Economy

Strengthening cooperation to promote the development of the high range Blue Economy

Published

4 years ago

September 25, 2019

The “blue” industry, especially the high range one, is one of the main development areas for the economy also in the near future.

China, which has always tried to strike a balance between maritime power and terrestrial equilibria in the Heartland, is the right place to think – for the first time – about a complete water geopolitics, as well as a real global industrial project.

The products that will be the axes of the new future technological revolution will increasingly come from the sea: energy, fast transport; rare metals, but also the most common ones; desalinated and processed water; DNA for study purposes and for medical applications, as well as oil and finally various traditional and non-traditional forms of food.

If, from now on, we create a global market for the Blue Economy, we will have safe and peaceful world development. Otherwise, if we repeat the old land struggles on the new sea – possibly with the same violent acquisition logic – we will have such new wars that the experience of land clashes cannot even make us imagine.

The Earth is finite and limited. Now we have to work on the sea, but we have to do so all together peacefully and with win-win actions.

It is estimated that the most environmental-friendly marine industry is currently worth 1.5 trillion US dollars and it is expected to be worth at least twice as much by the end of 2030.

Nowadays China dominates in all these blue economy areas. China’s fishing in foreign waters accounts for 44% of the world’s entire product and the same applies to ocean fishing, which accounts for 52% globally. This also holds true for China’s marine wind energy which accounts for 20% in the world. Also 50% of all the most active ports in the world are Chinese. Unfortunately, China also holds negative records such as 56% of all rivers polluted by plastics in the world.

Half of the world’s industrial fishing is Chinese. Hence, nowadays, China is already the world’s largest sea farmer. It has already organised the exploitation of its largest marine area for deep-sea mining, thus focusing on a deep-sea area that is four times the size of Switzerland.

Either you do good business with China in these areas or it is better staying at home.

Therefore, it is necessary to think about a sea “Silk Road” and not only to reach the Mediterranean.

A Silk Road to quickly change the whole paradigm of the world economy.

Hence, at the same time, it will also be necessary to reduce polluting emissions and possibly start the construction of many ocean parks, with a view to making the sea recover the products that are extracted from it.

Fixed cycle of nature, stability of economic cycles.

Among the companies in the various sectors of the Chinese Blue Economy, the collaboration with selected companies will be particularly useful both for the actual production of marine materials and for environmental protection. It should be recalled that the latter is a side of the Blue Economy coin. China does not think that environmental protection can be separated from the extraction of marine products.

In Europe, the Blue Economy system is still in the development phase. Hence the figures are still quite small: in 2017, the turnover of the whole sector was 658 billion euros, with a gross profit equal to 74.3 billion euros and a number of employees amounting to 4 million throughout the EU-28.

Within the European framework, the Blue Economy envisages the usual sectors of the Chinese one, albeit with a specific focus on underwater defence, which in China is calculated separately, in addition to putting all marine biotechnologies into a single category. The EU also envisages sea renewable energies as the greatest sector for future development.

The traditional European demography is another factor to be considered: 45% (214 million) of the EU population lives on the coasts and the Northern ones always record a higher GDP than the Southern coasts.

The successful European activities in the Blue Economy are still the traditional ones: tourism, spa and health services and some standard biotechnologies.

Obviously there are also maritime construction and repairs, but in specific areas of the European coasts – activities that now tend to be off the market.

Hence an EU Blue Economy linked to labour-intensive technologies, with insurmountable natural differences in the maximum use levels of the various areas.

Never as in the case of the Blue Economy do large expanses and boundless areas count – all the dimensions that, as Hegel said, have always been lacking in the physical and geographical dimension of the Eurasian peninsula.

The Jews called the Mediterranean “the Great Sea”, but this expression does not describe its physical dimensions, but only its historical and cultural ones.

Furthermore, coastal tourism in the EU is worth 54% of all “Blue” jobs and it is still growing, while the transport-related marine economy sectors are decreasing and the remaining maritime sectors are growing very slowly or are stable.

The problem lies in the fact that the Blue Economy is a global project for transforming the production systems and lifestyles. It is not just a matter of hotels by the sea or deep-sea fishing.

For the EU – which is not a Blue competitor of China, but an area of possible integration of tasks and functions – the living resources of the sea still account for a mere 14% of all “Blue” jobs in the EU. It is, indeed, a very low percentage.

The extraction of metals from the seabed is scarce in the EU. It accounts for 4% of employment in the whole Blue sector.

