy, and maritime tourism.
The scope of marine transport in Pakistan has increased with the development and operation of Gwadar Port. Notable marine transport sectors that provide excellent investment potential in Pakistan include shipbuilding, shipbreaking/recycling, tourism, port development and coastal urbanisation, and transshipment businesses.
If we follow statistics then we realise the fact that Pakistan’s economy is growing at a rate slower than 3 per cent per year, making it a lower-middle-income country. However, according to the estimates, Pakistan has the potential for sustainable annual growth of 8 per cent. Pakistan, with a population growth rate of around 2 per cent and ranking as the world’s fifth most populated economy, may have unstable food security in the future. Pakistan’s economic problems are exacerbated by insufficient tax collections and a precarious balance of payments. Pakistan may have issues with food security due to its limited land and water resources, thus the country needs to make new decisions in light of its great sensitivity to climate change, such as investing more in the blue economy. Although diversifying the economy beyond land-based investment avenues is still challenging owing to capital scarcity, it is paradoxically still a key tool for promoting economic progress in Pakistan. As a result, Pakistan’s oceans and marine resources have a lot of potential for use, in line with global norms for equitable growth and community development.
Governance insights
After decades of neglect, the government is now paying some attention to the maritime industry. Following the announcement that 2020 will be the Year of the Blue Economy, the government changed the Merchant 2001’s Marine Policy. A number of incentives, including a decrease in gross tonnage, are offered to private investors under the revised policy tax, flag carriers’ first berthing privilege, acceptance of freight costs in US dollars and Pakistani rupees, long-term financial facility as well as other tax breaks. It is quite commendable that these incentives are being offered, and this will expand the sector.
The Ministry of Maritime Affairs is working to realise the full potential of the industry through a phased programme. Still, a number of actions need to be taken to raise the industry’s performance. The ability and competitiveness of the government bureaucracy to carry out policy implementation is another important aspect. The system is sluggish and unappealing for investment despite these appropriate regulations because of the absence of investment in training and infrastructure with drawn-out procedures. All maritime organisations in Pakistan, such as the Pakistan National Shipping Corporation, Merchant Marine Departments, and port authorities including Karachi Port Trust, Port Qasim Authority, and Gwadar Port Authority, are under the jurisdiction of the Ministry of Maritime Affairs. The Merchant Marine Policy 2001 (MMP) of the nation was modified in 2019 and will be in effect until 2030. It has been subject to decisions made by the Economic Coordination Committee and the cabinet, although it has no legal standing.
Pakistan’s Shipping and Boat Industries
The shipping industry is crucial for the global economy, with over 90 per cent of trade carried out through the sea. Pakistan’s shipping sector is governed by international law and a dedicated national shipping policy, with the Ministry of Maritime Affairs acting as the supreme authority. Pakistan National Shipping Corporation (PNSC) is the largest and only Pakistani flag shipping company, lifting only 10-11 per cent of Pakistani cargo. With 70,094 registered ships worldwide, Pakistan has the lowest fleet size compared to other regional countries. Pakistan depends on oil imports, with PNSC trading about 12.76 per cent of total seaborne trade in 2018. In 2020, PNSC earned a net profit of about Rs 2,414 million and paid Rs 332 million worth of taxes and Rs 231 million in dividends to the government, an increase of 10 per cent compared to last year.
The domestic boat industry requires urgent government support before traditional artisans and boat-makers become extinct. Traditional boat building is moving outside Pakistan due to official apathy, and the informal sector involved in boat-making employs about 3,500 skilled laborers. Cross-disciplinary approaches are needed to deal with new world challenges and tradeoffs, such as introducing incentive schemes and facilitation services for boat registration and developing efficient boat engines. The State Bank of Pakistan has allowed a long-term finance facility (LTFF) under Merchant Marine Policy 2001 to allow investors long-term borrowing at 3 per cent to acquire floating vessels, tug boats, cargo vessels, and fishing boats. Investment in aquaculture is needed to boost the fisheries sector and increase the export of seafood by up to US$2 billion annually while concurrently increasing the country’s food sector.
Blue tourism
The tourism industry is a rapidly growing sector that contributes to the economic, social, and environmental well-being of many countries. It accounts for 10.4 per cent of the global GDP and generates about $8.8 trillions. Tourism is one of the top five earning industries and a key source of foreign exchange in half of developing nations. Pakistan has immense maritime tourism potential with a long coastline of 990 kilometers, which is blessed with diversified natural, religious, and cultural tourism resources.
However, maritime tourism is undeveloped due to political instability, lack of coordination among tourism authorities, poor governance, and security concerns. The agenda for 2030 for Sustainable Development SDG target aims to implement policies to promote sustainable tourism, promoting local products, culture, and job opportunities. Pakistan must develop a vast spectrum of marine tourism activities, such as harbor cruises, recreational fishing, maritime museums, sailing yachting, beach activities, windsurfing, scuba diving, snorkeling, sea kayaking, and more. Investors should be motivated by incentives like tax reliefs, high-profit expectations, ease of documentation process, and security.
Obstacles and future directions
The Pakistani government is re-evaluating its approach to improving the marine sector, focusing on improving the lives of fishermen and providing special support. However, institutional constraints and lack of education hinder progress. The local boat industry is losing competitiveness due to dual registration for Pakistan and Iran, posing security threats. The government’s efforts are transforming the Blue Economy into reality.
Various studies suggest a plan for policymakers to increase awareness and knowledge about blue resources in Pakistan. It suggests establishing a network of researchers, industry stakeholders, and government personnel to spread knowledge.
A survey of the Mercantile Marine Department is also recommended. A survey of Pakistan’s maritime zones is also suggested for a conducive environment for investment, a review of procedural inefficiencies, consistent long-term policies, a National Blue Growth Policy, elimination of subsidies, and investment in R&D.
Pakistan’s strategic position presents both possibilities and problems for the growth of its ports and maritime trade. Because of the China-Pakistan Economic Corridor (CPEC), which is increasing economic activity, the nation can function as a feasible economic transit route between Central Asia and its surrounding nations. An important pillar of Pakistan’s economic structure, the maritime industry needs appropriate regulatory power and government action to boost GDP share, improve income, and modernise the ship fleet. Maritime tourism may bring in $1–2 billion a year and create jobs for residents in coastal communities that guarantee our future prosperity.
“In the depths of the ocean, where mysteries lie,
Blue growth emerges, reaching for the sky.
Coral reefs and marine life, vibrant and grand,
A world of wonders, created by nature’s hand.
The waves crash and dance, with a rhythm so true,
Blue growth thrives, in shades of every hue.
From turquoise waters to deep indigo seas,
Nature’s masterpiece, a sight that truly frees.
So let’s protect and cherish, this precious blue,
For future generations, to enjoy and pursue.
Let’s strive for sustainable growth, in harmony, we’ll thrive,
Preserving the beauty of blue, as long as we’re alive”
The Author is MD IRP/ Faculty Dept. of H&SS, Bahria University Karachi