The Business Case for Building a Blue Economy in Small Island Nations
Heidi Schroderus-Fox, Acting High Representative for the Least Developed Countries, Landlocked Developing States and Small Island Developing States.
13 April, Koror, Palau - As the saying goes, we know more about the surface of the moon than the seafloor of our own ocean. But perhaps not for too much longer.
In recent decades, we have witnessed a dramatic rise in marine activities so much so that scientists have named it “Blue Acceleration.”
By 2030, many ocean-based industries have the potential to outperform the growth of the global economy, both in terms of value added and employment. These industries include offshore wind, tidal and wave energy; offshore aquaculture; cruise tourism; maritime surveillance and marine biotechnology. Projections suggest that the ocean economy could reach over US$3 trillion by the end of the decade.
Investing in an ocean economy clearly makes economic sense. Each dollar invested will yield, on average, five dollars in return, according to a recent analysis by the High Level Panel for a Sustainable Ocean Economy.
One group of nations in particular, small island developing States (SIDS), can reap the benefits of a rapidly growing ocean economy. While they may be small in size, many refer to themselves as ‘large ocean states,’ and clearly for good reason. Through their exclusive economic zones (EEZs), SIDS control some 30% of all oceans and seas. The size of some EEZs is truly breath-taking. For example, Saint Lucia has a marine reserve the size of Germany, while Tuvalu has an EEZ 27,000 times its land mass. The combined EEZs of Mauritius and the Seychelles represent an area bigger than India.
SIDS have long been stewards of vast ocean spaces spanning the Indian Ocean, Pacific and Caribbean and they are leading the way in leveraging their ocean resources for economic development and climate action.
Take Seychelles for instance, whose former President, Danny Faure once called the blue economy the “next frontier of our development.” In 2018, Seychelles launched the world’s first sovereign blue bond, mobilizing $15 million for blue economy projects to fund climate action, as well as sustainable marine and fisheries projects. Similarly, in March 2020, the country secured the first-ever climate adaptation debt restructuring, which forgave part of its foreign debt in exchange for designating nearly a third of its ocean territory, an area larger than Germany, as a marine protected area.
And here in the Pacific Island nation of Palau, host of the Our Ocean Conference which kicked off today from 13-14 April, the Palau National Marine Sanctuary (PNMS) went into effect on January 1, 2020. The sanctuary has closed 80% of Palau’s EEZ to all forms of extractive activities including all types of fishing. Twice the size of Mexico, it is among the world’s largest marine protected areas and follows earlier ambitious conservation efforts where the country designated it’s entire EEZ in 2009 as a shark sanctuary.
The shark sanctuary is clearly a lynchpin for the tourism industry in Palau. A study found that one reef shark during its full life is worth $1.9 million to Palau in tourism revenue. On the flip side, a shark sold for consumption was only worth around $108. In other words, a shark being worth 17,000 times more when swimming in the ocean than on a dinner plate not only makes ecological sense, it makes business sense too.
And in the Caribbean, Belize has become the first country in the Americas to complete a debt conversion for ocean conservation which will restructure US$550 million of external commercial debt, 30 percent of the country’s GDP, and reduce its national debt by 12 percent. Belize’s investment will see US$180 million being put back into the conservation of its marine ecosystems over the next two decades. This is clearly not just an investment in nature but livelihoods too. Tourism, an estimated 25 percent of which is reef based, creates 41 percent of Belize’s national income.
With run-away climate change and a global economy still reeling from the impacts of the COVID-19 pandemic, the investments by island nations in their ocean economies also strengthens their resilience to external shocks. But with limited resources they cannot do it alone. The business community, both local and international are critical partners. Their success is intimately tied to the success of ocean economy strategies by SIDS governments which in turn impact business sectors such as tourism, airlines, fisheries, shipping and emerging sectors such as biotechnology and ocean energy.
With the pioneering efforts by SIDS like the Seychelles, Belize, Palau and many others, the business forum my office held in Palau on 12 April brought together governments and business representatives to seek solutions to current challenges such as financing and technology constraints in expanding the ocean economies of SIDS. Going forward, the forum will spur a new generation of ocean economy partnerships between the global business community and SIDS governments ahead of the fourth United Nations conference on SIDS in 2024.
To be clear, the examples set by SIDS is not about business as usual. What island nations are demonstrating is that benefitting from ocean resources is not a zero-sum game. Conserving the ocean protects marine life and generates economic growth for island and business communities alike.