Blue Economy’s Role in Economic Development

By Dr. R. Kannan November 15, 2019

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The blue economy is the, sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem. It is a Concept which encourages better management of our ocean and blue resources. Blue economy also includes benefits, such as carbon storage, coastal protection, cultural values and biodiversity.

The concept of Blue Economy covers, Port development, Port based Industrial Development, City development, Cluster development, Fisheries, Education and Research, Shipping, Oil and Gas Extraction, Aquaculture, Coastal Development, Tourism, Marine bio tech, Renewable energy, waste disposal, environment protection and maritime security, Ship building , Ship breaking and Ship repairing.

Blue Economy plays a major role in economic development of a country. When we discuss the development of blue Economy, it becomes very relevant in the Indian Context. Prime Minister set a vision of achieving $ 5 trillion GDP within a short period of time. Blue Economy can contribute to $ 1 trillion of GDP. We can have Blue Economy Vision of $ 1 trillion. Lot of initiatives are being taken to develop the blue Economy. The focus is on using the water resources for Transportation, Port Based Economy Development, Port based industrial development. The initiatives like Sagar Mala are part of the overall development of blue Economy.

The logistics cost in India is more than 14% of the GDP and it is one of the highest in the world. The government has set an objective to bring this down to less than 10%. With this in view, the inland waterways will be developed across the country for the transportation and 20,000 KMs are likely to be developed and already few National waterways were opened for transportation of cargo. The focus of Inland waterways will be transport of bulk items like Steel, Coal, cement, Iron ore, and Agricultural commodities.

The Sagarmala Programme covers investment of ₹8.5 trillion to set up new mega ports, modernizing India's existing ports, developing of 14 Coastal Economic Zones (CEZs) and Coastal Employment Units, enhancing port connectivity via road, rail, multi-modal logistics parks, pipelines & waterways and promoting coastal community development, with the aim of boosting merchandise exports by US$110 billion and generating around 10,000,000 direct and indirect jobs.

Sagarmala aims to modernize India's Ports so that port-led development can be augmented and coastlines can be developed to contribute to India's growth. It also aims at "transforming the existing Ports into modern world-class Ports and integrate the development of the Ports, the Industrial clusters and hinterland and efficient evacuation systems through road, rail, inland and coastal waterways resulting in Ports becoming the drivers of economic activity in coastal areas.

To increase the pace of growth through Blue Economy, plans could be drawn up to create Ports with city and Industrial development similar to Singapore and four ports in India could be identified to replicate the model and success of Singapore.

One of the challenges for achieving this growth will be arranging finance for such large projects. The options for raising the required financial resources could include, lease of operating Port assets to generate revenue for new projects, issue of Blue Bonds (already issued by Seychelles), attracting FDI from leading players in Blue Economy in the world, issuing special bonds focussed on port based projects apart from the traditional sources of funding.

Considering the new found thrust on this concept, we will have opportunities arising in the developing the areas of Automobiles, Engines, Inland water Transportation Vessels, Renewable energy, Security, Infrastructure Development, River based projects, Water based projects, Lubricants and Marine oil, Banking and Financial Services.

We should use the long coast line and rivers in India to achieve the desired target of $ 1 trillion through and the government initiatives in place will go a long way in achieving the target and all the stake holders should be geared to achieve this target. The government can create a programme to propagate the vision of $ 1 trillion to all the stake holders which will help to achieve the target very fast.