Pakistan’s External Account Challenges —Enormous Potential of Blue Economy

The launch ceremony of the report entitled ‘Pathways to a sustainable blue economy: role of financial institutions’ organised jointly by the Sustainable Development Policy Institute (SDPI) and the Bank of Punjab (BoP) was held at a hotel in Islamabad.

A round-table discussion was held which was led by Zafar Masud, the president and CEO of BoP, and Dr Abid Qaiyum Suleri, executive director of SDPI.

Zafar Masud 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.

He said that global sustainable bond market is estimated to be around $1 trillion. China and India have taken the lead in terms of issuance of global sustainable bond with over $12 billion raised by each of them hitherto.

In India, the corporate sector raised nearly $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 percent 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.