Pakistan and the Blue Economy: Challenges and Prospects

The world is facing major challenges to sustainable economic development. States are moving towards seas and oceans to sustain their economic development and national power and the phenomenon is known as “Blue Economy”. The idea of Blue Economy recognizes the “seas and oceans” as main drivers for the economic development with great potential for innovation and growth. World Bank defines blue economy as “sustainable use of ocean resources for economic growth, improved livelihoods and jobs, while preserving the health of the ocean ecosystem”. Another term used is green economy which is defined as an economy that aims for sustainable development without degrading the environment.

Pakistan is blessed with more than 1000 km coastline along Arabian Sea, 240,000 km2 of exclusive economic zone (EEZ) and 50,000 km2 of continental shelf provides significantly large maritime avenues for exploration. This include but not limited to exploration of oil, gas and mineral reserves from sea, seabed and subsea soil mineral, marine and coastal tourism, seafaring community, coastal economy, development of port infrastructure to handle country’s seaborne trade, shipping, shipbuilding and ship breaking industry and last but not the least fisheries industry.

However, it is felt that, sea is entirely absent from the national priorities. Indeed a large portion of our population will pass their life without ever setting their eyes on the blue waters washing Pakistan’s shores. We suffer a case of sea blindness. Pakistan has to see as to how these Blue waters can help to speed up economic growth and meet the challenges to develop as a maritime nation.

In Pakistan, Ministry of Maritime affairs is the main administrative body and is supposed to issue policy guidelines related to improvement and regulation of maritime activities. Unfortunately, no worthwhile efforts have been made by any government that came to power thus depriving this country of the immense potential that blue economy offers The Belt and Road Initiative (BRI), of which CPEC is a flagship project, opens up new vista of corresponding opportunities for the whole region, with Pakistan being one of the prime beneficiaries Under CPEC, development of Gwadar port would ensure strengthening of maritime sector and it is now up to the present government to ensure maximum utilization of this project and blossoming of our blue economy.
Now, I will discuss various sectors of our maritime domain separately while highlighting, the challenges and opportunities presented by each one of them.

In the contemporary globalized world, a strong national shipping sector and healthy state of national flag carriers is reflection of thriving economy. In case of Pakistan, unfortunately, the number of national flag carrier is just 11 ships; whereas, contribution of private entrepreneurs is almost nil. Ironically, Pakistan pays almost 4 to 5 Billion US$ annually in freight charges to foreign carriers. From a sizeable fleet of more than 70 ships although of limited capacity in early 70’s, the present strength of Pakistani Flag Carriers is lower than any desirable threshold. Numerous factors such as lack of sound business policies, government driven sponsorship on certain cargoes etc. can be attributed to the same.

The role of shipping industry is crucial in supporting the growth of international trade by providing an efficient and cost effective mean of transportation. Due to its geography and the geo-political situation in the region, Pakistan is heavily dependent on sea for its international trade. The sea carries over 95 percent of Pakistan’s trade, which is approximately 36.3 percent of its GDP. However, despite such heavy reliance on seaborne trade, Pakistan’s shipping industry has remained neglected in the past.

Development of shipping industry is important for Pakistan for economic growth and national security. A healthy shipping industry can save foreign exchange expended on freight charges, earn additional revenues, provide added employment opportunities, and most importantly protect and promote domestic trade from unfavorable rise in freight and insurance charges specially during heightened tension in the region. In terms of national security, a well-developed national merchant marine reduces the dependence on foreign carriers, which may not assure continuous supply in case of a conflict. This is especially relevant in case of Pakistan where national merchant marine transports about 14 percent of the total cargo and risk of a conflict with neighboring India is always present.

It is important and remained challenging for the government to prove its sincerity vis-à-vis promulgation of the policy and protection of genuine interests of the business community in addition to creating a level playing field to attract the private investor.Although a policy change has been implemented by the present government but its result are not visible due lack of confidence of private sector in government policies which are not consistant.


At the time of independence, there was no shipyard in the country. Soon after independence, Government of Pakistan realized the importance of shipbuilding industry and KS&EW came into existence in 1955 and was incorporated as a Public Limited Company in 1957. The first vessel was constructed and delivered to KPT in 1960. Currently KS&EW is the only institution which undertakes the shipbuilding, ship repair, and general heavy engineering activities to cater the needs of national maritime stakeholders including Pakistan Navy, Karachi Port Trust, Pakistan Maritime Security Agency and Port Qasim Authority. It has played a historical role in transferring of technologies and broadening the industrial base since its inception in 1957. The institutional capacity of KS&EW consists of skilled manpower and multifaceted technical assets and infrastructure. Borne capacity of KS&EW includes two graving docks (upto 26000 DWT), three shipbuilding berths (upto 26000 DWT) and two Quay Walls (General Purpose Berths). Recent addition of ship lift and transfer system has enhanced the capacity of KSEW whereby repairs of large number of ships and other crafts can be undertaken simultaneously which is a positive step in the right direction, It is important to note here that large ships construction at KS&EW is limited due depth of the channel.

