In Focus

Geoeconomic Dimensions of IOR and Pakistan’s Maritime Economy

Maritime policy of Pakistan is a paradigm in development which aims to achieve the geostrategic, geoeconomic and geopolitical goals, through becoming a part of the maritime network with regional and global allies in the Indian Ocean Region, increasing maritime trade, and developing the fishery and tourism sector.

Indian Ocean has been a center of commercial activity and a medium of connectivity between its littorals for long. Historically speaking, small fishing towns all along the coasts of Indian Ocean Region (IOR) have been transformed into big cities and trading hubs just because of interdependence and mutual trade. Africa's east coast, a primarily agricultural-based society, and fishing villages have been trading partners with the eastern economies of Far East and Indian subcontinent. These coastal towns were linked to the inland kingdoms and states, which too relied upon the maritime trade for their imports and exports. African ivory trade, gold and iron were transported by sea to the Far East and India. Similarly, India and Far East states including China had trade links with Africa and Europe through the Indian Ocean. The monsoon phenomenon, also known as trade winds, have also been a crucial factor in aiding shipping and bringing much-needed rains for sustenance of life on the mainland of the sub-continent.
IOR provides connectivity to Asian, African and Australian continents and three great oceans namely the Pacific, Atlantic and Southern Ocean. Its 36 littoral states and additional 15 hinterland states, whose economies are also connected to maritime trade of Indian Ocean, houses around 3.7 billion population. Indian Ocean has seven major choke points, i.e., the Mozambique Channel, Bab-al-Mandeb, Suez Canal, Strait of Hormuz, Malacca Strait, Sunda Strait and Lombok Strait.

Maritime security and stability of IOR remains high on the agenda of global powers. It is so because increase in maritime trade brings challenges, both in traditional and non- traditional security domains.

The IOR, spread over an area of 73,556,000 sq kms, got more significance in the late 90s, because of the huge economic growth resulting in oil demand in both developed and developing countries. These reserves are primarily present in the Middle East and cater for about 40% (19 million barrels/day) of total global energy demands.
It is one of the busiest and most important oceans for the sustenance of global economy. Around 100,000 ships pass annually through the vital sea lanes and choke points of IOR. Around 17 million barrels of oil, to run the Far Eastern economies, passes through Malacca Strait alone. This strait, which is around 550 nautical miles long, manages 200 ships per day and around 90,000 ships annually. Similarly, 21,000 ships pass through Bab-al-Mandeb annually. On average, 57 oil tankers carrying 5.5 million tons oil cargo pass through Bab-al-Mandeb, which is 9% of the global energy trade demand.
Maritime security and stability of IOR remains significant on the agenda of global powers. It is so because an increase in maritime trade brings challenges, both in traditional and non-traditional security domains. This necessitates all the key global as well as regional actors to always maintain their permanent presence in the region to guard their geostrategic and geoeconomic interests.
The presence of global and rising powers in IOR sometimes creates tensions and strategic challenges for dominance. At present, the USA, China, the UK, France, Russia, Italy, Japan, Germany, Israel and India have their permanent setups and are maintaining near continuous presence of ERF (Extra Regional Forces) in the Indian Ocean. Although no nation or state alone can defend and guard its vital maritime interests at high seas thus cooperation and collaboration amongst the friendly countries who have common geostrategic and geoeconomic interests join hands. Quadrilateral Security Dialogue (QUAD), India, Israel, the UAE, and the U.S. (I2U2), Australia–UK–U.S. (AUKUS), logistic base agreements, Belt and Road Initiative (BRI), China-Pakistan Economic Corridor (CPEC), China-Myanmar Economic Corridor (CMEC) etc., are the prime examples of these new trends to dominate seas and oceans. Other regional and global powers have also made bilateral arrangements with IOR littorals to guard their legitimate maritime interests.
The twenty-first century has already seen geoeconomics taking the lead over geostrategy. Pakistan's National Security Policy of 2022 (NSP-22) also focuses and revolves around the national economy. Rather a new term ‘geo-pol-economics’ has been coined to address the challenging geostrategic, geopolitical and geoeconomic environment. It has also been observed that the chokepoint politics and geostrategic competition are on the rise in the light of converging ocean strategies of ‘Peaceful Rise of China’, ‘Look East by India’, U.S.’ ‘Pivot towards Asia’ and ‘Indo Pacific Strategies’. In IOR, it is hoped that the interplay of the USA, India and China and their compulsive interdependence will keep the IOR’s strategic and geoeconomic environment stable and conducive for the global economy to flourish, as any ripple arising out of miscalculation by any state may have global tsunami effects in the geoeconomics domain.

Pakistan's fishery sector can contribute around 1 billion USD annually to the national GDP against the existing USD 450 million. 

In the 21st century, maritime security has been redefined in terms of traditional and non-traditional security. Now, interstate conflicts, piracy, human, narcotics and ammunition smuggling etc., are a part of the traditional threats and being dealt with by security apparatus at both national and international levels of Combined Task Force (CTF150, CTF151 and CTF152). However, non-traditional security challenges include the impact of climate change, rising global temperature, melting of glaciers, rising sea levels, dumping of nuclear waste, restrictions on ship breaking and recycling industry, pollution, impact of technology on the maritime sector, security and management of ocean and seabed resources. But the most important non-traditional security challenge to developing economies is the interference of state and non-state actors including national and international regimes, conventions and laws. Their enactment and application are the new tools of dominance with major powers to control and manage the poor and weak states.
Pakistan's interests in IOR are limited to play an effective role, to ensure maritime security and to guard its legitimate maritime interests with active assistance from its global and regional allies. Pakistan's dependence on maritime trade (91% by sea) and 100% imported energy creates critical dependence of its national economy on the maritime sector. Pakistan spends 7-8 billion USD on seaborne freight charges. Moreover, Pakistan’s national flag carrier with 13 ships and lift capacity of 1045000 tons is limited to 11% of the total trade volume. Pakistan's fishery sector can contribute around 1 billion USD annually to the national GDP against the existing 450 million USD. Pakistan’s maritime tourism is nonexistent despite good potential which needs to be harnessed. It is thus the need of the hour to understand this critical vulnerability of national security. Our decision-makers must understand the importance of the sea, its linkage to national economy and new and rising challenges in both traditional and non-traditional security domains to guard against any possible challenge.

The writer is associated with the National Institute of Maritime Affairs (NIMA).

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