The oceans contain 95% of our biosphere and make up 72% of our planet’s surface. Eighty percent of trade in the world happens at sea. By 2030, the global “blue economy” is predicted to grow at a rate twice as fast as the overall economy and is presently valued at 2.5 trillion USD annually. It is the next frontier in the global economy to achieve sustainable growth, poverty elimination.
95% of Biosphere | 72% of Earth Surface
Comprised of oceans
2x Growth of Blue Economy
Projected to happen by 2030
US$ 2.5 Trillion Annually
Value of Blue Economy
Bangladesh, the largest delta nation of Planet earth sitting at the mouth of Bay of Bengal has immense potential of having an Ocean economy which contributes more to the total economy of the nation. According to the World Bank, the gross value addition (GVA) of the Ocean economy to Bangladesh’s GDP is 3 percent or $6.2 billion. The composition of the Ocean economy of Bangladesh comprises Tourism and recreation, marine fisheries and aquaculture, ship building/breaking, transport, energy and minerals.
Bangladesh's Maritime boundary
The biggest hindrance in the promotion of the Blue economy of Bangladesh was three decade long territorial disputes with India and Myanmar over the sovereign rights on the sea. The Government of Bangladesh in 2009 initiated the legal process to settle territorial sea boundaries and sent legal notices to both New Delhi and Naypyidaw on 8th October, 2009. On March 14, 2012 Bangladesh won sovereign rights over 111,000 square kilometers of waters comprising the territorial sea, and an exclusive economic zone extending 200 nautical miles.
111,000 Sq. KM of Waters
Sovereign Rights won
3 Territorial Disputes Won
Against India and Myanmar
The judgment of the International Tribunal for the Law of the Sea(ITLOS) allowed Bangladesh undeniable sovereign rights over the continental shelf extending 354 nautical miles comprising all living and non-living resources. The judgment by ITLOS had set an important precedent as this was the first time delimited a maritime area beyond 200 nautical miles, known as the “outer continental shelf.”
19,467 Sq. KM Out of 25,062 Sq. KM
Won by Bangladesh
1,18,813 Sq. KM Total Sea Area
80.51% of Mainland
The tribunal also gave full effect to St. Martin’s Island in delimiting the territorial sea and recognised Bangladesh’s right to 12 nautical miles territorial sea around St. Martin’s Island. The verdict on the case against India in the Permanent court of Arbitration, Netherlands came on July 7, 2014 and Bangladesh was awarded 19,467 sq km area out of the total disputed area of 25, 062 sq km. These two verdicts allowed Bangladesh to establish sovereign rights over 1,18,813 sq km of sea area which is 80.51 percent of the mainland Bangladesh(1,47,570 sq km).
Territorial Waters and Maritime Zones Act, 2021
To fast track the Blue economy sector GOB enacted a new legislation, Territorial Waters and Maritime Zones(Amendment) Act, 2021. The act amended the previous act of 1974 and brought several changes coherent with the United Nations Convention on the Law of the Sea(UNCLOS). The Territorial Waters and Maritime Zones (Amendment) Bill, 2021 inserted several new definitions such as Artificial Island,Continental Margin, Dumping of wastes, Maritime Pollutions, Internal Waters, Maritime Zones, Maritime Tribunal, Blue Economy, Warship.
The Blue Economy is covered in Section 7F of the bill. Bangladesh is now able to implement policies and carry out economic activities in maritime zones through the sustainable use of marine resources, such as fisheries, marine tourism, mariculture, marine biotechnologies, marine transportation, port and harbor development, shipbuilding, and recycling. Additionally, section 7H included a survey in the territorial sea, EEZ, and continental shelf in addition to hydrographic, military, and marine scientific research.
Bangladesh Blue Economy development Framework
In 2014, after the verdicts, under the directive of the Prime Minister Sheikh Hasina, the Prime Minister’s Office formed the high-powered committee titled ‘Coordination Committee on Acquisition and Sustainable Management of Marine Resources’ under the leadership of the Principal Secretary, aiming to develop and implement relevant policies and action plans for the advancement and realization of the concept of Blue Economy through dialogue and discussion with stakeholders.
In line with this continuity, the Ministry of Foreign Affairs in a joint collaboration with EU (EU-Bangladesh Joint Collaboration on Blue Economy’) has identified nine specific areas through international, commercial, and environmental perspectives for accelerating the development of Bangladesh’s Blue Economy. Detailed plans for the development and implementation of all these identified areas have been prepared, which have been approved by the aforementioned committee of the Bangladesh government.
