Pakistan's untapped blue economy

With Pakistan's struggling economy, stagnated and narrow export base for products and markets, it is imperative to move towards diversification and domestic economic activity to harness untapped economic potential. In this context, one of the most underutilised economic opportunities in Pakistan is the blue economy.

With a coastline stretching over 1,000 kilometres and a strategic position along key global trade routes, Pakistan has the natural advantages needed to transform its maritime sector into a significant contributor to national development.

At present, the blue economy contributes only around 1.5% to 3% of Pakistan's GDP, but with well-planned strategies, this could rise to 10% or even 15% in the coming decades. The shipping sector alone could generate $8-10 billion annually by 2030-2035, while fisheries and aquaculture might add another $17-18 billion.

Maritime tourism, renewable energy projects, and the ship recycling industry at Gadani could further boost revenues, potentially exceeding $40 billion in total.

However, multiple challenges hinder progress, including a lack of awareness and understanding of maritime economic opportunities, political instability in some coastal areas, infrastructure deficiencies, policy gaps, and regulatory inefficiencies.

Moreover, external factors such as climate change, its impact on marine biodiversity and coastal populations, the sustainable management of marine resources, combating marine pollution, and balancing economic growth with environmental sustainability must be addressed while harnessing this untapped potential. To fully realise this opportunity, the following actions may be considered.

Firstly, introducing strategic reforms to address policy gaps and regulatory inefficiencies is crucial. This involves creating a comprehensive maritime policy that promotes sustainable practices and encourages investment in the blue economy. The new maritime policy should focus on economic growth while ensuring sustainability and inclusive development.

Secondly, investing in modern port infrastructure is essential for boosting trade and shipping. Ports like Gwadar can make Pakistan a key hub for maritime commerce. While some argue that Pakistan already has underutilised port facilities, particularly in Gwadar, the full potential of these ports, including transit trade and their role as regional centres under a hub-and-spoke model, remains largely untapped.

Thirdly, immediate attention is required to invest in human capital. Skilled human resources, developed through education and training programmes focused on maritime industries, can drive innovation and efficiency. The lack of skilled manpower in areas such as the fisheries industry, shipbreaking, and coastal economy entrepreneurship presents a huge opportunity cost, which can be transformed into profit through targeted skill development programmes.

Fourthly, we should adopt ecosystem-based approaches and nature-based solutions to protect and restore marine environments, involving both public and private sectors. Circular economy principles must be understood, applied, and encouraged to minimise waste and improve resource efficiency. The private sector must play its role in reducing environmental impact and promoting sustainability through responsible business practices.

Fifthly, Pakistan should encourage domestic investment in profitable projects such as offshore and tidal energy, fisheries and marine aquaculture development, and merchant shipping.

In addition, engaging in international partnerships is imperative to share knowledge, technology, and best practices for sustainable blue economy development.

Like most game-changing initiatives, blue economy development may also face financing challenges, even if it gets the required policy design and focus. Rather than waiting for a miracle to secure allocations from an already strained fiscal space, Pakistan can launch a specific fund, the Blue Economy Fund (BEF), to drive this strategic transformation.

This fund could attract domestic investors, including those from the retail market, institutional investors from local and international markets, and development partners such as the World Bank.

The BEF would work towards identifying short-, medium-, and long-term investable projects and activities, reaching out to relevant investors and financing partners accordingly. It could begin with low-hanging fruit, such as aquaculture, coastal and tidal energy projects, deep-sea fishing, and improving port infrastructure. The fishing and marine aquaculture sectors, in particular, remain vastly underutilised in Pakistan's coastal areas.

Harnessing the untapped potential of the blue economy is not only an economic necessity but also a crucial strategic and policy framework to ease political and social unrest in coastal areas. It has the potential to contribute significantly to economic growth, environmental sustainability, and social inclusion. However, time and tide wait for none.

THE WRITER IS AN INTERNATIONAL ECONOMIST