The global maritime industry is arguably the largest and the most all-encompassing sphere of human endeavour. The distressing part is that Pakistan’s share of this multi-trillion dollar pie is woefully inadequate.
Those entrusted with national planning in Pakistan never tire of speaking about the country’s central geographical location. Our military keeps discussing our superior strategic orientation. Our economists speak in glowing terms of our geo-economic potential.
All this I’m afraid is just idle chatter until we are able to exploit these natural advantages to our benefit. The sector which best epitomizes our yearned – for potential but is currently a picture of neglect is that of the maritime sphere. Our lack of awareness about this domain can be gauged from the fact that even supposedly enlightened individuals would be hard-pressed to name more than two aspects associated with the maritime spectrum.
Significance of the Maritime Sector
The significance of the maritime sector, for a start, can best be emphasized through an established sequence of linkages:
a. First and foremost, in terms of opportunity, some 90% of world trade by volume is carried out via the sea. Most countries use their rivers in an effective manner for inland transportation of people and goods.
b. Secondly, a large number of ships are needed for the purpose of handling various types of cargo; such ships include container vessels, crude carriers, chemical carriers, LNG carriers, break-bulk cargo carriers, general cargo carriers and the list goes on.
c. Thirdly, these ships have to be manned by trained seafarers, creating job opportunities that are well-paying and much in demand. A projected global shortfall of around 90,000 exists, which our own nationals can comfortably fill to a reasonable extent, provided they are suitably educated and trained.
d. Fourthly, these ships have to be constructed in commercial yards, which is another profitable enterprise. These ships also need periodical maintenance & repairs and hence the need for ship-repair yards. Ship repair requirements can take the form of emergency docking, machinery defects, hull repairs, tank cleaning, machinery overhauls, alterations and repainting. Ship conversion is also a lucrative activity.
e. Now these ships have to be berthed in ports to load and off-load their cargo; and hence the need for ports. The importance of a port stems from the fact that it is not only a place for simply handling cargoes, it is much more than that. The more diverse the range of integrated services it offers, the more competitive it becomes and the more productivity it generates. The availability of logistics centers, free trade zones and multi-modal transportation facilities within the port area enhances its importance. A number of associated activities, in addition to the value-added services just mentioned, like ship movement control, logistics management, cargo handling and transportation, pilotage, tugs, port control, as well as the need for dredging and navigational aids, automatically get generated.
f. On completion of their useful life, ships need to be disposed off. The most profitable way of doing so is to recycle them. The ship recycling industry generates a vast amount of cheap raw material and creates a large number of jobs.
g. All over the world, fisheries, aquaculture and mariculture generate a lot of revenue and jobs, both in prime and associated fields.
h. Coastal tourism is greatly in demand. It possesses the potential of furnishing unlimited employment opportunities and significantly contributing to the economy of coastal regions.
i. As businesses multiply, such thriving maritime activities give rise to ancillary services such as insurance, banking, brokering, vessel classification and consultancy, which add to the robustness of the sector. Such a boom leads to the formation of maritime clusters which helps in developing a sound knowledge base through skill-sharing and creates business opportunities for maritime-related activities and expands employment prospects.
j. The economic potential of offshore hydrocarbons and usable mineral deposits is immense. These include iron, manganese nodules and crusts, oil, gas and gas hydrates, with the latter having all the trappings of evolving into a very useful source of clean energy. Preliminary scientific indicators point to the presence of large deposits of gas hydrates off the coast of Balochistan.
k. In our coastal areas, three things are a constant: heat from the sun, offshore winds and ocean currents. All these three sources, if properly harnessed, can prove to be huge reservoirs of renewable energy. Apart from solar panels, ocean thermal energy, utilizing the temperature differential between the surface water and the lower layers, can be a clean source of power generation.
Where we stand today in terms of our maritime prowess can best be illustrated through a comparative process:
a. Pakistan’s utilization of its rivers for inland transportation is non-existent, despite this mode being recognized as the most safe, economical and environment-friendly mode of transportation. Most countries extensively use rivers for inland transportation and cruises.
b. Pakistan National Shipping Corporation presently operates some 9 ships with a total deadweight tonnage of 642,207 which is considerably less than most private ship-owners in Greece. By contrast, Japan, which controls the largest number of merchant ships, possesses a fleet of over 132 million tons (as of 31 December 2010). Most of the general cargo trade moreover is carried out in container ships, of which PNSC doesn’t operate any.
c. Pakistan’s share of seafarers can be estimated at less than 1%, which is nowhere near the 30% stake commanded by a much smaller country, the Philippines.
d. The sole shipyard in the country, Karachi Shipyard & Engg Works Ltd, is doing reasonably well by Pakistani standards, having come out of the red some five to six years ago. Its profits are however mainly dependent on ship-building orders from the Pakistan Navy and its competitive edge is not being put to the test. A case in point is an international tender floated by KPT some time back for construction of a tug, which was bagged by a Bangladeshi yard. KSEW has likewise not been able to partake of the huge requirement of periodical maintenance and repairs of the large number of ships transiting to and from the Gulf. By contrast, shipyards in South Korea got orders of $18.5 billion in the first six months of last year. A word of caution though: while Chinese yards, during the same period also bagged record orders of around $10.5 billion, it was just 4% of the total yards that actually secured the orders. Many Chinese yards are accordingly trying to offset this by expanding their oil rig businesses.
