Blue Economy

Why in News?

Recently PM said Blue Economy is going to be an important source of Aatamnirbhar Bharat & Development of the coastal areas and welfare of hardworking fishermen is one of the important priorities of the Government.

What is Blue economy?

• Gunter Pauli’s book, “The Blue Economy: 10 years, 100 innovations, 100 million jobs” (2010) brought the Blue Economy concept into prominence
• According to the World Bank, the blue economy is the “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem.”
• This is envisaged as the integration of Ocean Economy development with the principles of social inclusion, environmental sustainability and innovative, dynamic business models
• It encompasses–
  • Renewable Energy: Sustainable marine energy can play a vital role in social and economic development.
  • Fisheries: Sustainable fisheries can generate more revenue, more fish and help restore fish stocks.

• Maritime Transport: Over 80% of international goods traded are transported by sea.
• Tourism: Ocean and coastal tourism can bring jobs and economic growth.
• Climate Change: Oceans are an important carbon sink (blue carbon) and help mitigate climate change.
• Waste Management: Better waste management on land can help oceans recover.
• This is reflected in Sustainable Development Goal (SDG 14), which calls to conserve and sustainably use the oceans, seas and marine resources for sustainable development.

Why we need Blue Economy concept?

• The development of the Blue Economy can play a critical role in nation building.
• At least 3-5% of global GDP is derived from oceans.
• It would enhance the GDP, not just by exploitation of under-water resources but by developing it as a platform for infrastructure expansion into the ocean, especially when there is a shortage of space on land.
• The idea is to expand port activities on the sea rather than on land.
• There is possible re-calibration of its growth potential, first, by improving the measurement of its contribution to the economy and then through strategic policy interventions to enhance its contribution to manufacturing and services.
• A time-bound action plan can be set using the SMART (Specific, Measurable, Achievable, Realistic, Time-tested) formula.
• A graded policy intervention will be the first part of implementation.
• For the success of the idea, a dedicated national-level institution, skilled in such state-of-the-art analytical approaches, will have to be given this responsibility.
• It is the next sunrise sector.

Blue Economy for India

• Vast coastline of almost 7,500 kilometres, with an Exclusive Economic Zone (EEZ) of 2.02 mn. sq.km, with no immediate coastal neighbours except for some stretches around the southern tip
• Indian Ocean is a major conduit of trade with as much as 80% of global oil trade happening through it.
• Better connectivity in the region will significantly cut the transport cost and maritime wastage of resources making the trade sustainable and cost effective.
• This is not possible, for instance, in the Persian Gulf region because of the proximity to trade routes and contiguous countries
• In some sense, India has the advantage of a latecomer, helped by natural geography
• For an offshore transloading zone, the availability of calm waters during the monsoons is a problem
• But this can be overcome by conducting such operations closer to the coast and seasonally, in calmer waters
• Marine services sector could serve as the backbone of its blue economy and help India become 10 trillion dollar economy by 2022.

“Ocean potential needs to be harnessed in a balanced manner, where the preservation and health of Oceans are given their due importance, along with adherence to the United Nation’s Sustainable Development Goal 14 that states “Conserve and sustainably use the oceans, seas and marine resources for sustainable development.”

What are some developments initiated by India?

• The Sagarmala project is the strategic initiative for port-led development through the extensive use of IT enabled services for modernization of ports.

Sagarmala Project

• Project aims at developing Inland waterways and coastal shipping which will revolutionize maritime logistics, creating million new jobs, reduce logistics costs etc.
• It focuses on the development of coastal communities and people in the sustainable use of ocean resources, modern fishing techniques and coastal tourism.

• India has an umbrella scheme by the name of O-SMART which aims at regulated use of oceans, marine resources for sustainable development.
• Integrated Coastal Zone Management focuses on conservation of coastal and marine resources, and improving livelihood opportunities for coastal communities etc.
• Development of Coastal Economic Zones (CEZ) under Sagarmala would become a microcosm of the blue economy, wherein industries and townships that depend on the sea will contribute to global trade.
• India has a National Fisheries policy for promoting ‘Blue Growth Initiative’ which focus on sustainable utilization of fisheries wealth from the marine and other aquatic resources.

What are the potential efficiencies from blue economy infrastructure?

• Ports can multiply operations because each cargo shipment is of small parcel size, with no extra capital expenditure for dredging or for large berths and associated equipment
• As larger surpluses are generated, some parts can be utilised for better and more environment-friendly “smart ports” Less physical congestion unclogs bottlenecks at ports
• Faster clearances mean less waiting time and savings on demurrage, so a shorter waiting time for ships also helps the environment by reducing fuel burn
• As transloading takes place on the high seas, it creates an opportunity to spread the cargo across more ports
• It makes ample sense to create a well-distributed network for handling bulk cargo along the entire coastline
• If we introduce “smartness” to transloading zones, we can add value and reduce transaction costs

How does maritime diplomacy set rules in Indian ocean?

• Maritime diplomacy had its heyday back in the 1980s, with the sensational discovery of manganese nodules and cobalt crusts on the ocean floor
• The euphoria over marine mining led to the establishment of the International Seabed Authority <An intergovernmental body based in Kingston, Jamaica, was established to organize, regulate and control all mineral-related activities in the international seabed area>
• The UNCLOS, the “constitution of the seas”, which came into force in 1994, became the basis for the legal rights for mining in the open sea
• The interest in seabed mining flagged because of escalating costs, but it’s being revived on account of the demand for minerals and metals in industrial development, particularly in China, Japan and India
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Why are regional organisations considered as most active players?

