MARITIME SECTOR A Gateway to Economic Transformation

By optimising the operations of its ports and terminals, Pakistan can position itself as a significant source of sustainable foreign exchange, propelling its economy into a new era of prosperity.

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By Ghulam Haider

Published: Mon 14 Aug 2023, 11:08 AM

Last updated: Mon 14 Aug 2023, 11:11 AM

Pakistan’s maritime sector is a cornerstone of its economic landscape, holding immense potential due to the country’s strategic location along the Arabian Sea. With a coastline stretching over 1,046 kilometers, Pakistan possesses a valuable maritime resource that has the capacity to drive trade, enhance connectivity, and bolster economic growth.

Pakistan stands at the precipice of harnessing its maritime potential to fuel a robust economy. Pakistan’s annual revenue from the blue economy is $450 million while the actual potential of Pakistan’s blue economy is more than $100 billion. The exclusive geostrategic position of Pakistan lends its ports a unique significance concerning maritime trade.

By optimising the operations of its ports and terminals, Pakistan can position itself as a significant source of sustainable foreign exchange, propelling its economy into a new era of prosperity.

The transformation of this sector carries the promise of generating substantial foreign exchange earnings, dwarfing the current modest figures of a few hundred million dollars. This surge in foreign exchange would not only alleviate the perennial balance of payments crises that have frequently plunged Pakistan into financial turmoil but also stimulate economic growth.

Moreover, Pakistan’s strategic coastal location serves as an export hub not only for its own products but also for landlocked Central Asian nations, opening up trade routes to the Middle East, Europe, South Asia, and Africa.

Presently, Pakistan operates eight key ports, with Karachi Port, Port Qasim, and Gwadar Port emerging as the most pivotal. Gwadar Port, in particular, gained prominence through its refurbishment as part of China’s Belt and Road Initiative (BRI), specifically the China-Pakistan Economic Corridor (CPEC). As the sole deep-sea port in the region, Gwadar has the capacity to accommodate mega-ships, positioning Pakistan as a formidable maritime player.

In today’s globalised landscape, trade occurs at an unprecedented pace, underscoring the importance of maritime commerce. Efficient ports and terminals are the backbone of exports and supply chain extensions, a fact exemplified by UAE’s DP World (DPW).

Renowned for its seamless, end-to-end export logistics, DPW’s success has resonated globally, driving efficiency, transparency, and value for clients and shareholders alike. By optimising container movements, documentation, and approvals, DPW’s streamlined approach minimizes intermediate steps and accelerates operations.

Privatization emerges as a key strategy for Pakistan’s maritime sector. Given its lack of expertise, resources, and capital in this domain, collaborating with DPW offers a prudent solution.

By entrusting DPW with operations, Pakistan is set to fast-track progress without upfront investment. This blueprint not only positions maritime trade as a formidable foreign exchange source but also generates jobs for the country’s educated youth, fostering political stability, prosperity, and economic growth.

As Pakistan’s government continues to prioritise maritime development, the sector’s role in bolstering the economy, creating employment, and fostering regional partnerships becomes increasingly pronounced.

The recent agreement between the Karachi Port and the Abu Dhabi Port of the UAE marks a pivotal moment in Pakistan’s maritime landscape.

The deal between the Karachi Port and the Abu Dhabi Port has garnered attention for its potential to reshape Pakistan’s maritime sector. The agreement entails the establishment of a joint business council to enhance cooperation and facilitate trade between the two ports. This move aligns with Pakistan’s vision of transforming its ports into economic hubs that boost trade, investment, and regional connectivity.

IMF data for 2021 revealed Pakistan’s maritime trade at $163 million, notably dwarfed by the billions generated by neighbouring Bangladesh and India. According to the World Bank, maritime channels facilitate nearly 90 per cent of the world’s trade. This trend will persist as technology and investments gravitate towards cost-effective hubs boasting skilled workforces and advanced infrastructure. In this context, Pakistan’s scores in the Liner Shipping Connectivity Index (LSCI) and containerised trade are promising, underscoring its competitiveness on the global stage.

Gwadar Port emerges as a strategic node for trans-loading congested regional ports’ goods. Its tax-free status and cutting-edge cargo handling and industrial zones further enhance its appeal. Simultaneously, upgrading Karachi Port and Port Qasim would mirror Gwadar’s success, collectively positioning Pakistan to generate billions in foreign exchange, facilitating rapid debt repayment.

The success story of Singapore, where the maritime sector contributes 8-10 per cent of GDP, serves as a potent reminder of this potential. Pakistan, with three major ports, boasts even greater prospects due to its strategic location and unique advantages. Leveraging this advantage, Pakistan can not only reshape its own economy but also inspire other debt-ridden nations to break free from financial constraints.

In essence, Pakistan’s maritime sector holds the key to a prosperous future. By capitalizing on its coastline and aligning with global industry leaders like DPW, Pakistan can rise as an economic powerhouse. This transformation will ripple across local, provincial, and national economies, lifting millions out of poverty, enhancing lifestyles, and catalyzing industrial growth. As a beacon of hope for landlocked Central Asian countries, Pakistan can lay the foundation for a new era of economic progress, ushering in a future that is both prosperous and self-reliant.

With strategic planning, technological innovation, and effective policies, Pakistan’s maritime sector can sail toward a prosperous future, contributing significantly to the nation’s economic growth and regional connectivity.

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