Ayesha Saba

Pakistan needs to devise a result-oriented and effective plan for the development of the blue economy, according to experts.

They told WealthPK that Pakistan is one of the countries espousing the sustainable development goals set by the United Nations and integrating them into the national development plans. They said that the country has a good maritime or blue economy potential of around $100 billion.

With a coastal belt spanning over two provinces of Sindh and Baluchistan and easy access to the Arabian Sea, Pakistan has abundant marine resources to strengthen its economy and national security.

Dr Mehmood Khalid, a senior research economist at the Pakistan Institute of Development Economics, told WealthPK the overall fiscal position of the country was dismal.

“In the current budget, only R2 billion has been allocated for the maritime sector. The last year’s budgetary allocation for the sector was Rs5.6 billion. Now it has been reduced to Rs2.1 billion,” he said.

He said that Pakistan lagged behind other countries in many sectors. He said that the livestock and fisheries departments were established in 1985 but no concrete steps were taken for further development of those sectors.

“A major issue is tax incentives in the shipping sector,” said Dr Mehmood. He added that according to a report of the Parliamentary Committee of the Ministry of Maritime Affairs, released in June 2022, no ship was registered in Pakistan during the last 20 years.

Dr Mehmood said that in 1970s, Pakistan’s 40 percent of freight was through sea and the country had around 70 ships. He said that investors are not willing to invest in this sector now, even if they are offered additional incentives. “It is not about the finances but the cost of doing business, which is the main hurdle in the way of private investment in this sector. The quantity of taxes has been reduced but the number of taxes is still very high. There are many types of different regulatory fees, which have to be paid in order to get a ship registered and many more certificates are required to run the business,” he added.

He said that despite the measures of giving incentives through federal tax exemption and lowering the tax to $0.75 per Gross Registered Tonnage (GRT), the private sector was reluctant to invest in the sector. He said that a businessman had to pay customs duty, additional customs duty, sales tax, regulatory duty, the Balochistan Development Authority tax and many more.

“We just have one policy document. It is the marine merchant policy of 2021 but unfortunately, it does not cover all aspects of the blue economy. It misses certain features like coastal tourism, aquaculture and environmental concerns,” said Dr Mehmood.

He stressed the need to devise a comprehensive marine policy that must include each and every sector of the blue economy to ensure optimal use of ocean resources, rather than sticking to few ordinances and regulations. “The policy will require the input of all stakeholders to develop the blue economy,” he added.

Babar Bilal, the director of the National Institute of Maritime Affairs, told WealthPK that Pakistan’s blue economy was not data-oriented.

“In the maritime sector, we can’t progress unless we have accurate data. Proper research-based data can tell us how this sector is performing and moving forward, how many ships are there, how fishing boats are performing and which areas need to be harnessed,” he added.

He said that the blue economy is a new phenomenon, which requires proper research assessments and strategies. “The sector needs well-thought-out actions by the government including improving ease of doing business,” said Babar Bilal.

According to WealthPK research, China-Pakistan Economic Corridor can play an integral role in shaping the future of Pakistan’s blue economy. The fundamental goal of CPEC is to foster regional integration and economic growth.

Credit : Independent News Pakistan-WealthPk