e. The largest port in the country, that of Karachi, is presently handling around 1.4 million TEUs of containerized cargo and 26 million tons of other general and bulk cargo per annum. By contrast, the Port of Singapore handled 32.5 million TEUs of containerized cargo and 227 million tons of other cargo in 2012. The Port of Singapore, moreover, earns over five billion dollars in revenue, simply because it provides an array of value-added services.
f. The only success story in the maritime sector, strictly in the economic sense of course, is that of the ship-breaking industry. In terms of tonnage scrapped during the past year, Pakistan occupied the No.4 slot at 15%. This has come at a heavy cost though: the workers are made to operate in extremely harsh and hazardous conditions with negligible facilities; many deaths, through accidents or exposure, go unreported. With the coming into force of the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009 and new EU regulations discouraging its citizens from breaking ships in countries not employing the desired methods of dismantling, Pakistan would need to either conform or lose its standing. In any case, the safety and welfare needs, long ignored, of the workers, should always be kept foremost in mind.
g. Pakistan has recently managed to cross the 300 million dollar mark in terms of fishery exports, which in comparison to the Vietnamese earnings of over 5 billion dollars, is still negligible. The ban imposed in 2007 by the European Union, which at the time was our biggest customer, owing to laxity in hygiene and handling, was an eye-opener. Protection of our fishery habitats in marine and fresh water ecosystems such as wetlands, mangroves and spawning areas is essential for attaining sustainable exploitation, which is the buzz word these days, and understandably so.
h. Because it offers both tranquility and a large number of sea-based activities, coastal areas have become the favourite haunt of tourists. Encouraging coastal tourism does not appear to figure high on Pakistan’s agenda, despite the country possessing a relatively long coastline. Apart from the Karachi area, our coast is largely undeveloped. That’s a bad thing and a good thing at the same time: bad, because it shows that we have a long way to go; good, because it gives us the opportunity to develop it as per the defined norms of Integrated Coastal Zone planning and management. In places like the Maldives, Langkawi, Phuket and Bali for instance, coastal tourism is a booming industry. And its not only about job creation and the spending power of tourists; it gives rise to hotels, restaurants, promenades, shopping areas and innumerable sea-based activities.
i. Because of a lack of maritime activities in the country, ancillary services and maritime clusters too are negligible. By contrast, the amount of maritime insurance work alone being handled by Lloyd’s of London is phenomenal.
j. National Institute of Oceanography is the only Pakistani Agency involved in Marine Scientific Research and that too on a modest scale. Many countries, India included, are investing heavily in such research with a view to develop the requisite technology to harness the unlimited energy and mineral resources of the oceans and its sea-bed when the time is ripe.
We have seen how big the pie is. The major problem which keeps us from taking advantage of the immense potential of the maritime sector is a general lack of awareness and consequently a lack of vision and capacity.It thus needs to be kept in mind that a vital pre-requisite for availing the benefits of the vast maritime sector is capacity-building through maritime education and marine scientific research.
If we are indeed serious about tapping our enormous maritime potential, a brief glance at our pressing issues will be in order:
a. The Ministry of Ports & Shipping is currently the only ministry at the federal level solely dedicated to maritime matters. While coastal development, coastal tourism, environmental protection and pollution are the preserve of the provincial authorities, other ministries and divisions look after the associated maritime matters related to imports & exports, ship construction & repairs, ship recycling, maritime security and marine scientific research.
b. All maritime issues being inter-linked, inter-ministerial coordination appears to be a weak factor. The Marine Wing in the Ministry of Defence is ill-equipped and under-staffed to deal with coordination matters of such huge proportions. Though it enjoys representation from amongst all the major public sector stakeholders, the National Maritime Affairs Coordination Committee, with the Defence Secretary in chair, is certainly not as effective as it should be for a variety of reasons: ministries tend to zealously guard their turf, take the proceedings lightly, meetings are held irregularly and most members prefer to send their reps rather than attending themselves.
c. The current environment of having to run around various power centers for resolving basic issues is a source of discouragement for private stakeholders.
d. Most of the civil servants charged with preparing maritime policies and plans and ensuring their effective implementation are not well-versed in its operational and technical intricacies.
e. Detailed feasibility studies, covering all aspects, of major maritime projects are rarely undertaken, resulting in undue wastage of public money, without obtaining any tangible benefits.
f. Coordination, both horizontal and vertical, between the federation and the provinces, between public and private stakeholders, is another weak area which needs to be surmounted if the faith of the private sector is to be restored.
g. Uncontrolled pollution, primarily from land-based sources, is proving to be ruinous to the eco-system surrounding the Karachi coastal area, adversely impacting its bio-diversity.
h. The sustainability factor in fisheries should never be lost sight of. FAOs Code of Conduct for Responsible Fisheries 1995 provides useful guidelines. Pakistan’s problems stem from a lack of oversight and enforcement. Excessive pollution, deforestation of mangroves, extensive use of illegal fishing nets and practices, all play havoc with our fragile coastal ecosystem.
j. Pakistan’s coastal belt is a picture of neglect, hardly attractive to investors or tourists. Whatever activities that are on-going or being planned are a bit haphazard, without recourse to an Environmental Impact Assessment or under the umbrella of an Integrated Management Spatial Plan.
k. National Institute of Oceanographic is arguably the only public sector institution engaged in Marine Scientific Research. We have a long way to go before we can understand the nature and quantum of non-living resources lying underneath the seabed of our continental shelf.
