Taking stock of the blue economy

February 5, 2023

Pakistan can benefit hugely by focusing on and investing in the blue economy

Taking stock of the blue economy


ceans and seas cover two thirds of our globe and hold immense resources for the mankind. Countries blessed with direct access to the oceans reap great benefits from those. The earnings utilising seas, coasts, related industries and communities are called the blue economy.

According to the World Bank, blue economy is the sustainable use of ocean resources for economic growth, improved livelihoods and jobs while preserving the health of the ocean ecosystem. The European Commission defines blue economy as the economic activities related to oceans, seas and coasts.

The economic activities included in blue economy range from the exploration of sea-based natural resources, such as fish, hydrocarbons and minerals to marine related industries, such as ports, shipping, ship-building, coastal tourism, renewable energy and marine biotechnology.

There are, broadly speaking, six sectors in the blue economy valued at $24 trillion. It is credited with generating one out of ten jobs in the world. In 2010, the blue economy was globally valued at approximately $1.5 trillion. It is expected to surpass the $3 trillion mark by the year 2030.

Fish is an important food commodity. The global fish industry is currently valued at $113.2 billion. In Pakistan, fish industry is valued at $1.2 billion and supports almost 1.8 million jobs. However, poaching, harmful fishing practices and marine pollution have led to over-exploitation of the fish stock – pushing many fish species on the verge of extinction.

Modern practices like farming fish in a controlled environment can protect fish stocks and marine environment while reducing human dependence on wild fish stock. Another important marine living resource is mangroves, which not only contribute towards economic growth but also protect the ecosystem.

Pakistan is blessed with the sixth largest mangroves jungle which spans over 130,000 hectares. Mangroves can absorb 4-5 times more carbon dioxide than tropical forests, offer protection against environmental hazards and reduce marine pollution by absorbing nitrates and phosphates in deltaic regions. Mangroves also provide a nursery to over 3,000 marine species, including fish, prawns and crabs. In terms of economic growth, they contribute through eco-tourism, boat tours, kayaking, fishing, bird watching and aquaculture.

They can be an abundant source for apiculture, which is bee farming for extracting honey on commercial scale. According to the WWF-Pakistan (World Wide Fund for Nature-Pakistan) data, mangroves are providing livelihood to approximately 500,000 people in the Indus Delta. On average, Pakistan’s mangrove area holds an annual value of about $20 million.

According to the National Institute of Oceanography, over 16,650 million barrels of oil-equivalent gas resources exist in Pakistan’s maritime area. International Seabed Authority’s evaluation indicates that Pakistan’s continental shelf holds approximately $14,000 million worth of untapped oil and gas reserves.

According to another study by the ISA, approximately 4.4 million tonnes of deep-sea mineral deposits potentially exist in the country’s continental shelf. While enjoying sovereign rights over the resources within the EEZ, we have remained unable to exploit it primarily owing to lack of resource mapping and scientific exploration.

Ports are considered vital for sustaining economic lifeline of any country. We have three major ports, namely: Karachi, Bin Qasim and Gwadar. Karachi and Bin Qasim ports are capable of berthing vessels up to 75,000 deadweight tonnage. Currently, Gwadar port can house vessels up to 50,000 DWT. The port has a potential of 88 berths and a capacity to anchor mother ships up to 200,000 DWT. Located in the vicinity of strategically important chokepoint of the Strait of Hormuz, it can become a hub of economic development and an efficient route for world markets via transit and trans-shipment trade.

Pakistan’s contribution to ship-building and repairing is limited to Karachi Shipyard and Engineering Works with a capacity limited to 26,000 DWT, far less than other shipyards in the region.

As a matter of fact, the success of CPEC hinges upon the Gwadar Port. Out of the 2,366 vessels registered in South Asia till 2020, 14 were from Pakistan, 1,429 from India, 627 from Bangladesh, 196 from Sri Lanka and 100 from Iran. With this limited number of national flag vessels, Pakistan pays approximately $5 billion per annum in freight charges to the foreign flag carriers. Global ship building and repair services market is estimated to reach $40 billion by 2028, with a major share in Asia.

Pakistan’s contribution to ship-building and repairing is limited to Karachi Shipyard and Engineering Works. Its 26,000 DWT capacity is far less than other shipyards in the region. Due to the immediate proximity to the Gulf SLOCs, approximately 21 million barrels of oil pass through Pakistan’s EEZ on a daily basis. This offers an opportunity to extend repair and maintenance facilities to vessels plying along these SLOCs. Pakistan has announced a plan to build a new shipyard in Gwadar. Pakistan and China have agreed to develop it jointly.

South Asia currently dominates the shipbreaking industry due to the low labour costs. As of year 2020, 630 ocean-going commercial vessels were sold to scrap yards. Out of these, 446 (90 percent of the gross tonnage dismantled) vessels of different categories were broken down on three beaches in South Asia: 203 in Alang, India, 144 ships in Chittagong, Bangladesh, and 99 at Gaddani, Pakistan. Besides lagging behind in specialised expertise, our shipbreaking industry is affected by lack of demand in steel across the country.

Blue economy is a relatively new concept. However, it is rapidly gaining support and consideration at the global level. In Pakistan, there is a dearth of understanding of the importance of this aspect of economic development. There is a dire need to undertake a campaign for establishing the significance of the blue economy. There is so much to be done in this regard, involving the academia, governmental and non-governmental organisations, think tanks, entrepreneurs, educational institutions and, above all, the public to grasp the essentials as well as dividends of the blue economy.

The task, however, is not simple. It requires great effort and resources. Above all, it needs conviction across the board to realise the dream. The government has the lead role in this but non-governmental organisations can serve as the engine. Efforts have been begun by the Pakistan Navy to underscore the importance of the blue economy. It is organising the first Pakistan International Maritime Expo and Conference from February 10 to 12.

This will be a great opportunity to highlight the potential of our blue economy sectors not only for the domestic audience but also for international investors. The event in which more than 65 countries are expected to participate, will provide an ideal platform for G2B and B2B interaction and negotiations with the target customers and decision makers, as a large number of trade and industry participants from the local and international maritime sector will be attending the event.

The exhibitors will not only participate and showcase their core strengths but can also harness the potential benefits of the blue economy, mainly in the categories of ship/ crew building opportunity, renewable energy, offshore drilling, marine biotechnology, desalination plants, fisheries, marine tourism and coastal development.

The growing role of technology cannot be denied in the maritime domain. It is important to underscore here that doing it with conventional wisdom may not accrue the desired outcome, hence advanced technology should be aimed at. The government has to be cognizant of this aspect. The PIMEC is a prudent step but a PIMEC every two years may not suffice. There is a need for a comprehensive action plan to chart out this journey.

This can be accomplished in three steps: identify, connect and mobilise. The stakeholders in the blue economy need to be identified first. This includes a wide range of actors, who need to be connected with one another so that everybody understands the various roles to be played by them.

They also need to be mobilised for the task. This all requires a clear understanding on part of the government and the relevant departments. Without a comprehensive plan of action and clear understanding Pakistan’s blue stock could remain unearthed for many more years.

The writer is a communication strategist at the Institute of Regional Studies, Islamabad, with an interest in the maritime sector. She can be reached at reema.asim81@gmail.com

Taking stock of the blue economy