The Blue Economy And Small States
The Blue Economyand Small StatesCommonwealth Blue Economy Series, No. 1
The Blue Economyand Small StatesCommonwealth Blue EconomySeries, No. 1Commonwealth Secretariat
Commonwealth SecretariatMarlborough HousePall MallLondon SW1Y 5HXUnited Kingdom Commonwealth Secretariat 2016All rights reserved. No part of this publication may be reproduced, stored in aretrieval system, or transmitted in any form or by any means, electronic ormechanical, including photocopying, recording or otherwise without thepermission of the publisher.Published by the Commonwealth SecretariatEdited by PrePress Projects LtdTypeset by NovaTechset Private Limited, Bengaluru & Chennai, IndiaCover design by Commonwealth SecretariatPrinted by Hobbs the Printers, Totton, HampshireViews and opinions expressed in this publication are the responsibility of theauthors and should in no way be attributed to the institutions to which they areaffiliated or to the Commonwealth Secretariat.Prepared by Julian Roberts, Adviser in the Oceans and Natural ResourcesAdvisory Division, the Commonwealth Secretariat; and Ahmed Ali, ResearchOfficer in the Economic Policy Division, the Commonwealth Secretariat.Roberts, JP and A Ali, (2016), The Blue Economy and Small States. CommonwealthBlue Economy Series, No. 1. Commonwealth Secretariat, London.Wherever possible, the Commonwealth Secretariat uses paper sourced fromsustainable forests or from sources that minimise a destructive impact on theenvironment.Copies of this publication may be obtained fromPublications SectionCommonwealth SecretariatMarlborough HousePall MallLondon SW1Y 5HXUnited KingdomTel: 44 (0)20 7747 6500Email: publications@commonwealth.intWeb: www.thecommonwealth.org/publicationsA catalogue record for this publication is available from the British Library.ISBN (paperback): 978-1-84929-156-9ISBN (downloadable e-book): 978-1-84859-950-5
iiiForewordThe Commonwealth has 2.2 billion citizens, many of whoselivelihoods and food security depend upon the world’s oceans,seas and coastal areas – the largest ecosystem on the planet. Inthe years following the 2012 Rio Summit, we have witnesseda marked increase in international awareness of the oceans’potential as a key driver of sustainable economic growth. Thiscontribution was subsequently ratified by the internationalcommunity’s adoption of the Sustainable Development Goalsin September 2015. Goal 14 specifically recognises the criticalcontribution the ocean can make to the development of thesmallest and most vulnerable nations. Furthermore, theemergence of the ‘blue economy’ concept demonstrates a setof practical strategies to ensure that economic activities do notcompromise the long-term capacity of ocean ecosystems tosupport those activities, and remain resilient and healthy.Managing the oceans effectively is a uniquely cross-national,cross-sectoral challenge. With its cross-cutting nature, theblue economy concept offers a unique opportunity to addresscomplex and inter-connected challenges, without compromisingeconomic growth. This is a concept that, if implementedeffectively, can contribute to a significantly broad range ofsustainable development outcomes. It has the potential to helpcountries to make the transition from their current trajectoriesof over consumption to more resource-efficient societies thatrely more strongly on renewable marine resources to satisfyconsumers’ needs and industry demand, and to tackle climatechange.The Commonwealth has a long history of engagement onissues relating to ocean management and sustainability and,for a number of years, has advocated and promoted the blueeconomy concept as a holistic means of addressing sustainabledevelopment at multiple levels. Indeed, long before the RioSummit in 2012, Commonwealth Heads of Government hadstressed the need for practical outcomes on the blue economyto ensure the sustainable management of oceans as the basisfor livelihoods, food security and economic development.Furthermore, most recently, at their meeting in Malta inNovember 2015, Commonwealth Heads of Government
ivBlue Economy and Small Statesfully acknowledged that the development of a sustainablymanaged blue economy would offer significant opportunitiesfor economic growth and general development for manyCommonwealth states.In order to fully realise the many opportunities presented bypursuing a blue economy approach, fundamental changesare required to address the matter of ocean governance at thenational, regional and global levels. If we are going to createocean solutions that are sustainable over the long term, we needto recognise the interdependencies of the three dimensions ofsustainable development, which must be mutually reinforcing.Fundamentally, existing sectors must be managed in a muchmore sustainable manner. Small and developing states must alsoembrace the development of new sectors, many of which have astrong technology base, to achieve more diversified and resilienteconomies.Such change can only be realised through strong leadership.Nowhere is this truer than for the ocean, a resource perceivedto be everyone’s right but no one’s responsibility. Creatingthe political will to implement all elements of a blue economystrategy is a key theme in the assistance and advice theCommonwealth provides to countries. It is our belief that muchof the focus and emphasis must be placed on governance inorder to successfully transition to a vibrant blue economy. TheCommonwealth has a niche and is a global leader in supportingcountries to effect the necessary changes.This Commonwealth Blue Economy Series presents a synthesisof information and practical advice to Commonwealthgovernments relating to the potential deployment of a rangeof policy options for different sectors and opportunities forthe road ahead. In so doing, this series aims to support thedevelopment of the blue economy in Commonwealth countriesby providing a high-level assessment of the opportunitiesavailable for economic diversification and sustainable growth.Deodat MaharajDeputy Secretary-GeneralEconomic and Social Development