And finally, a few suggestions, which if adopted can at the very least point us in the right direction towards effectively tapping our maritime potential:
a. In order to satisfy the need of the private sector, including customers, for a one-window solution and for better field level coordination, it is imperative to set up a National Maritime Authority. The preferable solution would be for this authority to replace the existing Directorate General of Ports and Shipping, a largely ineffectual field extension of the Ministry of Ports & Shipping.
b. For better coordination of maritime aspects which, as mentioned earlier, are interlinked, it may be preferable to enhance the scope of the existing Ministry of Ports and Shipping to make it the Ministry of Maritime Affairs. This proposed Ministry, apart from continuing to handle the portfolios of ports, shipping, navigational safety and fisheries, can be made responsible for coordinating or overseeing all other maritime aspects.
c. The proposed National Maritime Authority should preferably be made responsible to this Ministry but can also be autonomous.
d. The changeover needs to be gradual so as not to upset the apple cart.
e. The keyword is capacity – building, without which the entire exercise is meaningless. The functions of the proposed National Maritime Authority and Ministry of Maritime Affairs can be gradually enhanced in direct proportion to the trained manpower being inducted.
f. A conducive environment should be generated in which any investor, local or foreign, can invest with ease and thrive.
g. Some foreign maritime universities offer courses in Public Administration in various maritime fields. These can initially be availed in order to build a reservoir of maritime expertise, which, in the context of a National Maritime University, can subsequently be utilized to train others in accordance with the functions they are called upon to perform.
h. Pollution at sea needs to be curbed at all costs; there are no two ways about it. This responsibility at the moment falls on the shoulders of the provincial Environmental Protection Agency which seemingly is not too distressed about what happens in the sea. Once the proposed Ministry of Maritime Affairs and the National Maritime Authority emerge from the shadows as major stakeholders of the maritime scene, they may be in a position to exert the much-needed pressure on the provincial Environmental Protection Agency.
i. Coastal Development and coastal tourism are now provincial subjects and since the Govts of Sindh and Balochistan independently handle their sections of the coast, a lack of cooperation prevents seamless integration. Moreover, for the past two decades at least, emphasis is being globally laid on the accepted concept and principles of Integrated Coastal Zone Management, (ICZM). The existing void of Integrated Management Spatial Planning (IMSP) and monitoring can be filled by the proposed National Maritime Authority which can also act as the Integrated Coastal Zone Management Authority. I can sense a query here: why should the coastal zone be treated so differently from the other zones? In a global context, coastal margins provide 25% of productivity while its surface area equates to only 8%. More importantly, a wide range of human activities take place here; rifts can arise which, if left unresolved, lead to a rapid degradation of the zone’s rich and vital ecosystems and habitats. While foreign tourists can be attracted by developing exclusive and secluded resorts, much like the Maldives or Bali, domestic sea-based tourism is in itself a lucrative sector to tap.
j. Marine Scientific Research should be undertaken in earnest, so that the country is ready to exploit the abundant mineral and gas hydrates resources of the seabed whenever it becomes technologically and economically feasible to do so.
So, to recap what we have covered, the size and significance of the maritime sector has been explained through a sequence of linkages, the gap between what is and what could be has been illustrated through a comparative study, our inherent systemic flaws outlined and some suggestions for improvement offered. If we can but imagine the size of the maritime pie, the large slice we can have of it, and learn to recognize and remedy our inherent flaws, we can perhaps start taking the first tottering steps towards realizing our maritime potential. Just imagine too the quality of life we would have in our coastal belt if the development of our pristine coast is planned and managed in accordance with a sound Integrated Coastal Zone Management plan; if tens of thousands of our citizens earn their livelihood respectably through the safe and environmentally sound recycling of ships, through sustainable fisheries, through ship-building and repairs, though harnessing the power of the oceans and exploiting its non-living resources, through sailing the world’s oceans as seafarers and employed in various trades associated with a robust coastal tourism industry. That day can come soon, as soon as the multi-billion dollar importance of the maritime sector dawns upon us.
Note: This is the text of a talk delivered at the International Maritime Symposium on ‘Maritime Potential of Pakistan and Security of the Maritime Domain’ held on 14-15 May 2014 at the Pakistan Navy War College, Lahore. It was also subsequently published as a two- part article in the June and July/August editions of the ‘ Navy News’.