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25 May 2017, Gateway House

Indian Ocean Rim Association Senior Officials Meeting

This speech was delivered by Rajiv Bhatia, Distinguished Fellow, Foreign Policy Studies, Gateway House and Chair, FICCI Task Force on Blue Economy, at the Indian Ocean Rim Association Senior Officials Meeting in Jakarta

Distinguished Fellow, Foreign Policy Studies Programme

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The following speech was delivered at the Indian Ocean Rim Association Senior Officials Meeting in Jakarta on 9 May 2017. 

I rise before you to make a succinct presentation on the knowledge paper entitled “Blue Economy: Vision 2025 – Harnessing Business Potential for India Inc and International Partners.” This study has been prepared by FICCI’s Task Force on Blue Economy after nine months of diligent work, deep deliberation and widest possible consultations in India.

At the outset, I wish to thank most warmly the Government of Indonesia, the IORA Secretariat, and the Government of India for affording me this unique opportunity and honour. As Chair of the Task Force, I note that India attaches a high degree of importance to endeavours for optimal development of Blue Economy opportunities. During the past one year, New Delhi played host to a series of seminars and conferences with a focus on Blue Economy. These intellectual efforts have contributed to raising the awareness and motivation levels of India Inc to explore present and emerging opportunities.

I address you as a specially designated representative of the Federation of Indian Chambers of Commerce and Industry (FICCI). Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India’s struggle for independence, its industrialisation, and its emergence as one of the most rapidly growing global economies. FICCI is the voice of India’s business and industry, drawing its strength from diverse regional business chambers across states, and reaching out to over a quarter of a million companies.

With IORA, FICCI has a long-standing and mutually beneficial association since it serves as the Business Secretariat of the IORA in India. It was highly impressed and inspired by the pioneering effort of IORA in convening its first Ministerial Conference on Blue Economy in Mauritius in September 2015.

After internalising the long-term implications of IORA’s Blue Economy project, FICCI took the innovative initiative to constitute a 16-member Task Force, comprising the country’s top domain experts and relevant successful CEOs and asked them to “develop” a business model for India’s economic engagement with Blue Economy nations and “integrate” it with the envisaged international cooperation in the Indian Ocean region. The study or report of the Task Force is now in your hands.

This document has six substantive sections.

The first section, “Overview”, spells out the meaning, scope and emerging contours of Blue Economy, stressing the changing significance of oceans from a classic medium of transport and source of fisheries to being a wellspring for multiple resources. Harnessing ocean resources and assets in a sustainable manner has now become fairly central to the world’s pursuit of Sustainable Development Goals (SDGs). SDG 14 (“Life Below Water – Conserve and sustainably use the oceans, seas and marine resources for sustainable development”) directly relates to it. Other SDG goals – 1, 2, 6, 7-13, 15 and 17 are also relevant in this context.

After examining available literature and a plethora of definitions of Blue Economy, the Task Force crafted its own formulation on it, which runs as follows:

“The Blue Economy encompasses a wide range of economic activities pertaining to sustainable development of resources and assets in the oceans, related rivers, water bodies and coastal regions – in a manner that ensures equity, inclusion, innovation and modern technology. Subtly distinguishable from the “ocean economy” in terms of nuance and emphasis, the Blue Economy is a newer and more contemporary term, popular with Small Island Developing States (SIDS) as well as international organisations, media, experts and governments in a growing number of countries.”

The report notes the immense economic value of various activities connected with oceans, ranging from marine transport to global communications, as food and energy provider, and as a medium for marine tourism. Taking an overall view, it observes that “the oceans are pegged at the seventh position among the world’s top ten economies.”

The “symbiotic” linkage between Blue Economy and security has been recognised. An American expert put it aptly: “Security and prosperity are two faces of the same coin.”  Although the UNCLOS regime may have brought about order at sea in terms of management of sea spaces and resources, difficulties are encountered especially in disputed sea areas and when States seek to unilaterally exercise authority over them.

The second section outlines the legal regime for exploration and exploitation of marine resources. Inherent in the concept of Blue Economy is the optimum exploration and exploitation of marine resources within and beyond national jurisdictions. This also involves an inherent obligation to preserve, conserve and protect the marine environment for future generations.

Utilising unique expertise available within the Task Force, a special Table has been designed that provides a broad overview of the existing legal regime for the exercise of jurisdiction, sovereignty and sovereign rights concerning the exploration and exploitation of resources, and indicates some possible areas of business opportunities.