vContentsForewordiiiAcronyms and abbreviationsviSummaryvii1Oceans and the Global Economy11.1 Purpose of this series and summary ofvolumes 5234References7The Blue Economy Concept92.1 Defining the blue economy112.2 Priorities for the blue economy152.3 Optimising returns from existing activities18Endnote19References19The Blue Economy and Small States213.1 The blue economy potential in small states233.2 Fishing243.3 Maritime transport263.4 Coastal tourism263.5 Potential blue economy growth sectors28Endnotes31References31Growing the Blue Economy 334.1 Barriers to blue growth354.2 Creating the enabling conditions tosupport blue growth36References 41
viAcronyms and abbreviationsEEZsexclusive economic zonesEIUEconomist Intelligence UnitESCAPUN Economic and Social Commission for Asiaand the PacificGDPgross domestic productNGOsnon-governmental organisationsNOEPUS National Ocean Economic ProgramOECDOrganisation for Economic Co-operation andDevelopmentSDGsSustainable Development GoalsSIDSsmall island developing statesSMEssmall and micro enterprisesSOPACSouth Pacific Applied Geoscience CommossionUNCEDUnited Nations Conference on Environment andDevelopmentUNCTADUN Conference on Trade and DevelopmentUNDPUN Development ProgrammeUNEPUN Environment ProgrammeWWFWorld Wide Fund for Nature
viiSummaryThe ocean is an essential part of the world economy – fromthe uses made of ocean space, the social and economic valueswe attach to it, the important goods and services it supplies, tothe activities it supports. Many small island developing stateshave jurisdiction over globally significant ocean areas, whichtypically far exceed their terrestrial footprint and are thereforedependent to a large extent on ocean resources and the sectorsthey support. Coastal and island nations, both large and small,are increasingly looking to their marine waters to bolsterslowing growth in their terrestrial economies by exploring newopportunities for investment and employment.This fundamental contribution of the ocean reaffirms a criticalneed to achieve better coherence across the social, economicand environmental pillars of sustainable development, but in afundamentally different way from the manner in which modernsociety has historically viewed the balances and linkages up tonow. A paradigm shift is needed in how we use and manageocean resources to reverse current piecemeal approaches thatlead to over-exploitation, marine ecosystem degradation andincompatibility of uses. Such a paradigm should be strategic,integrated and cross-sectoral: it must be able to encompass theneed for healthy, productive and biologically diverse oceans,well-established and newly emerging economic activities,sustainable livelihoods and secure human settlements.Since 2012, many small island developing states have embracedthe emerging concept of the ‘blue economy’ as a mechanismfor realising sustainable growth centred on an ocean-basedeconomy. In that time, the blue economy has emerged as akey component of a new global dialogue about the role ofcoastal and ocean waters in sustainable development. For smallstates, in particular, the concept of the blue economy presentsitself as a promising avenue for economic diversification andgrowth embedded in fundamental principles of environmentalsustainability.A blue economy-centred development approach, whichsustainably utilises ocean resources, has the potential to mitigatesome of the inherent structural challenges of small states. Theseinclude small, undiversified economies, limited fiscal space and
viiiBlue Economy and Small Statesthe high unit costs of providing public services. These challengesare partly the result of having small populations, small domesticmarkets and limited conventional natural resources. Some ofthese countries are also highly vulnerable to extreme weatherpatterns and climate change, with many only a few metresabove sea level and facing natural hazards. Countries that fullyimplement the blue economy concept have the twin potential ofrealising economic development benefits that address economicstructural challenges, while at the same time improvingenvironmental sustainability.While there are currently a number of models describingthe ‘blue’ and ‘green’ economies, there is a critical gap inunderstanding the full potential of the evolving blue economyconcept, particularly in the context of small states. To addressthis gap, the Commonwealth has launched this Blue EconomySeries as a means of providing governments with practicaladvice concerning the implementation of blue economydevelopment frameworks at the national level.