Apart from enhancing the capacity of existing KS&EW, establishment of new shipyards along Pakistan’s coasts, would be vital source for national economic development and poverty alleviation. In this regard, the Government’s approval of long awaited project of building shipyard at Gwadar is a timely undertaking which will enhance the share of Pakistan’s maritime sector in national and global economy. The plan envisages a shipyard capable of building very large and ultra large crude carriers. The project also aims to establish repair facilities for large cargo carriers. However, no headway is visible of this project since this decision was taken by the previous government.

Shipbreaking and Recycling

92 per cent of ship recycling in 2011 took place in India, China, Bangladesh and Pakistan. Pakistan, despite its capacity, has the smaller share of just 11%. The only shipbreaking yard of Pakistan is located in Gadani on Balochistan coast. There are 127 shipbreaking plots in Gadani from where the scrap metal and other materials are trucked to Karachi for recycling. This sector provides employment opportunities to about 15,000 workers. This industry indirectly facilitates the livelihood of more than 400,000 individuals.

In the 1980s, the Gadani ship breaking yard was known to be the world’s largest, with more than 30,000 direct employees producing about 1 million tonnes of scrap. However, in 2011, only about 3,013,926 tonnes of scrap was produced and the ship recycling industry provided 27 percent of the melting steel scrap. High sales tax, income tax etc.and competition from ship breaking yards in India and Bangladesh have reduced Gadani’s output.Looking at global shipping scenario, The government needs to make long term taxation policies so that this sector can contribute in employment as well as revenue generation in the province of Balochistan.

Fisheries sector is contributing marginally in terms of foreign exchange towards the economy of Pakistan. Besides, it is also the cheapest source of animal protein from variety of species found in country’s EEZ, it also provides livelihood to thousands of people residing near Makran coast. Though Pakistan fishery started from scratch with virtually single fishing trawler after independence, however, today it has evolved into a mammoth fleet comprising of variety of relatively small boats with varying sizes and fishing nets. Among many other factors, this increase in fishing fleet size has affected this industry on two fronts. On one hand, more people have been provided livelihood but at the same time it has resulted in over fishing, illegal sale of fish at sea, eradicating numerous fish species owing to fishing in the breeding grounds close to the shore because of the limited size of boats. Besides, owing to marine pollution resulting in depletion of mangroves, being the breeding grounds for shrimps and other species have also adversely affected this sector. Exports from this sector have been drastically reduced owing to ban imposed by European Union (EU) since 2007 on the pretext of unhygienic conditions on board fishing vessels and fisheries auction yards and other unsanitary practices involved in fish processing plants.

Pakistan fish industry contributes less than 0.5% in country’s GDP. Juxtapose to other regional countries such as Bangladesh whose annual earnings from sea food exports totalled US$ 530 M in year 2015-16 while contributing over 4.5% in country’s GDP, Pakistan sea food industry has negligible contribution in country’s economy. It is imperative for Pakistan to fully exploit its marine resources to earn significant amount of foreign exchange thereby improving overall health of this sector, ensure food security and respectable livelihood for those directly or indirectly involved in fishing industry. CPEC offers an excellent opportunity for fishing industry revival and growth by learning from their Chinese counterparts whose sea food exports exceed US$ 20 billion.
Environmental Degradation – Endangered Biodiversity.

Karachi being the hub of economic activities and industrial zones in Karachi, there is sharp increase in population and industrial wastes. It is estimated that more than 470 million gallons of effluents are dumped into Arabian Sea daily leading to collapse of eco system and adversely affecting biodiversity in the Arabian sea and resulted in eradication of numerous species. No efforts either by the provincial or federal government have been made to arrest the situation which is a disaster in the making. Water treatment plants of huge capacity are required to treat these effluents and other waste before dumping them to sea.
Offshore oil and gas.

