Looking closely at the concept of maritime economy it can be understood as a macroeconomic concept. Moreover, blue economy is an amalgamation of sustained economic growth, conservation of the environment and especially focusing on the benefits that can be accrued through water.
Thus, it can be said that it is an integration of sustained economic growth with the onus of growth being on water and its ancillary industries. Moreover, marine ecosystem and coastal economic zones are subsequently used by policy makers in regard to blue economy for future development planning, increase the overall wellness of the population of any particular country and last but not the least, create ample job opportunities. It is sufficing to say then that ocean is becoming a new life line for growing and developed economies alike.
Furthermore, according to different estimates by the UN, the economic value that is currently being accrued by the Ocean economy is around $3 to $6 trillion per annum. To judge the magnitude of this amount, ocean economy is said to be the 7th largest economy of the world. What more, to this end around 300 million people are dependent directly on this sector and a further 200 million are employed indirectly towards its ancillary sectors.
Another thing that needs to be highlighted is the fruitful impact blue economy has towards mitigating the impact of climate change is having on the world economy. Oceans are responsible for absorbing 50% of the anthropogenic carbon dioxide.
To further the discussion, it is paramount to highlight the potential of different sectors of maritime economy in Pakistan that in the long run may become a catalyst for growth. The three most important sectors are the Fishing or Aqua culture, Shipping Industry and the ship breaking Industry. The respective potential of these sectors is as follows; $2 billion, $ 4 billion and $3 billion. Hence by uplifting certain sectors of the maritime industry Pakistan can solve its perennial economic predicaments sustainably. In this regard blue economy’s growth in Pakistan can play a substantial role in eradicating its perennial economic malaises.
Pakistan faces long standing current account problems. That is, in Pakistan we have fewer exports and more imports; this in turn puts undue pressure on our foreign reserves, which then forces foreign exchange to raise thus causing Cost Push inflation in the country. Now, the biggest relief that we may get from the maritime will discuss all the sectors in detail and simultaneously provide solutions to our economic problems. Currently, we pay around $5 billion in freight bill alone that puts extreme pressure on our foreign reserves.
We can easily increase exports or increase the value of fish exports than what we are currently doing. At our present we sell 1 kg of fish at around $2.35 per kg, while the international price hovers around $7 mark per kg. Again, this shows that little value addition in this particular sector will do wonders for our economy.
These examples illustrate how blue economy may become a catalyst for growth in our country. In the famous book: Why nations fail, Robinson and Acemoglu have clearly mentioned that for a sound economy and growth industry, proper institutions need to be in place. They also point out that institutional reforms can never be done across the board. You can identify the strong sectors and build on them to uplift them first. This way a road map is there and the other institutions can eventually follow. The three sectors that are already strong are shipping, shipbreaking and aquaculture. Pakistan should build on their strength to bring a remarkable change in the marine economy scene. Without these institutions development of any sector of the economy is not possible. The institutional decay that has been the major hurdle in Pakistan’s economic growth has started vicious cycle of stagnation and negligence. This has resulted in the underutilization maritime sectors of great potential.
Applying other countries’ example as a model for your own country is no simple task. What may seem as a perfectly befitting example for a country to implement may have many hidden levels and stages that one might not be aware of. Thus, implementing other country’s growth and development models need to be adapted properly. When we look at our neighbors who have been in similar economic and demographic scenarios, we still have to keep a few things in mind. We can never fully implement any other country’s model as it is in our country.
Thus, the core argument that is central for this article is that for sustained economic growth, firstly, it is pertinent that Pakistan incorporates maritime sector in its economy. Secondly, across the board changes cannot bring sustained economic growth, hence the above-mentioned sectors should be strategically targeted so that a base can be established for the maritime sector’s success in the long run