The third section presents a detailed review of business opportunities and constraints in India. It is meant not only for India Inc and Indian authorities; it has wider relevance in the region. It examines critically the present situation concerning a total of ten major sectors of Blue Economy. Potential opportunities and challenges in a few of these sectors have been illustrated with relevant charts.

The fourth section outlines the global perspective of Blue Economy prospects, as seen from India’s viewpoint. A brief reference is included to Prime Minister Narendra Modi’s vision of the Indian Ocean, captured in the oft-cited acronym SAGAR, standing for “Security and Growth for All in the Region.” Elsewhere, mention has been made of the Sagarmala Project, launched by the Indian government in March 2015. This has the following three key pillars: (i) Supporting and enabling Port-led development through appropriate policy and institutional interventions and providing for an institutional framework for ensuring inter-agency and ministries/departments/states’ collaboration for integrated development, (ii) Port Infrastructure Enhancement, including modernisation and setting up of new ports, and (iii) Efficient Evacuation to and from hinterland.

In the opinion of the Task Force and India Inc in general, the SAGAR vision and the Sagarmala Project, viewed together, present a comprehensive view of India’s long-term policy approach on security and development in the Indian Ocean region. The report portrays how India’s actions have matched with her promises, especially in three realms, namely security measures, development partnerships, and educational and cultural cooperation. It has also identified a series of promising business opportunities concerning the following countries:

Bangladesh, Myanmar, Sri Lanka, Maldives, Mauritius, Seychelles, Malaysia, Thailand, Indonesia as well as Kenya, Tanzania, Mozambique and South Africa.

Based on the foregoing analysis, the report presents, in the fifth section, a detailed list of recommendations made by the Task Force. They aim to enhance India’s capability to derive maximum benefit from the potential of Blue Economy. The macro approach, favoured by us, will be based on the tripod of “Growth, Employment and Protection of Environment.”

The Task Force is convinced about the desirability of India adopting a holistic strategy which is anchored in Public Private Partnership (PPP). This should be designed to accelerate growth, while ensuring sustainable development.

We have urged our nation to demonstrate leadership in developing a normative framework for doing business and harnessing the ocean potential sustainably. This framework should:

  1. Ensure just and equitable environment for seizing the business opportunities in the Indian Ocean region.
  2. Establish coordination between mature and emerging sectors. Since mature sectors (e.g. shipping, ports, maritime logistics etc.) have the experience of accounting for security challenges, they could provide valuable lessons to the new emerging sectors (e.g. minerals exploitation and renewable energy) in best accounting for security threats.
  3. Include elements of national security, human security, marine safety and ecological integrity, both in planning and operations.

Of the main sectors that constitute Blue Economy, the Task Force believes that  in the coming years India Inc needs to give priority to the following five sectors: Fisheries and Aquaculture; Seaport and Shipping (including port development); Tourism (including island development for tourism); Renewable Ocean Energy; and Mining (offshore hydrocarbons and seabed minerals).

Other recommendations and suggestions relate to an array of issues pertaining to resources beyond national jurisdiction, trade and investment, valuable inputs from business and other sectors, advocacy, IORA and FICCI. On advocacy, the Task Force asserts that as the Blue Economy is a new frontier, it is essential to disseminate awareness by embedding this concept into the education and training system, especially at business schools and in economic diplomacy modules by the Foreign Service Institute and the Indian Institute of Foreign Trade.

Concerning IORA, we have proposed to the Indian authorities to consider persuading the Association to accept Blue Economy as the seventh “priority area.”

Finally, two specific recommendations have been addressed to FICCI itself, suggesting it to convene a National Conclave on Blue Economy in 2017 and an International Conference on Blue Economy in 2018, with a view to carrying forward a purposeful dialogue that results in actionable and coordinated plans in our region. The International Conference, it has been suggested, should be in a Track 1.5 format, with representation from the countries identified. An in-principle endorsement by IORA of the proposed conference will be deeply appreciated.

In the end, the Task Force earnestly hopes that its study will trigger a constructive debate within India and among the IORA member-nations as a way to assist the crafting of a comprehensive strategy to leverage Blue Economy opportunities, both at the national and regional level.

I thank you very much for your kind attention.

Rajiv Bhatia is Distinguished Fellow, Foreign Policy Studies, Gateway House and Chair, FICCI Task Force on Blue Economy.

The following speech was delivered at the Indian Ocean Rim Association Senior Officials Meeting in Jakarta on 9 May 2017. 

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