Regional cooperation needed to promote blue economy
This month, Pakistan and Russia agreed a $10 billion offshore gas pipeline deal. Russian energy company Gazprom will prepare and submit a feasibility study for review and agreement by both governments. It is not often that the seas around Pakistan benefit the entire region. The project offers benefits for two regional blocs namely the Economic Cooperation Organization and the South Asian Association for Regional Cooperation (SAARC).
The China-Pakistan Economic Corridor (CPEC) — perhaps the fastest-moving component of China’s Belt and Road Initiative — also includes projects in the Arabian Sea that could benefit the region and bring about greater trade and investment integration. A key prospect is the expected increase in the transit of trade through Pakistan once Gwadar Port, envisaged under CPEC, is running at full capacity. The Iranian government has also expressed a desire to cooperate in port-related activities and has designated Gwadar and Chabahar (which is located in Southeastern Iran) as sister ports.
Such opportunities remind us how important it is to view the blue economy — in other words, the sustainable use of ocean resources for economic growth and job creation — as an instrument to bring together countries in the region and create economic interdependencies, which in turn help to promote peace. Mega-infrastructure projects such as the development of Gwadar city and port and the Pakistan-Russian offshore gas pipeline have the potential to create a case for policy emphasis on more traditional areas of the blue economy.
To start with, World Bank Group has estimated that marine fisheries contribute in excess of $270 billion a year to the global gross domestic product. Similarly, more than 80 percent of the global merchandise trade takes place through sea transport channels. The volume of trade by sea is expected to double by 2030 and quadruple by 2050. However, a lack of development of ports and trade-related infrastructure prevents a large part of this trade from moving through South Asia.
Another area of opportunity is sustainable marine energy, which can be harnessed to help meet the electricity needs of coastal areas. The promotion of renewable energy in general also helps protect the already available natural resources. A missed opportunity in the region has been the failure to develop coastal tourism, which has the potential to create large numbers of jobs in the micro, small and medium enterprises associated with the sector. Estimates suggest coastal and small-island countries attract 41 million tourists a year.
The volume of trade by sea is expected to double by 2030 and quadruple by 2050. However, a lack of development of ports and trade-related infrastructure prevents a large part of this trade from moving through South Asia.
Dr. Vaqar Ahmed
Infrastructure development alone cannot help the expansion of blue economy, however. Complimentary policies to tackle the impacts of climate change and waste are equally important. The effects of climate change are already resulting in coastal erosion, acidification, changes in ocean currents, and unpredictable rises in sea levels. Likewise, waste management should be a priority for municipal administrations close to the sea. Almost 80 percent of the waste in the oceans comes from land.
A lack of essential data also prevents long-term planning for the blue economy. Pakistan has the sixth-largest population in the world but it is difficult to find comprehensive data on the size of the blue economy and its sub-sectors. A large part of the data gaps could be bridged if the relevant institutions in the region — the institutes of maritime affairs across South Asia, for example — cooperated in the sharing of information and data resources.
Pakistan has also experienced an increase in its land as a result of sea recession, sometimes also referred to as the extended economic zone. This is where the interest of the private sector can be invited, as it is far more efficient in delivering on investments related to fisheries, coastal tourism, shipping and marine energy. Unfortunately, the dominance of the public sector in these areas has slowed down major initiatives. For example, in 2007 two shipyards were approved in Gwadar and Bin Qasim. However not much progress has been made and shipbuilding has still not been declared as a formal industry.
While the federal government in the country needs to announce a new national maritime policy, as the previous one is outdated, it is also the responsibility of provincial governments to recognize the blue economy in their medium-term development plans and budgets.
Finally, regional bodies such as the SAARC Food Bank and SAARC Development Fund can join forces to fund a long-term agriculture-development program in the coastal areas of South Asia. The cultivation of, for example, dates, coconut and palm oil could not only increase the supply of such high-demand items, but additional yields will create incentives for the food-processing industry to create regional value chains.
• His book ‘Pakistan’s Agenda for Economic Reforms’ was recently published by the Oxford University Press. Twitter: @vaqarahmed