Glob­al­iza­tion and sea-based trans­porta­tion

The Financial Daily - - NATIONAL -

Syed Ghu­lam Raza

Over the last few decades the glob­al­iza­tion has con­nected na­tions around the globe to an ex­tent that all find them­selves in­ter­de­pen­dent in one way or the other. Due to tech­no­log­i­cal, eco­nomic and so­cio-cul­tural forces, hardly any coun­try can keep it­self iso­lated from the ac­tiv­i­ties of other coun­tries. Com­mu­ni­ca­tion and trans­porta­tion means have be­come key driv­ers of glob­al­iza­tion which has im­pacted nearly ev­ery as­pect of mod­ern day life.

Glob­al­iza­tion is mo­ti­vated by the recog­ni­tion that re­sources and goods are not al­ways co-lo­cated with the pop­u­la­tions that de­sire them thus the global trade of goods is in­evitable to meet the needs of masses around the globe. Global trade is be­ing car­ried out through var­i­ous forms of freight trans­porta­tion sys­tems which in­clude ocean routes, in­land wa­ter­ways, rail­ways, roads, and air freight. The sea based trans­porta­tion, be­ing the cheap­est mode and ca­pa­ble of car­ry­ing heavy loads, has se­cured a piv­otal role in in­ter­na­tional trade and global econ­omy. Mar­itime trans­port sys­tem has be­come the back­bone for global trade and helps to en­sure that the ben­e­fits of trade and com­merce are more evenly spread around the planet earth.

Mar­itime trans­porta­tion sys­tem is the net­work of spe­cial­ized ves­sels (pas­sen­ger ships, dry cargo, tankers, dry bulk car­ri­ers, spe­cial pur­pose ves­sels, off- shore ves­sels etc.), the ports with cargo han­dling fa­cil­i­ties, and trans­porta­tion in­fras­truc­ture. For many com­modi­ties and trade routes, there is no di­rect sub­sti­tute for seaborne com­merce. United Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNCTAD) Re­view of Mar­itime Trans­ports 2017, sug­gests that over 80 per cent of global trade by vol­ume and more than 70 per cent of its value is be­ing car­ried through mar­itime trans­porta­tion.

Mar­itime trans­porta­tion not only en­ables the im­port and ex­port of goods on the scale nec­es­sary to ful­fill the needs of mod­ern world but also con­nects ge­o­graph­i­cally dis­con­nected con­ti­nents and re­gions around the planet. With the grow­ing ef­fi­ciency of ship­ping and in­creased eco­nomic in­ter­de­pen­dence, the prospects of in­dus­try's growth con­tinue to be strong. UNCTAD sec­re­tar­iat cal­cu­la­tions based on Clark­sons Re­search, 2017a re­veal con­tin­ues growth in global mar­itime trade from 2000 to 2017.

UNCTAD 2017 fur­ther re­veals that in to­tal, the world com­mer­cial fleet on 1 Jan­uary 2017 con­sisted of 93,161 ves­sels, with a com­bined tonnage of 1.86 bil­lion. This fleet is reg­is­tered in more than 150 na­tions and is manned by more than a mil­lion seafarers of al­most ev­ery na­tion­al­ity. An in­cred­i­ble fact about ships which make up this global fleet is that a sin­gle ship can carry load equal to thou­sands of trucks on road car­ry­ing nec­es­sary goods. Cou­pled with this mod­ern cruise ships are also sig­nif­i­cant ad­di­tion to global mar­itime trans­port net­work which are ca­pa­ble of car­ry­ing thou­sands pas­sen­gers with all ameni­ties of en­ter­tain­ment and com­fort.

Given the in­creased de­mand of en­ergy re­sources and vol­ume of in­ter­na­tional trade, the mar­itime trans­porta­tion has be­come in­creas­ingly im­por­tant for the global eco­nomic af­fairs. The trade lib­er­al­iza­tion and ad­vent of new trade cor­ri­dors have drawn new av­enues for the growth of global trade where trans­porta­tion of com­modi­ties like crude oil, ed­i­bles, raw ma­te­ri­als and fin­ished goods around the planet will ex­pand the hori­zon of ship­ping in­dus­try. China's Belt and Road Ini­tia­tive (BRI) is the net­work of cor­ri­dors which will have a great im­pact on global trade and econ­omy.

This ven­ture has two ma­jor com­po­nents: one, over­land known as the Silk Road Eco­nomic Belt (Road), while the other, the mar­itime com­po­nent, is termed as the Mar­itime Silk Road (Belt). The mar­itime com­po­nent of BRI will have sig­nif­i­cant ef­fect on ship­ping and trade dur­ing the con­struc­tion phase. Once this ven­ture is op­er­a­tional, it will have a tremen­dous im­pact on the over­all growth of in­ter­na­tional mar­itime sec­tor in the years to come.

The in­vest­ments in ports de­vel­op­ment along the Belt will boost con­tainer­ized trade and broaden the com­merce net­work. The trans­port in­fras­truc­ture, when es­tab­lished, is ex­pected to ac­cel­er­ate the global eco­nomic growth. It will at­tract more in­vest­ment and cre­ate de­mand for other in­dus­trial in­fras­truc­ture, which will likely be trans­ported through seas.

Pak­istan, blessed with a long coast­line and abun­dant ma­rine re­sources, has the po­ten­tial to be­come an im­por­tant mar­itime na­tion of In­dian Ocean Re­gion (IOR). China-Pak­istan Eco­nomic Cor­ri­dor (CPEC), the flag­ship project of BRI, is an im­por­tant un­der­tak­ing hav­ing po­ten­tial to trans­form Pak­istan from a mere coastal state to a mar­itime na­tion. CPEC, link­ing Gwadar Port to the Chi­nese prov­ince of Xin­jiang, is part of BRI plan to ex­pand its trade across cen­tral and South Asia. CPEC will also pro­vide safe and short trad­ing route for Chi­nese ex­ports to Africa, Mid­dle East and Europe.

CPEC will be a game changer not only for Pak­istan but also for the global trade. It will give China eas­ier ac­cess to the Mid­dle East­ern oil via the deep wa­ter port of Gwadar. About 60 per cent of oil is be­ing im­ported from Gulf coun­tries that reach China af­ter cov­er­ing the dis­tance of 16,000 KMs, and Gwadar port will re­duce this jour­ney to 2500 KMs only. This route will cut down trans­porta­tion time and cost which will have di­rect im­pact on the pro­duc­tiv­ity and vol­ume of trade through Gwadar Port. The in­creased in­flux of mar­itime traf­fic at Gwadar port will in­vig­o­rate Pak­istan's mar­itime sec­tor.

CPEC's mar­itime part has at­tracted the re­gional and ex­tra-re­gional states to be part­ners of this project which en­vis­ages that Pak­istan will be ex­pe­ri­enc­ing an un­prece­dented mar­itime ac­tiv­ity along its coast. It is ex­pected that the tran­sit of re­gional mar­itime trade through Pak­istan will also en­hance the trad­ing ac­tiv­i­ties at Karachi Port and, Port Qasim which may turn into an op­por­tune time for the growth of Pak­istan's ship­ping in­dus­try as well.

In the wake of glob­al­iza­tion and evolv­ing trends in sea-based trans­porta­tion, trade ac­tiv­i­ties through Pak­istan's con­ti­nen­tal wa­ters would not only put na­tional econ­omy on a strong foot­ing but also en­hance the role of Pak­istan in re­gional mar­itime arena. These op­por­tu­ni­ties em­a­nat­ing from CPEC can only be vi­able if pro­vided with proper man­age­ment, plan­ning and se­cu­rity cover in all forms. .

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