It is regrettable that Pakistan’s blue economy boasts an untapped estimated potential of up to $100 billion annually, but currently contributes less than 1% to the national GDP compared to 7-35% in comparable maritime economies such as the Maldives, Norway and the UAE, indicating substantial scope for expansion. According to Co-Chairman of Prime Minister’s Maritime Reforms Task Force Admiral (Retd) Iftikhar Ahmad Rao, 84 out of 99 recommendations presented to the Prime Minister have so far been implemented to revamp the maritime sector.
With a 1,050 km coastline and an Exclusive Economic Zone (EEZ) spanning approximately 240,000 square kilometers, key growth sectors include fisheries, maritime trade, coastal tourism and offshore renewable energy. Despite its vast potential, the sector has historically suffered from fragmented governance, over-exploitation of marine stocks and a general case of “sea blindness”. In this backdrop, credit goes to Minister for Planning and Development Prof Ahsan Iqbal who worked hard and in close coordination with all stakeholders prepared a framework for development of the country’s blue economy. The Co-Chairman of the Task Force has not explained the nature of the recommendations and their impact but hopefully this will become clear in coming months and years. He has candidly pinpointed factors and reasons behind sluggish development of the sector in the past but again made no mention of how the Government intends to overcome them. There is logic behind the decision of the Task Force/Ministry not to build more ports as the existing ones have the capacity and potential to take care of existing and future requirements of port facilities. However, there is a big question mark as to why the country has not been able to operationalize fully the Gwadar Deep Seaport. Ironically, after construction of ports, it has dawned upon the authorities concerned that their connectivity could not be completed without improving Mainline-I and II of Pakistan Railways. As the ML-I project will take years to complete, the main bottleneck in the ways of proper connectivity will be there for the foreseeable future. Similarly, the Co-Chairman pointed out that the original concession agreement for Gwadar Port was not favourable to Pakistan as all the port and free zone development rights are with the Chinese company but expenditures were the responsibility of Pakistan. He rightly called for a review of the agreement but the question arises as to why we negotiate lop-sided agreements with investors ignoring fundamental interests of the country as was also highlighted by the capacity payments to IPPs. According to him, Gwadar Port could not be fully developed because of issues related to security, road and rail connectivity and provision of water and electricity.
No doubt, the security issue has different dimensions but why have we not been able to ensure connectivity and provide basic facilities. Leave aside Gwadar, why our Karachi ports lack facilities that are routinely offered by other ports despite claims by the successive government to attract commercial ships. After decades, overall port dwell times of 8-10 days remain substantially higher than regional benchmarks (India: 2.6 days for imports). Cargo throughput at Karachi Port (54 million metric tonnes) and Port Qasim (45 million metric tonnes) has stagnated, with utilization at approximately 50% of capacity. As for attracting vessels, we imposed 22% sales tax till last month as compared to India, which offered 30% subsidy. Isn’t it criminal negligence that we paid $4 billion to $8 billion annually in freight charges as we closed our eyes to the need of promoting local shipping lines? The coastal belt of Sindh alone holds an exploitable wind power potential of over 50,000 MW. Recent offshore licencing rounds have committed $80 million in investment but much more needs to be done to exploit this potential for clean energy. Coastal tourism is currently generating around 300 million but experts point out the figure could go to $6 billion with proper planning and provision of necessary infrastructure. The issues stand identified but it is a question of prioritizing them based on their potential to contribute to the socio-economic development of the country.
