Background

A new type of thinking is needed to deal with the wicked problems of underdevelopment in the Horn of Africa. Business-as-usual, silo and top-down approaches are bound to fail. Advocated by the World Economic Forum in 2008, Blue Growth is a normative approach that ensures fairness in income and wealth distribution. It invigorates local communities by promoting entrepreneurship, development opportunities and social innovations, particularly in the backward areas. This approach fits well the Blue or Green Economy to thrive sustainable development at the grass-root level in the Least Developed Countries. It is also a safeguard against the indiscriminate globalisation that imposes one-size-fits-all rules to penalise those economies at the bottom of the ladder. The post 2^nd World War recipe of the Bretton Wood Institution was miscalculated because it did help to ensure Peace – Development and Prosperity across the world. The global economy has made tremendous progress in the past decades but has created an ocean of poverty with a few islets of plenty. Some of the socio-economic inequalities that cannot be addressed solely through development actions are:

• Gender Inequality: About 50% of the world population is kept away from the economic mainstreams owing to sociocultural taboos. The girls and women are an integral part of human capital. In the time crises, they are the most vulnerable. Business-as-usual will not bring about the required transformation.
• Income Inequality: About 1% of the World Population controls 80% of the global wealth. Trillions of dollars are hoarded in offshore accounts, a small fraction of which in the form of universal taxation can solve the problem of poverty, food insecurity, health, sanitation and education in the poor countries. Corporate Social Responsibility and Philanthropies are good but not enough.
• Climate Change Externalities: Developing Countries, particularly the Small Island Developing States are hit harder by the impacts of Climate Change for which they have contributed the least. Climate compensation debate has been diluted in the COP 21 Paris Agreement. It is most likely that the + 2^oC target will not be attained by 2030 while +1.5^oC will be a serious threat to the developing Small Island and low-lying coastal states.
• Win-lose Economic Model: The expected trickle-down effects of liberal capitalism or free-market economy to ensure an equitable income distribution is a myth. It is the main cause of widening inequalities in the advanced and developing countries alike. The paradox of Poverty in the amidst Plenty. Economic powers in the hands of multinational “ too-big-to-fail ” corporations tend to influence political powers. A shared value or equitable sharing of value-added/wealth and income must be the guiding principle of national and regional political economy.
• Resource access: The international waters which constitute half of the surface of the planet is a common heritage of mankind. It is still open access and exploited intensely by only a few developed countries. After the land grab, an ocean grab is to be avoided.
• Linear Business Approach:  The one problem – One solution at a time is a myopic view of development or problem-solving that creates a chain of externalities to society. It must be replaced systematically by systemic and integrative thinking.
• Local Agenda: Global Strategy – Local Actions. National governments are busy signing international agreements while overlooking the local socio-ecological realities/needs in their countries. Rising conflicts in rich and poor countries alike are a cry of local isolation and despair.  This state of affairs is responsible for the disconnects between the local communities and the States giving rise to populism.

So, the Blue Economy is not a magic recipe for achieving the Global Agenda 2030. The concept is more ocean-centric and should neither be underestimated nor compete unjustly with the underutilised development potentials of land-based, including the freshwater resources and habitats of the IGAD region. From the developing coastal states perspectives, the scope of the ocean economy can be differentiated into existing or traditional industries and the emerging or high-tech driven ones. It can also be strategized through three overlapping development phases namely:

• Known-Known: Greening the existing marine-based industries in the territorial waters (generally between 12 and 25 nautical miles for coast within a depth of about 50 – 60 meters) for which innovative technologies, business models and financing are available. These industries are mostly located in the coastal and inshore marine space.
• Known-Unknown: The living and mineral resources found beyond the territorial waters inside the national EEZ that have been explored but not exploited by developing states mainly because of the availability of cheaper alternative land-based resources as well as poor business enabling the environment.
• Unknown – Unknown: Nearly 50 % of global oceans constitute the Areas Beyond National Jurisdiction (ABNJ) and is practically considered as either the common heritage of mankind or no one’s property or the Wild West. Besides the provision of ecosystem services essential human survival, the marine space is believed to conceal tremendous national living resources and minerals, sustainably used and conserved, can contribute significantly to the wellbeing of the world growing populations and the good health of the entire planet. It is eyed by the developed economies as the “ultimate for the wellbeing of humanity” but the business expansion must wait until an effective global ocean governance mechanism while appropriate technologies, business models and financing are available. Until then, it is safe to use this common space as a vast marine protected area.

It is unthinkable to alleviate poverty, hunger and gender inequality in the IGAD region without the modernisation of the primary sectors, including the freshwater and marine. The productivity per hectare of rain-fed agriculture in the region is 2 to 3 times less than South-East Asia. The lion-share of the value-added of the livestock economy is swallowed by a few brokers and traders due to the absence of organised markets. Modern agriculture can feed the momentum of accelerated economic growth and diversification – by chipping in the manufacturing and service sectors.  IGAD landlocked member-states have large inland water bodies - the inland oceans – to sustain their development. Therefore, a well-thought  Integrated Sustainable Land-Ocean Marshall Plan is required to capitalise on the existing natural resources and development opportunities. IGAD has established several regional thematic agencies, policy and strategic framework and programmes but is in short of implementation capacity and financial resources.