Clearly this also includes oil and gas. And both sectors are declining in terms of profit and investment.

There are 600 active offshore platforms in the EU.

Shipyards account for 8% of employment in the sector, while the maritime product from seaweed processing is very low, with China already accounting for 46% of the world market and with only 6 EU projects currently active for aquatic biomass.

There are only 11 major desalination plants in the EU, mostly owned by large multi-sector companies.

Moreover, we should never neglect the coastal control of climate change, which can become a big global industry.

However, since the time of the report by the Club of Rome that, in 2009, invented the very concept of Blue Economy, his author, Pauli, has always stressed that the Blue Economy is part of the Green Economy – which is always a sustainable practice – and that it is based on new technologies.

And here we revert immediately to China.

China has always been particularly interested in the Blue economy and in technological innovations, with the construction of marine areas of economic innovation. Just think about the Blue Economy Zone of the Shandong Peninsula, established in 2011, where, four years later, an integrated marine economic system began, which in 2020 is expected to become a great mechanism of ecological Blue economy with a high rate of innovative technology.

In 2012, it was the turn of the Quingdao Blue Silicon Valley, a city for the new maritime scientific technologies.

Later China established other industrial areas for the protection of biodiversity and for new marine technologies, mainly in the Yangze River Delta.

Since China’s 13th Five-Year Plan, the Blue Economy has been an ever-growing part of China’s GDP.

Hence, from the Deep-Sea Dragon, a system for producing experimental deep-sea and surface platforms.

There are also the White Dragon’s explorations in the Arctic, albeit with a future research base in the Antarctica, and the Global Multidimensional Network for Ocean Observation, i.e. the network of stations that can be connected to all the scientific, climate, technological and energy observation stations that already operate in other parts of the two thirds of the Planet, namely those covered with water.

We should also recall the collection and processing of minerals extracted from the seabed.

In this case, the international regulations are already very detailed, but it is currently very hard to predict the aggregate effects, which are mutually reinforcing and with unpredictable percentages.

Nor should we neglect the Great Lakes Observing System (GLOS), which is one of the 11 associations in the world that scientifically study the Integrated Ocean Observing System (IOOS).

It initially regards the Great Lakes region between the USA and Canada, but it is also much studied in China.

And the network of Chinese marine sensors will certainly be connected to the large areas of global verification and study.

Hence the problem will increasingly be to control both internal and external waters at the same time.

With specific reference to the Chinese political practice, the 2018 great reform of the State Council, which placed sustainable development at the core of China’s planning, was decisive.

Since then, there has been a Minister for Natural Resources responsible for all land and sea natural areas, as well as for the economic use of land and for the protection and rehabilitation of the most endangered areas or of the already polluted ones.

While in almost all Western countries these powers and responsibilities are divided between various Ministries and Administrations, in China the already efficient chain of command is in the hands of a single political body and of a single Minister. The maximum efficiency for a chain of command.

Moreover, China is currently going through a particular phase: from the fast and traditional development to an even faster one, albeit characterized by high environmental, social, ecological and technological quality.

A new “development way”, which does not imitate Western traditions, but places science and technology into a new vertical and fast political system.

In the Taoist philosophical tradition, to which Mao Zedong essentially belonged, quality and quantity are not always separated in reality and can be analysed, but only through multiple analogies.

Said analogies never stop and cannot be logically separated.

Still today, this is the basis of the political and economic action of the Chinese Party and State.

Not an ordinary imitation of capitalism, but new and free efficiency of a technical-scientific network that is directed with market criteria of mutual interest, completely open to controls.

Hence development based on technology but, above all, on the protection of the environment and therefore of human and animal life, as well as of the life of the elements – and all at the same time.

Once again, the Taoist tradition.

Obviously the protection from pollution is central to the Chinese Blue Economy project. Just think about the project for the ecologization of the Bohai Sea, started in November 2018 – a three-year plan that will lead to the stable cleaning of 73% of all the Bohai Sea coasts.

Rapidity, efficiency and no operational difference between environmental recovery activities and actions to make income from the sea.

In essence, China’s Blue System is divided into two sectors, albeit always interconnected: development of innovative scientific and technological products related to the sea economy, and later, during and after the process, the integrated protection of the environment.

Again to compare China with the European Blue Economy policies, it should be recalled that the EU seas host about 48,000 different species, while the Chinese seas cover an area of approximately 6 million square kilometres, ranging from tropical to temperate climate and up to the Great Cold climate areas.

