Thursday, September 17, 2015

“I see the blue chakra in our national flag as a symbol of the blue revolution. Our destinies are linked by the currents of the Indian Ocean,” Prime Minister Narendra Modi told the national assembly of Mauritius this year.

What is this Blue Economy ?
  • Gunter Pauli’s book, “The Blue Economy: 10 years, 100 innovations, 100 million jobs” (2010) brought the Blue Economy concept into prominence. 

  • The Blue Economy is envisaged as the integration of Ocean Economy development with the principles of social inclusion, environmental sustainability and innovative, dynamic business models. 
  • It is founded upon a systems approach, wherein renewable and organic inputs are fed into sustainably designed systems to fuel “blue growth”. 
  • Such “blue growth” addresses the problems of resource scarcity and waste disposal, while delivering sustainable development that enhances human welfare in a holistic manner.
"Blue Economy” has emerged as a term referring to a healthy ocean, supporting higher productivity
  • The current focus is confined to marine products, including minerals, as if this is all it concerns. The concept of blue economy is much broader and encompasses even maritime activities, such as shipping services.

Roadmap for India !!

## Foreign Policy 

‘Blue economy’, an idea is already in operation in China. 
  • This is where India, with its unending coastline and EEZ can team successfully with Seychelles and Mauritius (as efforts in this regard have started), even Mozambique and Tanzania for ‘blue development’
  • That is, sustainable harvesting of ocean wealth, tourism, biotechnology etc. from Lakshadweep’s 36 islands to Seychelles and Mozambique in a way that promotes mass employment in zero carbon sectors. India hasn’t yet focused on the blue economy, but this should be the future.
  • Development of the marine economy on the western seaboard not only links India’s economy to other oceanic economies, it has big security implications. After 26/11, naval authorities have accounted for fishermen and fishing villages on the western seaboard. More tourism, more economic activity adds to security.
  • India needs to build a blue economy plan with Sri Lanka – the present Indian approach of bottom trawling fishermen is unsustainable both from the environment and foreign policy points of view. Investment and corporate interest will inevitably follow, because security and finance are generally close bedfellows.
  • If the first phase of the Indian Ocean policy was the outreach to Australia and Japan, and the second phase was that of Mauritius,Seychelles and Srilanka and later Bangladesh; the third phase should involve another maritime friend – Oman

A long-standing maritime power (remember Oman used to own Zanzibar), Indian Ocean outreach will need this relationship. Oman is the only country with whom India conducts tri-service exercises. While using Salalah port, India should look more closely at making a place for itself in Oman’s new port of Duqm. Its location close to Gwadar makes it attractive to India. Let’s not wake up after the US and other powers have carved it out for themselves. For strategic interests and economic interests it’s an opportunity not to be missed.


## Indian Ocean Rim Association

At kissing distance from the Indian shoreline, 21 diverse economies inked a pact earlier this month to promote the ‘Blue Economy’ to strengthen ties. With global growth slowing down, these countries realise the importance of the Indian Ocean for their well-being and want to grab opportunities for higher growth.

Mauritius hosts the Indian Ocean Rim Association (IORA), whose members include G20 nations such as India, Australia and Indonesia, as well as small island countries. It is one grouping where India is a member and China is an observer, at a time when China is making strenous efforts to spread its regional influence.

It targets four sectors: 
  • fisheries and aqua culture to fight poverty; 
  • renewable ocean energy to reduce the stress on fossil fuels; 
  • seaport and shipping to promote trade and investment; 
  • offshore hydrocarbons and seabed minerals to attract foreign investment. 
(Tourism was a surprising omission, and climate change, from concerns.)

The timing of the declaration is significant. The global economic environment is uncertain due to China’s economy facing trouble. There is a growing perception now that the ocean is the last frontier for economic development.


What must India do in IORA ?
  • As a founder member of the IORA set up in 1997, India should step up its multilateral engagement. Former Prime Minister IK Gujral had pronounced IORA as one more dimension of South-South cooperation. A Chatham House report on India’s engagement with the African IORA states in 2008 concluded that it was simply not about commercial links, but also underpinned India’s maritime doctrine.
  • Countries such as South Africa and Kenya want India to support scientific research in a big way. India has the IT prowess for big data mining. It should leverage this opportunity.
  • Maritime security remains a major threat to this region. We have had to deal with the persistent scourge of piracy off the coast of Somalia and the challenges it posed to private sector development, regional and international trade, economic integration and development. India helped, and the IORA also gained stature.This trend must continue and must improve. IORA members should address security issues themselves rather than relying on international forces (something like taking help from China is undesirable from India point of view).
  • Conduct MILAN regularly at Port Blair.

## Offshore transloading infrastructure

  • By definition, blue economy infrastructure is environment-friendly because larger cargo consignments can move directly from the mothership to the hinterland through inland waterways, obviating the need for trucks or railways. This agenda includes the creation of environment-friendly infrastructure in the ocean. When land acquisition is such a contentious issue, shifting some infrastructure to the seas is a good economic and political strategy. It can be done in India.

  • Success Story ??? ----->>>Conforming to this spirit, an offshore infrastructure (by creating an ocean-based transshipment mechanism) project was successfully launched by the ministry of shipping last year for transporting imported coal to the thermal power station at Farakka in West Bengal. Such transshipment, out on the high seas yet within India’s economic zone at the Sandheads in the Bay of Bengal, worked out to be financially viable and environmentally friendlier, compared to traditional handling of cargo at ports.

  • Geographical Advantage --- >> As ship sizes become bigger, transshipment/ lighterage operations on the high seas are becoming more viable. What makes it especially attractive, and therefore possible, in Indian waters is the vast coastline of almost 7,500 kilometres, with no immediate coastal neighbours except for some stretches around the southern tip. This is not possible, for example, in the Persian Gulf region because of the proximity to trade routes and contiguous countries. The Strait of Hormuz has several overlapping maritime jurisdictions. In some sense, India has the advantage of a latecomer, helped by natural geography. 
  • Bottleneck ? ---->> 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.
  • Potential Benefits --->>
1.      All ports do not need expensive dredging of long approach channels. 
2.      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, or for creating port reception infrastructure for large ships. 
3.      As larger surpluses are generated, some parts can be utilised for better and more environment-friendly “smart ports”.
4.      Less physical congestion unclogs bottlenecks at ports. This has several advantages. 
  • Faster clearances mean less waiting time and savings on demurrage. 
  • 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.
  • A major network of inland waterways has historically developed on the east coast. On the west coast, it exists only in Goa and Kerala. The eastern waterways can be easily connected to ports for transshipment traffic. The Ganga, Brahmani, Godavari and the Mahanadi basin systems have dormant waterways, but they all lie on the east coast. The proposed project to rejuvenate them will bring cargo to their mouths.
  • While relieving infrastructure shortages and pressure on an overburdened rail and road network, this will also bring immense benefits by reducing costs, delays and pollution. A transloading zone is a green concept, rarely recognised by stakeholders, including the government.

## Blue Economy – Legal Dimensions
§  It is the version 2.0 of the Green Economy.
§  National Policy on Blue Economy must be clear.

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