Daily Times

The ‘Blue Economy’ is considered the 7^th largest global economy since the world’s oceans provide food to more than 3 billion people, sustains millions of jobs and generates approximatelyUS$2.5 trillion annually through the vast amount of ocean related economic activity. Approximately 90% of the global trade by volume is carried out by sea. UNEP and other international organizations extract the concept of Blue Economy from Green Economy where the principles of blue financing are integrated within the broader concept of environmentally sustainable green financing. It is focused on tackling climate change through low-carbon and resource-efficient shipping, fishing, marine tourism, and marine renewable energy industries. Pakistan is also blessed with a diverse and highly productive blue economic potential. The maritime revenue projection of Pakistan is approx. US$ 183 million. Pakistan’s coastal areas are home to large amount of commercially important fisheries including carbs and shrimps with a potential resource worth of more than US$ 2 billion annually.

Globally, the water habitats have been severely polluted due to plastic and toxic industrial wastes, fertilizer run-off from nearby agricultural activities, domestic sewage, potentially hazardous hospital wastes, solid wastes, and unsustainable tourism. Pakistan is also facing several threats to its marine habitat due to overfishing, water pollution from industries such as ship breaking industry, poor waste management systems, and insufficient water conservation measures. The continuous degradation of the country’s Blue Economy is also creating obstacles in the attainment of the UN’s Sustainable Development Goals (UN-SDG) 2030. The achievement of UN-SDG # 1 (End Poverty), UN-SDG # 8 (Decent Work), UN-SDG # 13 (Climate Action), and UN-SDG # 14 (Life below Water) is connected with the sustainable management and protection of marine and coastal ecosystems from pollution, as well as addressing the impacts of ocean acidification.

The Government of Pakistan need to develop the country’s Blue Economy as a sustainable marine economic development model. The sustenance of the Blue Economy is essential for humanity as a whole, and to counterbalance the effects of climate change.

All around the world, stakeholders have started to realize the importance of the Blue Economy and are working towards the development of the sustainable marine ecosystems. The banking industry has an important role to play to support the conservation and sustainable development of the oceans, seas and marine resources through Blue Financing under Green Banking ideology. The UNEP-FIs have developed the Sustainable Blue Economy Principles that can be adopted by Pakistan banking industry for the creation of a sustainable Blue Economy.Pakistan banking industry is in the initial stages of Green Banking adoption to reduce their own adverse environmental impacts through digital banking initiatives but the area of Green and Blue Financing is not being focused in true spirit.

The Prime Minister, Imran Khan, had declared the year 2020 as the ‘Year of Blue Economy’ to gain maximum advantage of the blue economic resources. Blue Finance can play an instrumental role in the development of the country’s sustainable blue economy. The State Bank of Pakistan (SBP) needs to launch various Blue Finance schemes for providing low interest loans for marine conservation, waste management, and various marine eco-system sustainability projects. The IFC is providing Blue Loans for setting up recycling facilities for approximately 50 billion PET (polyethylene terephthalate) bottles globally.Similar,Blue Financing schemes can also be availed by organizations in Pakistan. Sustainable Blue Financing schemes should be launched for all related industrial sectors including ports, shipping companies, renewable energy, fisheries, maritime transportation, tourism, climate change and waste management, etc. Coastal tourism activities are also a major cause of environmental unsustainability in Pakistan. The current Government should focus on the development on coastal eco-tourism. The Blue Economy can be developed through issuance of Blue Bonds for investment in projects aimed at restoring, protecting or maintaining the diversity, productivity, resilience, core functions, value and the overall health of marine ecosystems.

An important area for Blue Economic investment can be projects like Gawadar or other developmental projects near various water sources. The port city of Gawadar can be developed on green construction principles and developed as a hub for various green industries such as eco-hospitality, eco-tourism, green or electric transportation, green supply chain management, and other environmentally friendly industries. Recently, China has stated plans to transform the Belt and Road Initiative (BRI) into green projects and has issued guidelines for green investments under BRI. This has created a huge opportunity for Blue and Green Financing in the China–Pakistan Economic Corridor (CPEC) projects which can be converted to Green CPEC projects.The Pakistani Banking industry can help finance this transition towardsa Sustainable Blue Economy.The Government of Pakistan need to develop the country’s Blue Economy as a sustainable marine economic development model. The sustenance of the Blue Economy is essential for humanity as a whole, and to counterbalance the effects of climate change.

About the Author

Syed Asim Ali Bukhari is a Senior Manager – Green Banking Officer in Bank AL Habib Limited, Pakistan having more than 15 years of practical experience. He is also doing his PhD in Green Banking from Graduate School of Business, UniversitiSains Malaysia, Penang, Malaysia.