There are as many as 32,000 kilometres of Chinese coastline, with 22,629 species belonging to 46 phyla.

Data not comparable with those of the Mediterranean, but certainly able to permit, from the very beginning, large economies of scale.

In the EU the per capita yearly consumption of fish is 24 kilos, compared to 41 kilos in China.

It should be reiterated that China has already reached the highest levels of ocean fishing, both in terms of volumes and technologies, outside and inside its territorial waters. Moreover, technologies and economic returns can be useful to everyone.

Worldwide, the actions known as Our Ocean, started by Secretary of State Kerry in 2014, have led in the West only to 36 marine actions to the tune of 550 million euros, and to other commitments, albeit not yet funded, resulting from the 2018 Bali Conference.

Only 64 million euros were allocated for the Mediterranean, and 37.5 million for the South African and Indian Ocean coasts.

Obviously this is positive, but it should be recalled that Chinese investment is already much higher and not only due to the very large size of China’s Blue Area.

Last year the Chinese ocean GDP grew by 6.7%, thus reaching 9.3% of China’s total GDP. In 2018, 17.2 billion yuan were invested in the production of offshore renewable energy.

Excellent data, but this is just the beginning.

An additional 5.5% has been recorded for Chinese maritime transport, while the average yield of traditional fishing is slightly declining. Maritime tourism has already grown by 8.3% in China.

An excellent rate, not even comparable with the rate in the EU, where tourism is one of the fastest growing sector in the Euro-Mediterranean Blue Economy.

Furthermore, while – without any particular use of advanced technology -the Blue Economy in the EU is still largely a possibility, in China it is already a well-established reality.

As the philosopher and sinologist Jullien would say, possibility and reality are the same image, albeit seen in two different ways, but not necessarily at two different moments.

Currently tourism accounts for 61% of jobs in the EU Blue Economy. As we can see, it is an old business with a low average return.

The EU aquaculture is still a small sector compared to China’s huge size and technology, even in proportion to the population, but all the sustainable ocean exploitation programmes in Europe are postponed to an indefinite future and are at risk of funding.

Renewable marine energies will reach 10% of European consumption in 2050-a percentage which already pales into insignificance compared to the Chinese ones.

Apart from bureaucratic and administrative efficiency, with the Chinese Blue Economy we are already on another planet. The Chinese scientists are already thinking about a Blue Economy divided into three major areas: the resolution of water scarcity;the search for deep waters and the cleaning of surface waters.

They are also thinking about technological innovation, which is scarcely pursued in the EU. China has already developed 100 projects, for 10 years, with 100 million new jobs. All these projects have already begun.

Finally, in China there will be an integrated marine economy between research and the balanced exploitation of resources.

In particular, the development sectors that China currently likes are deep-sea aquaculture with the use of cages; ocean satellite communication, which is optimal; marine biomedicine; desalination with advanced technologies; the search for minerals in the seabed; offshore oil exploration; research into marine antiseptic and medical materials; the production of renewable energies at sea.

It is in these areas that China’s greatest ten-year effort will develop.

The management of the Chinese sea is based on a simple concept: the ecological absorption capacity of the seas.

Protection is based on the criterion of sustainable development, not on the circular economy with a zero return rate. Everything is designed to reduce environmental waste.

Moreover, sustainable development between land and sea -which is another specific issue for China – will be the development and not just the preservation and conservation of coasts.

The primary concept for doing all these things together is Harmony, a Confucian criterion that relates Man to his Environment.

Hence coordinated development between economy and society.

This is the same deep criterion of the “Silk Road”: a harmonious, global and strategic project that works only with market rules and is connected to a win-win logic, which ensures benefits to everybody.

According to the latest data available, in China the companies related to the Blue Economy have grown at a pace ranging from 14% to 4%.

For the time being, the regions directly concerned are the following: Zhejang, which is responsible for implementing the “Maritime Strategy of the East Sea” and focuses on ports and island economies.

Then there are Guangdong, which hosts the companies operating in the integrated management of the maritime economy; Fujian, where cooperation through the straits is pursued; Shandong, which develops the “Blue Economy Zone of the Peninsula” to create a primary gateway to North East Asia, and finally Tianjin, where high-level maritime technology is put into practice.

As early as 2001, 14.46 million people have already been employed in the Chinese Blue Economy, with a one million increase every year.

