KARACHI: There is deafening euphoria among young shipping enthusiasts on the widespread news on revision of Pakistan's Merchant Shipping Policy by the Ministry of Maritime Affairs but is there anything new?

The document making rounds on social media available says that Government of Pakistan will soon grant generous incentives to boost ship owning in Pakistan. This seems good news for stumbling economy to lurch foreign direct investment and the tax holiday at a time when every tax rupee matter is indeed a generous act. According to experts from the Merchant Navy circles; Pakistan's merchant shipping policy was 1st promulgated and notified in 2001 giving its background, clear objectives and set targets for year 2020. It will not be untrue to say that 2001 policy achieved none of its objectives and targets.

Despite offering the similar incentives, Pakistan merchant fleet growth target to increase cargo carriage by national flag ships from 5% to 40% by year 2020 was missed by a wide margin.  The most worrying part of this policy failure was no participation and complete absence of private sector and foreign companies. A quantitative and comparative analysis of 2001 policy and its 2019 amendments shows that present policy document in circulation is a clone of 2001 merchant shipping policy and any impression of new incentives is concocted. A pertinent question to be asked is 'if a policy did not yield result in last 25 years then there is either something wrong with policy itself or we have barren minds making such policies with no clue what is required or need to be done.'

 The sources disclosed that 2019 amendments to shipping policy had its own story to tell and reveal the ugly truth behind failure of 2001 policy from an investor perspective. Shipping was declared a 'strategic' sector and definition of 'resident ship owning company' was introduced. This 2 page document describing amendments to 2001 policy was a rhyme of state own enterprise PNSC, its every paragraph had given absolute right, preference or privilege to PNSC at unknown and unexplained cost to national economy. 

By scrolling through the 2019 amendments, a feeling of disconnect and alienation of policy makers from the shipping and business is predominant. If only the state owned enterprise PNSC, without being competitive, had the right to do businesses of all sort, available within Pakistan i.e., sea transportation of hydrocarbons, LNG contracts, government cargoes etc. then there seems no need for the 'generous incentives' as private sector does not need to make any investment to buy ships and only to find no Pakistani cargoes for their ships by policy design.  Even if some investor is brave enough (that is rare to find) and gather courage to buy a multimillion dollar ship and register under Pakistani Flag, the incentives offered have no meaning due to prevailing complex multiple taxation regimes, and bureaucratic hassles etc., the sources added.