There is a huge potential of finding oil and gas in our EEZ and continental shelf. Although a number of wells have been drilled but not much success achieved. There are no worthwhile efforts made by government in this direction except for relying on foreign companies. We need to develop indigenous capability for exploring our EEZ and continental shelf. With the development of technology, deep sea oil exploration is becoming a viable option which needs to be exploited as one successful well identifying large reservoir of oil can change the destiny of this nation.


Despite having more than 1000 km long coastline, no concrete efforts have been undertaken by Federal or provincial governments of Sindh and Balochistan to promote marine aquaculture. United Nations Food and Agriculture Organization defines aquaculture as farming of aquatic organisms, including fish, molluscs, crustaceans and aquatic plants. Though worldwide aquaculture has transformed into a leading industry, however, in Pakistan it is still in infancy and underdeveloped sector.

Marine Based Energy

Uninterrupted supply of Energy is backbone of economic development of a country. Alternate source of energy, for instance, renewable energy is the need of the hour to achieve sustainable growth and to preserve for the upcoming generations. Poverty eradication and basic human living are directly correlated to energy consumption and presently the energy consumption is very low worldwide and even lower in developing countries due to higher prices. Blue Economy is the phenomenon which highlights the sea as a potential source enriched with natural energy. Some of the sea based renewable energies are Tidal Power; Wave Power; Ocean Thermal Energy; Offshore wind power which again can be exploited as cheaper energy source.

Coastal and Marine Tourism

Coastal and Marine tourism refers to sea and land based activities including swimming, sun bathing, surfing, boating, yachting, nautical sports and other recreational activities. It promotes tourism and also significantly boosts economic development by bringing foreign exchange earnings by import and export related goods and services, contributions to government revenues, helps in generating new employment opportunities, etc. South Asia’s coastal regions are extraordinarily rich in ecological diversity. Coastal tourism is expanding in the region as more than 8% of the world’s mangrove areas are in South Asia. The dry land mangroves of Pakistan support thousands of floral and faunal species. Pakistan must make use of this huge potential and develop those beautiful sand beaches on the makran coast. Here I would like to mention that beautiful stretch of road while travelling to Ormara on the coastal highway. Wind erosion has casted amazing sculptures in the sandy mountains. It’s a unique feature but remains unexplored.

Ports and Maritime Infrastructure

The port of Karachi is Pakistan’s largest and busiest seaport, handling about 60 percent of the nation’s cargo. It has two container terminals, operated by private sector and now Karachi Port Trust has completed the biggest project in its history i.e Pakistan Deep Water Containers Port (PDWCP).Port Qasim is Pakistan’s second busiest port, handling about 40 percent of the nation’s cargo. It is located in a channel of the Indus River called Phitti Creek, 35 km east of Karachi. The approach to the port is through a long 45 km navigation channel. One of its major advantages is its proximity to different national transport facilities. Port Qasim has mostly privately owned jetties and terminals for both liquid and solid cargoes. It also has 2 private container terminals. Now with Gwadar becoming fully operational, Pakistan has sufficient port infrastructure but with the envisaged volume of trade in coming years there is a huge potential of growth.


Pakistan has over 20,000 registered seafarers and contribute significantly in national economy annually. Analysis revels that Pakistani seafarers are hardworking, competent and competitive as compared to other nationalities. Pakistan is listed in the International Maritime Organization (IMO) ‘White List’ i.e. fulfilling the criteria of International Convention on Standards of Training, Certification and Watch-keeping for Seafarers. Pakistan’s declining supply of seafarers actually indicates country’s inability to benefit from the shortage of seafarers at international level. To exploit the employment potential in seafaring, it is important that Ministry of Ports and Shipping should proactively pursue the employment of Pakistani seafarers on board the major seafaring hubs such as Greece, Cyprus, Singapore and other countries. It is imperative that the issue of difficulties and delays in the issuance of visas to Pakistani seafarers should be taken up by the Ministry of Foreign Affairs with foreign missions in Pakistan.


Pakistan has tremendous maritime potential which has not been exploited so far. Our population growth and the global trends demand that we turn from a brown economy to “blue economy”. CPEC provides an excellent opportunity for strengthening of our maritime sector and full exploitation of all elements of Blue economy.

Newsletter SignUp

About Rear Admiral (R) Saleem Akhtar HI (M) 1 Article
The author is a retired Rear Admiral from Pakistan Navy after 40 years of service. He was awarded Sitara e Imtiaz and Hilal e Imtiaz ( Military). The Admiral is a mechanical/marine engineer by profession and is a graduate of Royal Naval engineering college,UK, NDU Islamabad and US Naval postgraduate school,monterey, California.