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Home remittance the flywheel to blue economy

A nationwide campaign of Bahria University to promote Blue Economy

Blue Economy identifies the water bodies as main drivers of the economic progress with great impending for novelty and growth. 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.” European Commission defines it as “All economic activities related to oceans, seas and coasts. It covers a wide range of interlinked established and emerging sectors. “The Commonwealth of Nations considers it an emerging concept which encourages better stewardship of our ocean or ‘blue’ resources.” Conservation International adds that “blue economy also includes economic benefits that may not be marketed, such as carbon storage, coastal protection, cultural values and biodiversity.” The Center for the Blue Economy says “it is now a widely used term around the world with three related but distinct meanings- the overall contribution of the oceans to economies, the need to address the environmental and ecological sustainability of the oceans, and the ocean economy as a growth opportunity for both developed and developing countries” but Blue Economy goes beyond viewing the ocean economy solely as a mechanism for economic growth. It focuses on the sustainability of ocean for economic growth. Therefore, Blue Economy encompasses ecological aspects of the ocean along with economic aspects but when we talk about Blue Growth than the role of home remittance is un-ignorable. In Pakistan along with other private sector banks; National Bank of Pakistan as a representative of public sector bank have largest number of its Remittance Customers with the facility to receive their remittances from a vast network of 1470+ branches across Pakistan. National Bank of Pakistan has remittance partners in every country and territory of the world and facilitates the customers in numerous ways for receiving funds in Pakistan.

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In many countries, remittance constitutes a significant portion of GDP and the top recipients of foreign remittances are India, China and the Philippines. In Pakistan, traditionally, a major chunk of overseas workers remittance comes from KSA, US, UAE, UK and other GCC countries. KSA remains the biggest contributor towards the remittances, but, recent immigration curbs and the ongoing austerity measures have changed the situation in the KSA. This could disrupt the flow of remittances if Saudi economy fails to transform as prescribed under vision 2030. Employment in US has reached a pre-crises level and EU countries are slowly reverting back to normalcy, which could help in keeping the remittances flow steady. Remittances can be crucial but Pakistan will have to improve its dollar-earning capacity. This surge in remittances is mainly attributed to the depreciation in rupee. People are not sure about the future course of the rupee, as the government term is nearing an end. Though, there is a speculation that by June there will be a third round of depreciation. Nothing is clear; people want to take advantage of the current situation which might have led to this hike in remittances. Improvement in exports and remittances is a healthy sign, but besides this, if debt keeps on rising and if Pakistan is unable to increase its exports by enough magnitude to counter the rise of the import bill, then there will be a large liability in terms of dollars.

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Blue economy is not just limited to pacific SIDS, this idea is also spreading in the whole world and 8 coastal stated of South African Development Community (SADC) are interested to manipulate this innovative idea in their country economic strategy. Rio+20 outcomes is one of the greatest effort for the implementation of all obligation for the conservation and restoration of aquatic resources in the framework of post 2015 SDG. Pakistan is an important maritime state in the Indian Ocean naturally endowed with approximately 1,050 km long coastline and the Exclusive Economic Zone covering about 240,000 sq. km. Pakistan may confront a number of challenges while building upon its Blue Economy potential. However, Pakistan should embark upon boosting its economy while focusing on maritime infrastructure, technology for offshore resource development, a strong fisheries and marine leisure sector (tourism), environment issues etc.

 

All the required financial and technological support should be geared up for building, operating, and making economically profitable industries. These are compelling reasons for Pakistan to endorse and internalize the concept of a Blue Economy in policy, bilateral relations as well as international transactions but the fact is that Blue Growth requires funds to be invested either in tourism, fishing, and drilling for minerals and the enormous dimensions of this sector which is to be mutually financed by internal and external (remittances) sources of Pakistanis which impacts positively not only to Pakistan but also to their families by creating Blue Jobs and target poverty specially related to this sector and provides a platform to confront the challenges of CPEC and there is no doubt that remittance inflow will make Pakistan more vulnerable to global and regional economic crises and we have to act like responsible citizens of the country because if the remittances are not channelized through the formal financial system, remittances cause a large amount of money to flow into the country unregulated, untaxed, or unmonitored heads and these informal channels can also be used for money laundering, terrorism, smuggling, and other illegal activities which will harm our country so being the responsible citizen it is our duty to use send these remittances through formal financial sources so that this money is utilized in many sectors including Blue Side to explore this untapped sector of Pakistan and to improve the efficiency and effectiveness of Pakistani ports which also give a flywheel to our exports and supports to enjoy the fruits of CPEC by exploring the emerging markets but policy should be adopted for the sustainable coastal management which is a large segment of the Blue Economy.

Ms. Urooj Aijaz (Faculty Dept of H&SS & Ms. Talia Yasin Student of BS-Economics & Finance; Bahria University Karachi)

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