The cooperation with Western companies is already in place both at financial level, so as to share cutting-edge technologies, and for the participatory development of regions and companies.

Furthermore, the Chinese Smart Ocean programme also envisages a network of sensors on the coasts, at sea, in flight and in the space.

All this is designed to build a complete real-time monitoring system of all China’s seas and rivers – a network that should connect to the equivalent systems in other parts of the globe.

A turtle strategy that, according to Chinese tradition, epitomizes the North and the Waters, but is also invulnerable, due to its powerful shell.

Related Topics:China Economics Maritime Renewable Energy

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Giancarlo Elia Valori

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Economy

Impact of Multinational companies on Pakistan

Published

21 hours ago

March 30, 2023

Farrah Saleem

Multinational companies (MNCs) have had a significant impact on Pakistan’s economy since the country’s liberalization and opening up to foreign investment in the 1990s. Overall, the impact of MNCs on Pakistan can be seen as mixed, with both positive and negative effects on the economy and society.

Multinational companies (MNCs) are firms that operate in multiple countries, including Pakistan, and are usually headquartered in developed countries. They have the capability to invest large amounts of capital, technology, and expertise, which can significantly impact the host country’s economy. MNCs, bring foreign direct investment (FDI) to Pakistan, which is essential for economic growth.

The presence of MNCs in Pakistan has had a positive impact on the economy in various ways. They have contributed to the development of infrastructure, which has helped to improve the country’s business environment. MNCs have also helped to increase exports, which has led to an increase in foreign exchange reserves. Additionally, they have introduced modern technologies and practices, which have enhanced productivity and efficiency in the local industries.

One of the significant impacts of MNCs on the Pakistani economy is their contribution to employment generation. MNCs have created jobs for the local population, which has helped to reduce unemployment and poverty. According to the State Bank of Pakistan, the number of people employed in the manufacturing sector, where most MNCs operate, has increased by 2.8% in the fiscal year 2020-21. This growth can be attributed to the expansion of MNCs in the country.

The presence of MNCs in Pakistan has also led to the transfer of skills and knowledge to the local workforce. MNCs employ highly skilled professionals who share their knowledge and expertise with local employees. This transfer of skills and knowledge helps to enhance the human capital of the country, which is essential for economic growth.

Furthermore, MNCs have a significant impact on the tax revenue of Pakistan. MNCs pay corporate taxes, which contribute to the government’s revenue. According to the Federal Board of Revenue, the contribution of MNCs to the country’s tax revenue has increased by 19.9% in the fiscal year 2020-21. This increased tax revenue can be attributed to the expansion of MNCs in the country.

MNCs have negative impacts on the environment and may exploit natural resources. The entry of MNCs into the Pakistani market has increased competition for local firms, making it difficult for them to compete with well-established global brands

MNCs have been accused of exploiting labor and natural resources in Pakistan. There have been reports of low wages, poor working conditions, and environmental damage associated with MNC operations in the country.

The current situation of multinational companies (MNCs) in Pakistan is mixed. On one hand, Pakistan has been successful in attracting foreign investment in recent years, with MNCs investing in various sectors of the economy such as telecommunications, energy, and infrastructure. On the other hand, Pakistan still faces a number of challenges that can impact the operations and growth of MNCs.

One of the major challenges faced by MNCs in Pakistan is the weak and uncertain regulatory environment. The country’s legal and regulatory framework is often viewed as complex and difficult to navigate, which can make it difficult for MNCs to operate and make long-term investments. In addition, corruption and lack of transparency in the regulatory environment can increase the cost of doing business and reduce investor confidence.

Another challenge is the inadequate infrastructure in Pakistan, which can make it difficult for MNCs to operate efficiently.

Furthermore, Pakistan has faced security challenges that can impact the operations and growth of MNCs. Terrorism, political instability, and sectarian violence can increase the risk of doing business in the country and deter foreign investment.

Despite these challenges, there are opportunities for MNCs in Pakistan, particularly in sectors such as agriculture, healthcare, and tourism. The country has a large and growing population, a strategic location, and abundant natural resources, which can make it an attractive destination for foreign investment.

The impact of multinational companies (MNCs) on the thinking of people in Pakistan can be both positive and negative, depending on various factors such as the nature of the company’s operations, its business practices, and the local cultural and social context.

On the positive side, MNCs can bring new ideas and practices to Pakistan and can help to expose people to different ways of thinking and doing business. They can also bring job opportunities and skills development to local communities, which can have a positive impact on the local economy and people’s quality of life.