• The importance of regional organisations has increased in the context of the blue economy as PM Modi spoke to the SAARC leaders
• In September 2015, the Indian Ocean Rim Association (IORA) hosted the first Ministerial Blue Economy Conference and identified priorities
• Goal 14 of the UN’s Sustainable Development Goals (SDGs) — “Conserve and sustainably use the oceans, seas and marine resources for sustainable development”
• This makes detailed references to the reduction of marine pollution, conservation of coastal and marine areas and regulated fish harvest

The Indian Ocean Rim Association (IORA) is a dynamic inter-governmental organisation aimed at strengthening regional cooperation and sustainable development within the Indian Ocean region through its 23 Member States and 9 Dialogue Partners.

IORA’s apex body is the Council of Foreign Ministers (COM) which meets annually.The United Arab Emirates (UAE) assumed the role of Chair since November 2019 – November 2021, followed by the People’s Republic of Bangladesh. A committee of Senior Officials (CSO) meets twice a year to progress IORA’s agenda and consider recommendations by Working Groups and forums of officials, business and academics to implement policies and projects to improve the lives of people within the Indian Ocean Member States.

Why is blue economy significant for India?

• The new focus on the Asia-Pacific highlights the security and economic dimensions
• The US rebalancing of forces and counter-measures by China have created a new cold war
• New partnerships are in the making in the Asia-Pacific, seeking Indian participation by competing powers
• The blue waters of the Indian Ocean have become a new theatre of tension

Scopes of growth and development

• The sub-sectors includes blue trade in both goods and services, including the development of marine services (such as port services, ship repair, maritime finance and insurance, marine ICT and digitisation)
• Blue investment (port and transloading in mid-seas, coastal-to-hinterland connectivity)
• Blue SMEs — a sub-category of the SMEs as defined by the Ministry of Small and Medium Enterprises (MSME)
• Blue manufacturing (development of dedicated industrial parks, as is being envisaged under the Sagarmala, protection risks of coastal natural calamities, etc.)
• Some time-tested paradigms of PPPs (Public Private Partnerships) will be ideal for the growth and development of the sector.
• A mechanism to coordinate the efforts of the coastal districts/municipalities/panchayats, coastal state governments, and the Union government will need to be established.

Environmental Concerns

• Ballast water: Cruise ships, large tankers, and bulk cargo carriers use a huge amount of ballast water, which is often taken on in the coastal waters in one region after ships discharge wastewater or unload cargo, and discharged at the next port of call, wherever more cargo is loaded. Ballast water discharge typically contains a variety of biological materials, including plants, animals, viruses, and bacteria. These materials often include non-native, nuisance, invasive, exotic species that can cause extensive ecological and economic damage to aquatic ecosystems along with serious human health problems.
• Wildlife collisions: Marine mammals, such as whales and manatees, risk being struck by ships, causing injury and death.
• Oil spills: While less frequent than the pollution that occurs from daily operations, oil spills have devastating effects. While being toxic to marine life, polycyclic aromatic hydrocarbons (PAHs), the components in crude oil, are very difficult to clean up, and last for years in the sediment and marine environment.
• Solid Waste: Solid waste generated on a ship includes glass, paper, cardboard, aluminium and steel cans, and plastics. It can be either non-hazardous or hazardous in nature. Solid waste that enters the ocean may become marine debris, and can then pose a threat to marine organisms, humans, coastal communities, and industries that utilize marine waters.

Lessons from Other Countries growing via Blue Economy

• The strategies of Australia, China, and Mauritius, for example, view the potential of sustainable ocean economy in meeting their countries’ development objectives.
• In Australia, offshore oil and gas and aquaculture industry have dominated the blue economy
• In Mauritius, meanwhile, coastal tourism and seaport-related activities contribute the largest share
• For China, fisheries, tourism, and transport lead its marine economy
• Future plans and policies of these countries have laid additional emphasis on innovation, marine research and development, and marine information and communication technologies (ICT).
• For India, the marine services sector could be the backbone of its blue economy. In line with the ‘Digital India’ and ‘Make in India’ initiatives
• India must focus on marine ICTs, and transport (shipping) and communication services, and the creation of a knowledge hub for marine research and development, alongside the more traditional sectors like fisheries and coastal tourism.

Way forward

• Regional focus has turned towards the Indian Ocean as the new frontier for sustainable economic development, alongside concerns of security issues.
• India should build on the momentum it has created thus far and take on a larger responsibility in developing and securing the Indian Ocean by developing ideas, norms and road maps for an inclusive and collaborative ocean governance society.
• Developing a normative framework for doing business and harnessing the ocean’s potential in a sustainable manner is another area where India could demonstrate leadership.
• India should start by creating robust mechanisms for knowledge creation. For instance, diverse platforms for interaction between sect oral experts, professionals, scientists, and the business community could be envisaged.
• The existing and new multilateral trading agreements should also be modified and defined in a way that enables the creation of sustainable infrastructure to meet the demands of future economic activities.