Marine Fisheries Management
Mariculture Development
Infrastructural Development of Commercial Shipping
Expansion of Marine Tourism
Research and Development of Offshore Energy, Renewable Energy and Blue Biotechnologies
Ensuring the Ecosystem Services of Mangroves for Sustainable Livelihoods
Expansion of Ship Building and Recycling Industry
Prevention and containment of Marine Pollution
Marine Spatial Planning
Achieving 'Vision 2041'
Achievement of 'Vision 2041' through the development of the Blue economy.
Food and Agriculture
Ensuring food security, increasing agricultural income, and alleviating poverty through cultivation and exploitation of marine fisheries and other aquatic resources.
Port and Industry
Promoting productive use of ports, shipbuilding industry, and sustainable utilization of marine resources including fisheries.
Energy
Achieving inclusive and sustainable economic growth through increased production of organic fertilizer and renewable energy.
Resilience against Climate Change
Ensuring resilience against climate change and natural disasters, combating marine pollution, conserving biodiversity, and promoting sustainable governance of the sea through the establishment of marine spatial planning and the creation of green belts in coastal areas.
Improving Socio-economic condition
Advancing Blue biotechnological industries, fostering innovation, creating artificial islands, and enhancing tourism services to improve the socio-economic condition of coastal and island populations.
To fully realize the success of the Sunil Economic Development Plan, it is essential to prioritize these initiatives based on their significance. Alongside implementation, efforts should be made to formulate necessary policies related to the respective areas.
Composition of Blue Economy in Bangladesh
12% of National Employment
In Marine Fisheries
26.50% of Agricultural GDP | 15% of Total Fish Production
Contributed by Marine Fisheries
15% Per Liter
VAT Refund Provided by GoB
255 Commercial Trawlers | 67,669 Artisanal Vassels
Used for Marine Fishing in Bangladesh
US$ 405.21 Million
Foreign Currency Earned by Marine Fishing
Fisheries sector plays a key role in Bangladesh in alleviating poverty, improving livelihoods, and ensuring food security. At present the sector contributes 3.57% to GDP, and 12% of national employment. Fisheries sector alone accounts for 26.50% of agricultural GDP. However, the marine fisheries sector is underdeveloped in Bangladesh and contributes to only 15% of total fish production and 1% of the total world marine production.
Studies reveal that top producing countries have reached their level on the back of subsidy, vessel construction, price support, and duty benefits. There currently is no special assistance to purchase or construct modern commercial fishing vessels. GOB provides VAT refund from fuel at the rate of 15% per liter for fish export. Bangladesh lacks behind its peers in industrial fishing.
The country currently operates only 255 commercial trawlers and the rest 67,669 artisanal vessels for marine fishing. Bangladesh’s EEZ in the sea has largely remained untapped. Special attention to this sector can contribute to much higher production which will help in achieving food security and earning much higher foreign currency (currently USD 405.21 million).
95% of all commercial trade in Bangladesh is done through sea-lanes and 3 sea ports. Currently Bangladesh has one deep sea port in Matarbari which is scheduled to start commercial operation by 2025. Currently due to limitations on the channel draft ships with more than 9 meter draft don’t enter the port rather stay on the outer anchorage. Once the deep sea port enters operation it will significantly reduce cargo lead time, reduce cost and increase trade competitiveness. It is estimated that by 2043 the Chittagong Port alone will handle 14 million TEU containers which currently stands at approximately 3 million TEU.
From 9 M to 12 M
Increase in the limit of draft for ships in Ctg port
Chittagong port has initiated the construction phase for the Bay terminal project and expects partial operation beginning in 2026. The project includes six terminals which will increase the capacity of Ctg Port by 6 times. The bay terminal will be able to accomodate ships upto 12 meters draft and 260 meters long. Chittagong Port Authority expects a substantial 11.5 billion USD in foreign investment for the construction of the terminals. PSA Singapore and Dubai based DP World will invest in Terminal 1 and 2 respectively and Abu Dhabi Port Group has submitted an investment proposal of $1 billion USD for the construction of Bay Terminal 3. Chittagong Port Authority (CPA) plans to designate Terminal 3 for gas and oil. CPA has already received investment proposals worth $3.5 billion USD.
Since the territorial disputes have been resolved Bangladesh has received 26 offshore blocks in the Bay of Bengal. A 12,933 line kilometer multi- client survey conducted by UK-based TGS has spotted classic hydrocarbon reservoir targets, some as massive as 10 km in width. The survey stated that the submarine Bengal Fan is the largest on earth and is also least explored.