Chapter 1Oceans and the GlobalEconomy
13Chapter 1Oceans and the Global EconomyThe idea of using the sea for economic gain is hardly new. Islandnations, in particular, have benefitted from their ocean resourcesfor centuries, with marine uses and activities contributingsignificantly to their development and overall economies. Theseinclude a wide range of maritime sectors essential to bothcurrent and future economic development, including: capturefisheries; maritime transport and ports; coastal tourism; mineralexploitation; as well as the marine ecosystems and resourcesthat support them. What clearly is new, however, is a growingappreciation of the critical role the oceans play in sustainableeconomic growth and, as a corollary, a growing appreciationof the need to better manage and protect coastal and marineecosystems and resources that are the fundamental basis for thatgrowth.According to a recent study by the Organisation for EconomicCo-operation and Development (OECD 2016), the value of theglobal ocean economy may be in the order of US 1.5 trillionper annum, contributing approximately 2–3 per cent to theworld’s gross domestic product (GDP). Marine services, such astourism and shipping, provide the largest proportion (US 880billion [bn]), followed by sectors categorised under marineresources (US 377 bn) and marine manufacturing (US 107 bn)(Government of Ireland 2012). Globally, approximately350 million jobs are linked to the oceans through fishing,aquaculture, coastal and marine tourism and research activities.Moreover, in excess of one billion people depend on fish as theirprimary source of protein (OECD 2012) (see Figure 1.1).Research conducted by countries around the world suggests thatthe ocean economy or ocean industries can produce from 1 to 5per cent of national GDP (Park and Kildow 2014). For example,in 2014, the US National Ocean Economic Program (NOEP)estimated values for the ocean economy. By its estimates, in2010, the ocean economy comprised more than 2.7 millionjobs and contributed over 258 billion (1.8 per cent) to theGDP of the United States. In the case of China, it is estimatedthat the ocean economy contributed US 962 bn (10 per cent ofGDP) in 2014, employing 9 million people; while in the case of
14Blue Economy and Small StatesFigure 1.1 Contribution of the ocean to global economic developmentSource: Author’s calculation and WWF 2015bIndonesia, the ocean economy contributed 20 per cent of GDP,comparable with other low middle-income countries with largeocean territories (Economist Intelligence Unit [EIU] 2015).As well as the direct economic contributions, the ocean alsoprovides a broader range of essential services to human
1Oceans and the Global Economy5communities that support economic well-being and humanhealth. For example, a recent study by the World Bank andthe Commonwealth Secretariat (Hampton and Jeyacheya2013) estimated that the economic value of coral reef-relatedtourism and recreation in Indian Ocean small island developingstates (SIDS) was in the order of US 1.4 billion, a value thatis only surpassed by the coastal protection value of coral reefs(US 1.58 billion).Recognising this potential, coastal and island nations, bothlarge and small, are looking to their marine waters to bolsterslowing growth in their terrestrial economies, discover newopportunities for investment and employment, and buildcompetitive advantage in emerging industries such as deepseabed mining and marine biotechnology. In this context,the emerging concept of the blue economy has gained a greatdeal of prominence since 2012 as a mechanism for realisingsustainable growth centred on an ocean-based economy (Anon,2014). In that time, the blue economy has emerged as a keycomponent of a new global dialogue about the role of coastaland ocean waters in sustainable development. For small states,in particular, the concept of the blue economy presents itselfas a promising avenue for economic diversification and growthembedded in the fundamental principles of environmentalsustainability.1.1 Purpose of this series andsummary of volumesThe blue economy has clearly been embraced by many SIDSbut, while there currently exist a number of models describingthe green and/or blue economies, the critical gap in theseconcepts, particularly in the context of SIDS, is a mechanismfor their implementation. Little, if any, practical information isavailable to countries wishing to implement these concepts atthe national level.There is, therefore, a need to move beyond the current dialogueon the subject of achieving sustainable development to deliverpractical solutions to countries that are pragmatic, realistic andachievable, while at the same time delivering tangible benefitsto countries in terms of economic diversification, and food andenergy security.