Moreover, MNCs can help to promote cultural exchange and understanding between Pakistan and other countries. For instance, MNCs may bring in employees from different parts of the world, exposing local employees to different cultures and perspectives. This can lead to increased tolerance and diversity in society.

On the negative side, MNCs may lead to negative consequences for local communities and the environment. MNCs may contribute to the marginalization of local businesses and industries, leading to the loss of local cultural and economic practices. This can have a negative impact on people’s sense of identity and belonging.

The impact of MNCs on the thinking of people in Pakistan is complex and multifaceted. While they can bring new ideas and opportunities, they can also have negative consequences for local culture and values. It is important for MNCs to be aware of these potential impacts and to operate in a socially responsible and culturally sensitive manner, in order to promote positive outcomes for both the company and the local community.

In conclusion, the current situation of MNCs in Pakistan is mixed. While there are challenges such as a weak regulatory environment, inadequate infrastructure, and security concerns, there are also opportunities for foreign investment in various sectors of the economy. It is important for Pakistan to continue to address these challenges and create a more investor-friendly environment to attract further foreign investment and promote economic growth.

Economy

How Saudiconomy, is an economic-transformational miracle?

Published

2 days ago

March 29, 2023

Abdul Rehman Shoro

Saudi Cabinet session. image Source: Saudi Press Agency

What is happening in the Global economy? The outlook seems entirely iffy, in the state of flux and bewildered with negative outlooks. The answer is, “Disturbance”. If we analyze the global-environment with respect to economy, we find it clouded with discussions pertaining to hawkish vs. dovish trends of central-banks, rising inflation, hyper-inflation, tanking GDP growth, Russian-Ukraine conflict, energy-crises, broken supply-chains, unemployment, recession-fears, supply-shocks, lower demands, inverted yield-curves, liquidity crises, banking debacles and many other ensuing economic-ramifications etc. all have become talk of corridors and towns.

In my opinion, the global economy seems in shambles, extrapolated perceptions assumed by analysts out of Jackson Hole meetings and other developed-countries’ central-banks are creating disturbances in financial-markets. Simply, the world is devoid of any solid vision, which could steer it towards betterment and prosperity. Major financial newspapers are dreading with inflation impacts. Ask any banker across the globe about his or her medium-term economic-outlook & you’ll get an ugly picture painted.

Welcome to Saudi Arabia, the year 2022 the country surpassed a mark of a trillion-dollar economy according to both IMF and Oxford Economics coupled with GDP which grew at 8.7% in 2022. The annual CPI in Saudi Arabia increased by 2.5% and inflation averaged at 2.47% in 2022 which is “absolutely nothing” against double-digits’ inflation worldwide.

So paradoxically asking, what is happening in Saudi Economy? The answer is, “Growth”. If we analyze Saudi economic ecosystem, we find it filled with positive economic-vibes where the discussion is all about hike in industrial-production, foreign-investment-inflows especially huge industrial-investments, mining-investments which aim to unleash the potential of natural-resources, infrastructure-investments, giga-projects, achievement of economic & financial targets on time, flourishing private-sector, multiplying Non-Oil GDP etc.

Taking global-view, H1+H2 of 2022 were clouded with immense geo-political tensions, with ultimate economic-ramifications. But KSA has remained insulated of all global economic-vagaries, which attests the resilience & robustness of Saudi economic framework which is strengthened by Saudi leadership. The fiscal-year 2022 attracted significant foreign capital-inflows, which proves that Saudi Arabia has successfully positioned itself as a desired-destination of global financial-capital amid the ongoing global-turbulence. Saudi Arabia has successfully averted economic-effects of current geo-political turmoil, in terms of utilities, food-security and inflation-containment etc.

The question arises, how did KSA achieve this economic excellence & resilience in really a short time-span? The answer is, a Vision is being implemented and realized by Saudi leadership with sheer commitment and enabled by Saudi youth. This trifecta is indeed a global successful case-study of how major economic-transformations can happen in a short-period of time.

Delving into more details, the fundamental reason is, in 2016 Saudi Arabia had devised a brilliant Vision 2030 under the leadership of H.R.H King Salman and this was a road-map drawn by H.R.H Crown Prince Mohammad Bin Salman, as a forward strategic-economic framework. Under this brilliant vision, uniquely-crafted “Vision Realization Programs” (VRP) were designed, each tasked with a particular niche to smoothen the regulatory-processes, incentivize deployment of local-resources and ultimately attract private-sector & foreign-investments. All these VRPs are showing satisfactory-progress and many of these VRPs have over-achieved brilliantly.

