Daily Times

Policy Outreach and Advocacy Officer at Sustainable Development Policy Institute (SDPI) Islamabad.

CPEC: Prospects for Pakistan’s Blue Economy Abstract

There is no denying the fact that future belongs to oceans. Maritime is not just a sector but a parallel economy, where all other sectors of economy cross through it. Pakistan is blessed with a vast area of oceans but it remained unexplored.  However, with the initiation of CPEC and the development of Gwadar port, the dream to capitalize on the country’s blue economy for a sustainable growth can be realized.

Introduction:

It is fact that Pakistan’s economy has been under strain since long. In order to steer it from the crisis, we need to realign the traditional economy but also open new fronts of growth and production. The China Pakistan Economic Corridor (CPEC), in this case serves not only a lifeline for Pakistan’s traditional economy but also serves as a womb for the birth of Pakistan’s blue economy. CPEC-which is not just a single road project but a multi-sectorial direct Chines investment in Pakistan, has galvanized many sectors of Pakistan’s economy. Under these lofty Chinese investments, Pakistan’s blue economy shines like gold. CPEC offers immense opportunity to explore and exploit the untapped blue economy of Pakistan. Along with the regional connectivity, an enhanced maritime partnership between China and Pakistan under CPEC can ensure a sustained economic growth for Pakistan in particular and the region in general. Being a signatory of the Sustainable development Goals (SDG-14), Pakistan has already taken the path of Blue development. However, under the umbrella of CPEC Pakistan can not only learn from China’s maritime advancement but can also transform its relationship with China on the basis of ‘Blue Partnership’. This partnership has already started with the development of the Gwadar Port, which is considered as a harbinger of the China’s Belt and Road Initiative (BRI). This is the reason that the Gwadar port city is being developed on modern lines which will be equipped with all facilities of life. Owing to Pakistan’s geography and vast maritime sovereignty, looking towards the seas for a sustained economic growth remains the only viable option for Pakistan to support its falling economy. Fortunately, being aware of the importance of the concept of Blue economy, the incumbent government of Pakistan has declared the year 2020 as the year of Blue economy, with an aim to exploit the maritime resources for the development of the country. This goal has also been included in the vision 2025 of the country.

Understanding Blue Economy:

Before dwelling on the Pakistan’s blue economy potential, it is important to understand that what does blue economy actually mean? The word ‘Blue Economy’ is a relatively new term which was first coined in 2010. Word Bank defines Blue economy as, a sustainable use of ocean resources for economic growth, improved livelihood, jobs, and ocean ecosystem health. It includes range of sectors, like marine transportation, fisheries, tourism, aqua-culture, offshore drilling, renewable energy resources, waste management, maritime research and development, ship-making and ship-breaking and Exclusive Economic Zones etc. Like the ‘Green Economy’, the concept of ‘Blue economy’ also aids to the development, progress, wellbeing and social equity of human beings. According to an estimate of Commonwealth report 2018, the total global volume of the Blue economy is $ 1.5 trillion per year. Moreover, worldwide 350 million people’s income is directly related with the fishery industry. It is said that till 2025, thirty-four per cent of the total crude oil production will come out from oceans. According to the World Bank report, 80 per cent of the total world trade occurs through oceans. Keeping in view the utmost importance of this parallel economy many countries have come up with their policy initiatives, for example; Australia’s Blue Well-being Initiative, EU’s Blue growth (2012) and India’s Sagar Malla etc. to cater for the resources of oceans. Pakistan’s neighboring countries are already earning a handsome GDP from their oceans. According to World Bank report, in the year 2019 Bangladesh earned $6 billion and India earned $7 billion from their maritime sector. The importance and future of Blue economy is also recognized from the fact that the UN Sustainable Development Goals in (SDG-14) has ensured a co-ordinated response to ensure the protection and preservation of oceans for the present and future generations. So, all these facts undoubtedly proved that oceans and sees matter a lot for a sustained economic growth and development of countries.

Pakistan’s Blue Economy Potential:

Pakistan’s economy is marred in different crisis ranging from trade deficit to debt trap.

According to a Word Band report inflation will remain high till the fiscal year 2020. In such crisis times Pakistan’s economy needs a major thrust to steer it from this quagmire. So, to stop this steep downturn in the economy, reaping on the Pakistan’s untapped maritime resources under the auspices of CPEC, remains the only viable option. Luckily, Pakistan is among those fortunate countries which have all the ingredients to adopt Blue economy.

“The future belongs to oceans because the land resources are depleting. The sooner we realize it the better it is.”  Khan Hasham Bin Sadiq, President IPRI.

i. Pakistan’s Unique Geography:

“The word Pakistan sums up the Indian Sub-continent”   Robert D Kaplan Pakistan is blessed with a profound blend of landscape, ranging from the coastal areas of the Arabian Sea in the South and to the mountains of the Karakoram Range in the North.