3000 km x 1430 km x 16.5 km
Length x Width x Thickness
24 Blocks
Opened for bidding | 7 companies bought bidding documents
9 Shallow Blocks
3-200 M depth
15 Deep Sea Blocks
201-2000 M depth
Submarine fans are potential hydrocarbon areas. Bengal Fan is 3000 km long and 1430 km in width with a sediment thickness of 16.5 km. A total of 24 blocks have been opened for Offshore Bidding Round 2024. 7 companies have bought bidding documents. The 24 blocks include 9 shallow blocks with 3-200 meters depth and the deep sea blocks are 201-2000 m deep.
Bangladesh unveiled a new PSC in 2023 with tax and duty benefits, a 100 percent cost recovery with a yearly cap of 75 percent and provision of bank guarantees for the performance of exploration programs. The price will be 10 percent of Brent crude oil so earlier provisions of cap have been eliminated. Bangladesh has so far held seven rounds of offshore bidding since 1974. Highest numbers of foreign companies entered production in 1974.
10,000 Deadweight Tonnage (DWT)
Capacity of building ships
25,000 Deadweight Tonnage (DWT)
Potential Capacity of building ships
Bangladesh ranks no. 1 in the global ship-breaking industry. Total ship breaking/building industry contributes $2.5 billion to the GDP. Country’s shipyards have the capacity to build ships of 10,000 Deadweight Tonnage(DWT) with a plan to increase the capacity to 25,000 DWT. However import of scrap ships have reduced significantly and hit a 10 year low due to prolonged dollar crisis in the domestic market, global slowdown adding labor issues on top. There is an urgent need to increase ship building and export capacity, gradual transition to greener industry practices, ensuring international standard labor rights for the industry to gain competitive advantage in the global market.
International tourist arrivals have hit 91% of pre-pandemic levels and global tourism recovered 87% of pre-pandemic levels. Bangladesh recorded 650 thousand international tourists in 2023. The Tourism Master Plan of Bangladesh 2023 aims to transform the sector with an ambitious 5.57 million foreign tourists by 2041 and creating 21.94 million jobs. Currently 5 million people are directly and indirectly employed in this sector. The MasterPlan has sought $1.08 billion in public and private investments. The Government has pledged $105.5 million to develop the required infrastructure.
5.7 Million Tourists Planned to be Attracted by 2041
650 Thousand Tourists Visited Bangladesh in 2023
21.94 Million Jobs Planned to be Created by 2041
Currently 5 Million Jobs Provided by Tourism
$ 1.08 Billion Sought for Masterplan
$105.5 Million Approved
At present, the complex visa process, lack of amusements and social restrictions, lack of transportation is hindering foreign tourist arrivals. There is a need to widen the On-Arrival Tourist visa net and direct flights from Cox’s Bazar and Chittagong to attract a greater share of international tourists. There is an ongoing effort to create a homestay policy which has gained popularity among modern travelers. Fast Tracking of Eco-Tourism Park projects in parts of Chittagong division will create the necessary infrastructure to accommodate a bigger share of international tourists. As Bangladesh is experiencing growth and employment generation slowdown it should open its borders for international tourism and make the best use of the existing infrastructure.
Challenges and Remarks
Most profound challenge in developing the blue economy sector is the execution. Most of the policy formulations have been completed.
Deep sea Fishing is restricted to 50 nautical miles due to a lack of commercial vessels, raw materials and security. The combined capacity of Coast Guard and Navy needs upgrade to secure the entire exclusive economic zone and maintain continuous patrolling to protect economic activities in the area.
The tourism development projects have been prioritized yet the completion rate remains poor. Existing capacity is not being fully utilized due to visa issues. The tourism sector is largely dominated by domestic tourists.
Surveying and mapping is inadequate however efforts have been made to increase domestic capacity. Bangladesh can take assistance from regional economies in increasing surveying capacity to take complete account of all living and non-living resources to then make informed decisions regarding the blue economy of the nation. It is expected that foreign energy firms will explore hydrocarbons in the Bay of Bengal and due to the new PSC agreement will generate lucrative revenues for the foreign firms.
Re-investment opportunities can be assessed and improved to make business opportunities in the blue economy sector for the foreign energy firms lucrative and competitive. Bangladesh is experiencing economic slowdown due external and internal factors and the blue economy sector has the potential to contribute much more to bring respite to the national economy. Much can be achieved immediately through targeted interventions on tourism, fishing and biotechnological research than spending big on mega projects in this sector which in many cases experience deadline misses.
About the Author
Tanmoy Dhar is an Economics graduate from the University of Dhaka. He has served an associate at CounterFoto- A Center for Visual Arts.