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With the advent of latest technologies, especially in the means of transport, the maritime connectivity has reached at the new high. Since then the journey to move forward has never stopped for the states due to multiple factors like search of new lands, search of new markets to extend commerce and trade, migrations, or knowledge seeking. In the contemporary era, the sea-borne trade is vital element for supply chain management and plays significant role in sustainability of overall economy. As maritime transportation modes and carriers have been developing, previously lower volumes of trade, and port and shipping business have been revolutionized. The containerization initiated a new chapter in sea-borne trade as it started allowing different goods to be transported more safely in freights or containers of certain dimensions which increased efficiency of the maritime or sea-borne trade and the shipping industry.

Despite the fact that Pakistan was a maritime nation geographically with few historically active ports since centuries, Pakistan did neither do any legislation regarding adjudication of maritime issues and disputes nor did it try to structure a separate policy document for this sector. However a culmination of ordinances, acts, and regulations coming from different departments, especially Pakistan National Shipping Corporation Regulation-1984 had been acting as broader policy guidelines. There is one fully autonomous national shipping company, Pakistan National Shipping Corporation (PNSC) which has 19 subsidiary companies with 11 national flag carriers currently. PNSC, all 3 port authorities, Mercantile Marine Department, fisheries related departments, and other shipping related offices have been working under Ministry of Maritime Affairs since 2017 when the Ministry of Port and Shipping was renamed.

The first formal policy entitled as Pakistan Merchant Marine Policy was promulgated in 2001 which was based on Pakistan National Shipping Corporation Regulations, 1984. In the 2001-policy document, it was suggested that by the end of targeted term, Pakistan flag merchant marine fleet would be expanded to the point where its share of cargo could touch to 40% from 5% of the year 2001, along with increase in dead weight carrying capacity to over one million tonnes to compete in the global market. There were several other significant incentives to offer concessions and tax exemptions and to encourage investment in private shipping companies; and strategic goals which were aimed at bringing revolutionary upgradation to the shipping industry particularly and the Blue Economy generally.

In the year 2001 when the first Merchant Marine Policy was promulgated in Pakistan, the opening sentences of the policy draft were acknowledgement of the shipping industry as potential sector for which the government had decided to "re-structure the maritime sector and provide a viable and investor friendly policy" by emphasizing on "deregulation, simplified procedures, incentives and assurances" to develop an environment which could attract foreigners, overseas Pakistanis and local investors with purpose of reducing dependence on foreign carriers and saving foreign exchange. The targets set were to be achieved by 2020. Since then, the policy was left and there could not be seen any effective implementations except few steps here and there.

In November 2019, there was launched another Merchant Marine Policy, which comprised on some amendments to the 2001 policy. These amendments are reflection of how this important rather “Strategic Industry” as suggested in these amendments, has been put on back burner and nothing significant could be achieved during previous governments. The first amendment which is related with the set target has suggested to extend the time period to achieve previously set goals and objectives along with few more additions would be considered “2030” in lieu of “2020” which gives challenging goals to the current as well as upcoming governments. In Para 4, in Sub-para (iii), clause (a) facilitates new Pakistan Resident Ship Owning Companies to pay tonnage tax of US$ 0.75 per GRT annually instead of US$ 1.00 to be paid by the PNSC on its shipping income. The amendment (4) made in para 8 deprived PNSC from any preference in private sector cargo, however the government organizations and state controlled enterprises are directed through sub-para (iii) to follow the preference principle laid by the Merchant Shipping Ordinance 2001, and original para 8 of the 2001-policy. Further addition of sub paragraphs (iv), (v) and (vi) have supplemented the PNSC with substantial incentives being the only national flagship. Nonetheless major focus area of the said policy as reflected through the document is bringing the PNSC into an agreement with international LNG shipping company for sustainable energy supply chain. Whereas the clauses given in “Mechanism” as a, b, and c have set targets for PNSC for capacity building within 05 years. On the whole, the 2019-mercantile policy is a combination of strategic goals extended till the year 2030 and set of certain incentives to encourage the parties to attain the goals.

The very recent development made in this regard is the joint statement given on August 06, 2020 by Syed Ali Haider Zaidi, Federal Minister for Maritime Affairs and Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Textile, Industries & Production and Investment. The joint statement is considered anew shipping policy of Pakistan which is not the case. Therefore this development is focusing on one major area of indigenous/Pakistan resident shipping companies and their registration in Pakistan to save foreign exchange. Rooting in the previous versions, the only new feature is the grant of ship financing by the State Bank of Pakistan under Long Term Finance Facility (LTFF) or Islamic Long Term Finance Facility (ILTFF), and facility to accept local currency along with foreign exchange receipts which has also been approved in the Budget 2020-21.

The Merchant Marine Policy, after all the amendments can only be successful if its implementation with full spirit would have taken place. But before considering it a compact document of the National Shipping Policy of Pakistan, all relevant quarters are needed to be taken in confidence including the international liner shipping companies or multinationals as they have proven themselves significant non-state actors in the politics of the countries as there is nothing much enticing for these companies. Most of the shortcomings that are hindering the sustainable development of the port and shipping industry of Pakistan can be overcome by resetting clear policy objectives involving relevant technocrats and even academicians in the process, especially in accordance with the potential of MSRI and CPEC to augment the blue economy of Pakistan, implementation of amended merchant marine policy-2019 with stringent governance and accountability measures, setting up the block chain strategy to eliminate chances of monetary corruption at all stages, and handling all the sectors of blue economy especially port and shipping industry as national interest with absolute dissuasion of political maneuvering of the opportunities or decision making, and using utmost economic diplomacy to increase prospects of economic activity through sustainable port and shipping industry.

Dr Maliha Zeba Khan

Dr. Maliha Zeba Khan is working as an Assistant Professor at the Department of International Relations, National University of Modern Languages (NUML), Islamabad, Pakistan and her area of research is maritime affairs and politics.