Another driver of this economic-success is a significant-emphasis on optimizing potential of “Non-Oil GDP”. It is the Non-Oil GDP, which ultimately provided an impetus and incentivized Saudi Private-sector to act proactively. The fuel for sky-rocketing “Non-Oil GDP” is actually the giant private-sector of KSA, whose potential is being unleashed by Saudi government via launching a partnership-program namely “Shareek” which aims to intensify the potential of SAR 5 trillion of domestic private sector investments by 2030. The aim is to maximize the private-sector contribution up to 65% in Saudi GDP by 2030.

One of the attributable reasons of this economic-miracle of Saudi Arabia has been a constant emphasis on Higher Education & Research. For instance, scholarship programs for Saudi students proved to be a stellar success. Today we see countless highly-qualified Saudis, possessing valuable global-experience are now steering many organizations in both the public and private sector of country. Their competence coupled with determination, passion & loyalty for their leadership and the country paved the way for Saudi Arabia to result such an economic-success. Nature Index which tracks scientific & intellectual contributions globally has ranked Saudi Arabia, 1st in Arab World & 30th globally in 2022, which manifests emergence of high quality scientific-output by Higher education ecosystem.

Saudi Arabia was one of the countries, which made headlines across global-media due to smart Covid-management, leaving behind many developed economies. For instance, King Abdullah Port has bragged the 1^st-position leaving behind 370 global-ports in a globally-renowned index, Container Port Performance Index – 2021 by World Bank and S&P Market Intelligence, which analyzed performances of 370 ports in post-Covid broken supply-chain scenario. Similarly, Jeddah Islamic port and King Abdul Aziz port have bragged 8th and 14th position respectively.

Saudi Arabia’s Sovereign Wealth Fund, Public Investment Fund has emerged as one of the smartest-SWF leaving behind many decades-old SWFs with stellar investments. The PIF (AuM = 620 USD billion) with its in-built strong potential has taken lead in investing locally in Saudi Arabia. In any country, a monetary-system always carries immense importance in proper functioning of an economy & solidifies its robustness. This important task is being carried out diligently by Saudi Central Bank, SAMA, which is brilliantly regulating Saudi financial-sector.

Saudi Arabia is taking a lead in developing state-of-the-art infrastructure. Each of the giga-project is adding gross-value of billions of SAR directly to economy and is providing thousands of jobs. I call them; “Super-infrastructure” because they are being developed with a super-vision, led by super-teams, giving super-results and yield a super-future. Recently Knight Frank which is a top-notch and a century-old UK-based real-estate consultancy firm has evaluated the 15 giga-projects up to 1.1 trillion dollars.

Indeed, Saudi success story of economic-transformation and diversification embodies sheer brilliance, commitment and determination, which has manifested wonders in less than a decade as appreciated by the Managing Director of IMF in the recent WEF sessions, in these words, “They (Saudis) are using the increase in revenue very effectively to create the investment environment for future growth for diversifying the economy,”

Economy

Economic Strangulation Policies to Impact Kashmir Socio-Economic Dynamics

Published

3 days ago

March 28, 2023

Anum Iqbal

For decades, India has implemented coercive economic policies in the estwhile state of Jammu and Kashmir, a region that has been the subject of a longstanding dispute between India and Pakistan since their partition in 1947. Despite ongoing efforts to suppress the aspirations of the Kashmiri people, including economic deprivation, one of the most significant examples of India’s economic coercion in the region has been the imposition of an economic blockade.

In 2019, the Indian government further intensified its efforts by revoking the special status of Jammu and Kashmir, which had granted the region autonomy to determine its economic policies. This move was accompanied by a curfew and communication blackout that effectively isolated the region from the outside world, further exacerbating the economic hardship faced by the people of Jammu and Kashmir.

The blockade has had a devastating impact on the economy of IIOJK. The region’s tourism industry, which was a major source of revenue, has been decimated. The Indian government has also seized control of the region’s industries, including its mineral and agricultural resources. The region’s apples, for example, are a major source of revenue, but Indian authorities have blocked their export to the rest of the country, causing huge losses to the farmers.

