President highlights enormous potential of Blue Economy

F.P. Report

ISLAMABAD: The launch ceremony of report “Pathways to a Sustainable Blue Economy: Role of Financial Institutions” organized jointly by the Sustainable Development Policy Institute (SDPI) and the Bank of Punjab (BOP) was held at Serena Hotel, Islamabad.

A round-table discussion was held which was led by Mr. Zafar Masud (President & CEO – BOP) and Dr. Abid Qaiyum Suleri (Executive Director – SDPI).

Mr. Zafar Masud (President & CEO – BOP) stated that the enormous potential of the Blue Economy to contribute towards economic growth and improvements in livelihoods has not been fully realized by the policy makers of Pakistan and across the world.

The maritime sector provides significant opportunity to meet the external financing requirement in short to medium term through raising funding through Green and Blue bonds on extremely attractive terms (vis a vis plain vanilla offering of Sukuks and Eurobonds), enhancing fish exports, offering coastal tourism, etc.

Global sustainable bond market is estimated to be around US$ 1 trillion. China and India have taken the lead in terms of issuance of global sustainable bond with over US$ 12 billion raised by each of them hitherto. In India, the corporate sector raised nearly US$ 10 billion through ESG and Green bonds in 2021.

While Pakistan tasted success in its first green bond issuance in 2021, there is a need to develop a larger pipeline by identifying green assets and scaling up capacity to meet the international standards. Climate change and over-exploitation of our blue natural resources are extracting significant costs in terms of loss to marine biodiversity.

He further said that the recent flooding could also be mitigated with proper and focused infrastructure investment in this area. The livelihoods of communities dependent on the blue resources are also being impacted, leading to rising unemployment and poverty. ‘Blue economy contributes 0.45% to GDP which is $ 1 billion” he said, adding that Pakistan’s maritime sector is confronted with governance issues, lack of technology, marine pollution, and destruction of mangroves. He pointed out that $5 billion can be generated annually through coastal and marine tourism.

Dr Abid Qaiyum Suleri (Executive Director – SDPI) said that blue economy has immense untapped potential which requires out-of-box solutions. “Only adding a port without a port city will not add anything substantial to the economy,” he said and suggested that we must focus on rules and policies on trans-shipment and turning our ports into green and completely change the fate of these ports.

He further proposed to develop marine tourism and reduce fossil-fuel based transport through in-land freight by adding sea liners and insurance covers in the sector something India has already achieved.

Kamran Farooq Ansari (Joint Secretary – Ministry of Maritime Affairs) said that post 18th amendment, maritime functions were dispersed to provinces, causing lack of consensus of policies and initiatives. He said the Ministry of Maritime Affairs is proactively devising policies to promote the sector. Emphasizing on amending the mercantile marine policies, he suggested offering incentives and tax exemptions to attract private sector investment in this sector.

Ms Rahat Jabeen, Senior Environmental Specialist of the World Bank said that blue economy roadmap in collaboration with Ministry of Maritime Affairs is in pipeline
Sayem Ali (Divisional Head & Chief Economist – BOP) drew the participants’ attention towards global investment trends, China and India had raised $ 12bn each through issuance of green bonds, mostly through issuance by their respective corporate sector rather than the government. The growing ESG market provides an opportunity for Pakistan and we have tasted success with the issuance of the $ 500mn green bond in 2021.

Dr Vaqar Ahmed (Joint Executive Director – SDPI) suggested developing online tracker of blue investments for both in pipeline and potential investments, which, he maintained, will help identify opportunities as well as challenges posing hurdles in the growth of blue economy.