16Blue Economy and Small StatesThis Commonwealth Blue Economy Series aims to support thedevelopment of the blue economy in Commonwealth membercountries by providing a high-level assessment of some ofthe opportunities available for economic diversification andsustainable growth in SIDS. To complement this introductoryvolume, four additional volumes have been prepared. Additionalvolumes will be added to the series as new information andexperience becomes available.This first volume of the Commonwealth Blue Economy Seriesprovides an overview of the opportunities, challenges, barriers,gaps and opportunities in building a blue economy, with aparticular focus on SIDS. It is clear that the development ofa blue economy in individual countries will face significantchallenges and constraints. It is equally clear that the prospectsfor developing a blue economy and transforming the nascentconceptual framework that has developed over an extendedperiod, are real and capable of achievement. Doing so willrequire addressing a number of significant gaps and barriers,and addressing a number of both thematic and sectoral enablers.The countries that succeed in this challenge are likely to be thosewho are willing to pursue a dual strategy of both investing inimproving the management of existing sectors and also in thedevelopment of new sectors, for which limited experience orcapacity may currently exist. Volume 2 explores the potential for the developmentof a blue economy aquaculture industry. Volume 3 explores the potential for the furtherdevelopment of capture fisheries as a key contributingsector to the blue economy. Volume 4 explores the potential for and actionsneeded to progress the generation of energy frommarine renewable sources in SIDS. Volume 5 explores the opportunities available for thedevelopment of a blue biotechnology sector in SIDS.Drawing on international experience in the respective sectors,each of these volumes provides recommendations that will assistgovernments in moving the relevant sector towards becomingan economic reality where opportunities exist. It is hoped thatthe material presented in this series will stimulate thinkingabout how SIDS can benefit from the development of the blue
1Oceans and the Global Economy7economy by integrating different sectors into the ‘blue growth’agenda.ReferencesAnon (2014), ‘Blue Economy Concept Paper’, available at: ments/2978BEconcept.pdf(accessed 8 April 2016).Economist Intelligence Unit (EIU) (2015), ‘The Blue Economy: Growth,Opportunity and a Sustainable Ocean Economy’, an Economist IntelligenceUnit briefing paper for the World Ocean Summit 2015, available files/Blue%20Economybriefing%20paper WOS2015.pdf (accessed on 21 March 2016).Government of Ireland (2012), Harnessing our Ocean Wealth: An IntegratedMarine Plan for Ireland, Government of Ireland, July 2012, 8, available df (accessed 7 April 2016).Hampton, MP and J Jeyacheya (2013), Tourism and Inclusive Growth in SmallIsland Developing States, Commonwealth Secretariat, London.Millennium Ecosystem Assessment (2005), Ecosystems and Human Well-being:Biodiversity Synthesis, World Resources Institute Washington, DC, availableat: ment.356.aspx.pdf (accessed 1 April 2016).Organisation for Economic Co-operation and Development (OECD) (2016),The Ocean Economy in 2030, OECD Publishing, Paris.OECD (2012), The Future of the Ocean Economy: Exploring the prospectsfor emerging ocean industries to 2030, draft OECD Project ProposalDocument, 15, available at: ean%20Economy%20Project%20Proposal.pdf (accessed 7 April2016).Park, KS and JT Kildow (2014), ‘A study on rebuilding the classificationsystem of the ocean economy’, Journal of Ocean and Coastal EconomicsVol. 2014, Article 4, 37, available at: http://cbe.miis.edu/cgi/viewcontent.cgi?article 1001&context joce (accessed 22 March 2016).
Chapter 2The Blue EconomyConcept
211Chapter 2The Blue Economy Concept2.1 Defining the blue economyThe ‘blue economy’ concept was first coined during the 2012United Nations Conference on Sustainable Development (Silveret al. 2015), (hereafter the ‘2012 Rio Summit’). It is an evolvingconcept that
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