An inter-connected Asia has the potential to grow faster than other regions through a sustainable supply chain and an interlinked maritime sector that can increase its capacity to connect with global networks with greater efficiency to spur growth and prosperity in the region.
Dr Hassan Daud Butt
As the world moves more towards regional constructs, the Indian Ocean region is fast becoming the centre of gravity in global trade. The challenges facing us, are more wide-reaching than ever from political to economic to healthcare, with growth forecasts fluctuating fast. Even with the deteriorating outlook, inter-connected Asia has the potential to grow faster than other regions through a sustainable supply chain and an interlinked maritime sector that can increase its capacity to connect with global networks with greater efficiency to spur growth and prosperity in the region.
Similarly, a regional integration met through the maritime sector apart from its impact on growth and development through greater integration and increasing mutual dependence, could reduce the likelihood of regional conflict. The COVID-19 pandemic and its impact on the global economy demonstrated the importance of a robust Blue Economy which has the potential to address the headwinds in an environmentally sustainable way. Yet, understanding and implementation of particular visions of the blue economy in specific regions deviate according to a national context.
According to ADB’s Asian Development Outlook (ADO) 2022, Pakistan’s situation for FY2023 has deteriorated under heavy flooding with higher domestic energy prices and flood-related crop and livestock losses, and supply disruption. Supply chain difficulties have exacerbated these shortages. Therefore, an out of box economic solution is required to address these headwinds and one opportunity that exists is exploring the opportunities that our coastline offers. Similarly, according to the report of the Maritime Study Forum(MSR), Fisheries provide employment to about 500,000 fishermen directly, whereas, more than 1 million people are employed in ancillary industries.
The rejuvenation of the Blue Economy in Pakistan matters for two main reasons. Firstly, a Blue Economy links environmental sustainability with economic development that can fast affect millions of people living in rural less developed parts of Pakistan. Secondly, Pakistan being part of China’s Belt and Road initiative (BRI) can easily attract Chinese investment in shipping, coastal tourism and shipbreaking ports, and ocean economy-related infrastructure and facilitate new sources of economic growth as part of China’s Maritime Silk Road policy that aims to rejuvenate China’s trading relationship with other states as an opportunity for states to cooperate with China for joint shared prosperity, growth, and security.
The development of the Gwadar port and the inclusion of the Keti Bandar Port in the CPEC projects has opened new vistas of growth for industry and trade and through the Maritime Silk Route, the maritime sector in Pakistan should be given the required attention and thus it is imperative that Pakistan realizes its maritime potential and works to earn prominence among the participating states of the MSR.
There is a need to be proactive to catch up with other nations in this disruptive era leveraging through a pragmatic maritime policy articulation that addresses the aspect of increasing investment in maritime sector-related industrialization for radical economic transformation. All of us need to be captains or advocates of this sector.
An easy solution could be setting up a maritime sector-led Special economic zone along the coastline where all related industries including the industry related to maritime tourism can be shifted and the investors can benefit from the Government policies under SEZ. This may not be a seamless process as stakeholders attached to the maritime sector will have to adopt new ideas and technologies under an improved framework as creating new resources and opportunities are vital to meet soaring demand.
Today in a post-COVID era, a new generation of tech-driven solutions are being explored to reinvigorate the high-tech maritime sector making it more resilient to shocks. We need to discuss the maritime sector more in our business chambers, research institutions, HEIs, and trading associations as it is imperative that we draw the vital attention of our businessmen and industrialists toward our magnificent coastal regions and inevitably toward the sea, and blue economy.
Events like PIMEC are therefore important as they provide opportunities to the local maritime industry to display products at one platform for joint ventures, transfer of technology, and research with international partners while highlighting Pakistan’s vast potential for the Blue Economy. This sector boasts tremendous economic potential, sources of oil and gas, and an abundance of seafood.
In 2019, before the COVID-19 pandemic, the total aquatic product trade between China and ASEAN alone posted $3.649 billion, of which China imported $1.553 billion worth of aquatic products and if we build our capacity through tailor-made fishery management, the Chinese demand for marine products can be guided towards us provided the government facilitates and creates ease of doing business through a robust multilateral framework as our maritime sector has a significant component of national economy and security.
We also need to explore an innovative way of reorganizing our state-owned shipping company by understanding the role of joint ventures and strategic partnerships available in the second phase of China Pak Economic Corridor (CPEC). Although the year 2020 was declared as the year of the Blue Economy in Pakistan, the attention and resources it deserves could not be allocated.
Broadly speaking, to end sea blindness, we need to review some of the rules of the game, which have managed the maritime sector in the last few decades, to create a conducive environment away from conventional ideas about management, operations, leadership, and innovation, making it an important source of income and employment and perhaps improving it to at least 10 percent contributor to the GDP by 2050 and a major contributor towards tourism-related revenue. The pandemic has also strengthened the case for digitalization and eliminating paperwork in the shipping industry, reinforcing the need for standards and interoperability in electronic documentation. Many trade facilitation measures taken during the pandemic require further investments in digitalization and automation with an increased focus on cyber security risks. To further gain on the potential, Gwadar port may be linked with Chabahar and Salalah Port and other regional ports and the development work as per the port master plan may be executed on priority.
While we explore solutions to improve our economy, let’s use our abilities to see how extreme poverty is addressed under the agenda of SDGs to encourage fast connectivity by incentivizing the maritime industry, which can generate employment and enhance exports. To achieve all this, it is expected that leadership amongst key stakeholders as well as at the national level will take pragmatic, bold, efficient, and flexible decisions to improve and benefit from what already exists.
Lastly, our vocational and training centres must be able to provide a steady stream of HR into the Maritime industry which is efficient and skilled to shoulder the task of transforming Pakistan into the future maritime and trans-shipment hub of the region for which the role of the private sector is becoming critical as the government alone cannot undertake this vital task. The task is difficult, yet the dividend is enormous leaving no room for complacency.
The writer is a Projects Management Specialist, and faculty member of the projects management departments at various institutes/universities.
Pakistan Rupee Exchange Rate