India has also used other economic measures to exert control over the region. For example, the Indian government has placed restrictions on the movement of goods and people across the Line of Control (LoC) that divides the region between India and Pakistan. This has made it difficult for businesses to import and export goods, as well as for people to visit their families and friends on the other side of the LoC.

In addition, the Indian government has used financial measures to suppress dissent in the region. Indian authorities have frozen the bank accounts of individuals suspected of involvement in anti-India activities. This has made it difficult for these individuals to access their own funds, as well as for others to conduct transactions with them.

India has also used its control over the region’s financial institutions to exert pressure on the Kashmiri people. For example, Indian authorities have pressured banks in the region to refuse loans to individuals suspected of anti-India activities. This has made it difficult for these individuals to start businesses or invest in their communities.

The application of economic strangulation policies in IIOJK is expected to have a substantial impact on the socio-economic dynamics of the region. These policies are aimed at restraining economic activity and growth, and they are likely to result in various harmful consequences for the people of Jammu and Kashmir.

The primary effect of these policies will be an increase in poverty and unemployment rates. As businesses struggle to function and create employment in an environment of economic uncertainty, a considerable number of people will find themselves out of work and grappling to make ends meet. This is likely to intensify the existing social and economic disparities in the region.

Another probable outcome of the economic strangulation policies is a decline in the living standards of the people. As economic activity slows down, prices of essential goods and services are likely to surge, making it difficult for individuals to obtain the basic necessities of life. This could potentially result in a surge in social unrest and political instability in the area.

Additionally, the economic strangulation policies may lead to a decrease in the overall standard of healthcare and education. As the government diverts resources away from these sectors to impose economic sanctions, hospitals and schools are likely to face reductions in funding and staffing, thereby leading to a deterioration in the quality of these essential public services.

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So far, the impact of India’s economic coercion on the people of IIOJK has been devastating. The region’s poverty rate is estimated to be around 30%, and unemployment is rampant. The lack of economic opportunities has led many young people to join freedom fighters, which have been fighting for Kashmiri independence from India for decades.

India’s economic coercion has also had a profound impact on the mental health of the Kashmiri people. The curfew and communications blackout imposed by India in 2019, for example, left many people feeling isolated and helpless. The lack of economic opportunities has also led to high levels of stress and anxiety among the region’s youth.

The international community has condemned India’s coercive policies in IIOJK but is not willing to pressurize India over human rights violations. The United Nations has called for a peaceful resolution of the Kashmir dispute, and has urged India to respect the human rights of the Kashmiri people. The Organization of Islamic Cooperation (OIC) has also expressed its concern over the situation in the region.

Pakistan has been vocal in its condemnation of India’s actions. The Pakistani government has called on the international community to intervene in the dispute, and has urged India to withdraw its military forces from the region.

One of the recent policies of economic strangulation in IIOJK by India is the implementation of new land laws in the region. In October 2020, the Indian government issued new land laws that allow non-residents to purchase land in the region. This decision has been met with widespread condemnation from Kashmiri political leaders, who argue that it will lead to demographic change and the loss of control over their land.

Kashmiri leaders from mainstream political parties have also rejected the decision of the Indian government to levy taxes in the region without representation. The slogan “No taxation without representation” has been used by these leaders to argue that the Indian government has no right to impose taxes on the people of the region without their consent.

The argument put forth by these leaders is that the Indian government has violated the basic principle of democracy, which is that the people have the right to elect their own representatives who can make decisions on their behalf. By imposing taxes without representation, the Indian government has effectively denied the people of IIOJK their democratic rights.

The Kashmiri political leaders have also argued that the Indian government’s decision to levy taxes without representation is a violation of international law. The International Covenant on Civil and Political Rights, which India is a signatory to, guarantees the right of all peoples to self-determination. The Kashmiri leaders argue that by imposing taxes without representation, the Indian government is denying the people of IIOJK their right to self-determination.

The Kashmiri leaders have also pointed out that the Indian government’s decision to impose taxes on the region without representation is a continuation of its policy of economic strangulation in IIOJK. They argue that the Indian government’s actions are designed to suppress the aspirations of the Kashmiri people and to maintain its control over the region.

Overall, the impact of the economic strangulation policies in IIOJK is likely to be extensive and severe, affecting not only the economic but also the social and political structure of the region. The people of Jammu and Kashmir are likely to face various challenges in the upcoming years as they strive to adjust to this new reality, highlighting the need for the international community to closely monitor the situation and take action to support those affected.