Geologically Pakistan overlaps the Eurasian, Iranian and Indian tectonic plates. Pakistan has a long coastal-line over 1050 Km along the Indian Ocean, which stretches along the provinces of Sindh and Baluchistan. In addition to this Pakistan’s maritime sovereignty includes Exclusive Economic Zones (EES) of 240,000 Sq. Km and 50,000 Sq. Km of Continental Shelf, which become greater than the combined area of the provinces of the Punjab and Khyber Pakhtunkhwa. This vast swathe of sea area is not only a route for international maritime trade but also rich of bio-productivity and bio-diversity.

ii. CPEC and the Construction of Gwadar Port:

“The Gwadar has a great strategic location. This sand will become gold”

Chinese Minister of Communication, 2011 Gwadar, a small coastal town in Baluchistan at the South of Pakistan, is the center stage of the $50 billion CPEC project and a part of the Chinese Belt and Road Initiative (BRI). Gwadar is a deep sea port which has a great potential in terms of trade, marine transportation, off-shore exploration, tourism, aqua resort and deep sea fisheries. According to Shahzeb Khan Kakar, Director General of Gwadar Development Authority (CDA), after the execution of the master plan of Gwadar city under CPEC, the city would become the Singapore of Pakistan with a GDP of $30 billion by 2050 with the production of 1.2 million jobs for the locals. So, the success of CPEC and the development of Gwadar will give a great impetus to Pakistan’s Blue economy. Gwadar development will pave the way for many subsidiary industries like ship-making, ship- breaking, shipyards construction, tourism and hoteling etc.

iii. Fishery and Aqua-culture :

Fishery is also one of the main export industries of the Blue economy. It plays an important role in boosting agriculture and food economy of a country. Luckily, Pakistan’s coastal areas are rich of marine life. It is home to all types of bio-productivity and bio-diversity and a breeding place for important fishes like carb and shrimps. Presently Pakistan’s fish export is between $ 250-300 million per annum. According to Fisheries division of Food and Agriculture Organization of the United Nations, fisheries sector contribute 1 percent to the country’s GDP and provides jobs for the 1 per cent of the total labor force. However, by apply correct method of fish catching and following hygiene protocols in packing, the industry has the potential to grow to $2 billion annually. Moreover, in Pakistan almost 400,000 people are directly or indirectly attached with fishery industry. In addition to this Pakistan has also lots of potential of cultivating freshwater and saltwater aquatic population under controlled condition of aqua culturing at the coastal area of Pakistan.

iv. Marine Transportation:

Pakistan’s Blue economy also offers great potential in the marine transportation sector.

Presently Pakistan has only 12 ships and one ship breaking yard at Gaddani. Pakistan’s freight bill is $5 billion per annum. The construction of a new shipyard at Gwadar and the regular shipping service by the China Ocean Shipping Company (COSCO) from Gwadar port and the development of Kati Bandar port in Sindh under CPEC will usher a new beginning for our marine transportation sector. It will also make a feasible ground for the development of other related industries like ship-making, ship-breaking, seafaring, aquaculture, minerals and offshore basins which will not only value-add to our ports and marine transportation but will also generate millions of employment opportunities.

v. Coastal and Marine Tourism:

According to Word Economic Forum (WEF) report, Pakistan is among the least competitive countries of south Asia in terms of tourism and globally ranked at 121 out of 140 countries.

Pakistan’s total coastal area 1050 km, which starts from Rann of Kutch in Sindh province till Jiwani in the Gwadar district of Baluchistan, is full of scenic spots and tourist resorts. It includes diverse range of landforms such as sand beaches, rock cliffs, headlands, bays, lagoons, deltas, islands, mud volcanoes, estuaries and mudflats etc. which are sighs of all sorts of sea and recreational activities. Moreover, Pakistan’s beaches it also need to be supplanted with water sports like boating, diving, snorkeling, jet-skiing, cruise and scuba to attract more and more tourists.

Apart from the afore-mentioned major sectors of Pakistan’s Blue economy the other related down-stream industries like sustainable use of oceanic resources, renewable energy, off- shore drilling, waste to energy (WTE) and hoteling etc. are the areas where Pakistan has immense potential. Nevertheless, it needs a compressive policy and the required infrastructure to fully capsize on it. Presently, Pakistan lacks both of them. The CPEC platform and Chines assistance in this regard can prove instrumental to jump start Pakistan’s blue economy.

Hurdles in the Way of Pakistan’s Blue Economy:

“Despite being a bona-fide maritime nation, Pakistan suffers from sea blindness”

Khan Hasham Bin Sadiq, President IPRI. Since its inception, Pakistan has been unable to fully capitalize on its marine sovereignty.

Pakistan has remained sea blind owing to the following reasons; Firstly, Pakistan did not have a comprehensive policy to cater for the marine economy until July 2020, when the incumbent government revealed its “Blue Economy Policy 2020”.

However, it still has to come up with the parallel deep sea fishing policy. Due to the absence of a clear cut policy Pakistan’s Blue economy could neither attract private investors nor flourish on its own. The sitting government’s special attention towards blue economy will prove fruitful to remove these policy level hurdles in the way of blue economy. Secondly, blue economy prerequisites include vast infrastructure development, ports development and shipyards construction. Pakistan’s weak economy cannot bear this huge cost, so the oceans remained untapped. Presently only two ports and one shipyard are functional in Pakistan. That’s the reason that Pakistan could not reap all the benefits of the maritime sector. Thirdly, lack of  proper mechanism of catching, transporting and packing of fish on international standards greatly impedes the fishery industry. Moreover, the absence of deep sea fishing policy is also a bottleneck to capitalize fully on the marine economy. Fourthly, due to lack of research and development in the maritime sector, Pakistan’s economy did not show any positive markers in the past. Fifthly, the lack of communication and coordination among the concerned ministries is also an impediment in the way of Pakistan’s blue economy. It is said that almost 43 federal and provincial departments are related to the maritime sector. So an extensive network of communication and coordination is needed. Lastly, Pakistan’s ports are public owned. In contrast, for a vibrant maritime sector Public-Private partnership is needed.

An Appraisal:

Pakistan’s maritime blindness has put greater pressure on Pakistan’s traditional economy. However, with the initiation and success of CPEC, prospects for the revival of the country’s oceanic economy are very high. It is the need of hour to leave no stone unturned to make CPEC a success and revitalize the country’s Blue economy under its umbrella. This is the only way which steer Pakistan from its economic crisis and put it on the road of sustainable growth and progress.