As stated above, the term “sustainable” is inspired by the principles of Sustainable Development or Global Sustainability as defined in the Brundtland Report 1987, i.e. the development that meets the needs of the present and future generations. It aims at restoring the balance between three interconnected dimensions namely, Economic Efficiency - Environment Integrity - Social Equity so that the Society and Economy may operate within the planetary boundaries. The concept is also referred to as a triple-win (People-Profit-Planet) or shared-value approach. These fundamentals are rolled-out in the time-bound socio-economic aspirations of the UN Global Agenda 2030 - No Hunger - No one is to be left behind. The sustainable development concept is operationalised by the Green Economy (SDG 15 – Life on land) for the land-based and the Blue Economy (SDG 14 – Life below water) for marine-based living resources and ecosystems. In other words, the Blue Economy consists of greening the ocean-based industries and their natural environments. Overall, the SDG 14 and 15 capture the entire Land-Ocean nexus of our Planet. On the African continent, the Blue Economy paradigm is also adapted for the sustainable management of the Great Lakes such as Lake Victoria and Lake Tanganyika. The FAO has formulated the Blue Growth Initiatives to mainstream the Blue Economy alongside its Voluntary Guidelines Framework to promote sustainable management and development of the inland and marine small-scale fisheries. The essence is the democratisation of sustainable development to make it accessible the commons - Regional Strategies – Local Actions!

As one of the 8 Regional Economic Communities of the African Union, IGAD is committed to aligning its policy and institutional frameworks to meet up the regional cooperation and integration agenda of the African Union. The United States of Africa is not a  far-fetched dream with the operationalisation of the continent-wide Common Trade Agreement. However, it must adapt its political economy model that integrates an equitable distribution of income and wealth avoid pursuing the liberal capitalism doctrine and the free market fundamentalism. Strong institutions are good for democracy and prosperity. Inequality is not inevitable, but a policy choice. There must not be a trade-off between high economic growth and equitable income distribution. Making the rich richer does not help the poor and is counterproductive. Low taxation is tantamount less spending on essential social services. In other words, irrespective of adopting Green or Blue Economy, Sustainable Development can be boiled down ethics, moral and honesty. Democracy will cede to populism if the local communities are left behind. The most unpredictable part of the economic equation is human behaviour. In shorthand, Sustainable development is about reconnecting the people to humanity and it requires to believe in a new story – “The Future We want”. So, there is an urgent need for social innovation and transformation to progress sustainable development on our planet.

Born at the 2nd World Summit on Sustainable Development 2012 – Rio + 20, Blue Economy emerged as a new narrative for operationalising the principles of Sustainable Development in marine-based industry which are also anchored in the symmetry of the 3 pillars : Economic Efficiency (Profit) –Environmental Integrity (Planet) - Social Equity (People). It mirrors the concept of Green Economy that ensures the conservation and sustainable use of land-based natural resources and environments with a slight bent on decoupling economic growth from carbon emissions. Soon after its inception, the concept was criticised because some advanced economies were using staple food-crops to produce biofuel for their automobile fleets while exacerbating food and nutrition insecurity in the Least Developed Countries. It was initially promoted by the Small Island Developing States to advocate the sustainable development of their relatively vast EEZ. For them, the Blue Economy is their Economy. However, this concept was soon captured by the international community to strengthen the Global Oceans Governance. The Blue Economy is referred to as Greening the marine-based industries. In practical terms, the colour of the cat does not matter if it eats the rats. The green economy holds promises but has not delivered yet and the Blue Economy is nascent.

The SDG 14 “Conserve and sustainably use the oceans, seas and marine resources” – “Life below Water” triggered a new impetus for the Blue Economy. The ocean space accounts for about 70 % of the total surface area of the planet (512 million km²) and provides a cornucopia of the market as well as non-market goods and services, including essential ecosystem functions which are indispensable for the survival of humankind. It is thought as the ultimate frontier for the wellbeing of humanity. However, this Eldorado may be an illusion unless the productivity of the oceans, including the coast and inshore waters is restored and managed carefully. Our oceans are in an unhealthy state due to unsustainable anthropogenic and environmental – climate and non-climate factors. Over 60 % of the world population lives near the coasts and are dependent on the ocean for food, employment and leisure. Taking care of the ocean is valuing humanity.

About 33% of the global oceans are covered by the Exclusive Economic Zones of the coastal and island states. The remaining 66% - which is nearly 50% of the total area of the planet (256 million km²) - is the international waters or the Common heritage of mankind. It is virtually open access and exploited by a few advanced economies.  In the absence of an effective institutional and governance framework, there is a potential risk the Blue Economy may exacerbate the existing inequalities in sharing the ocean wealth and externalities caused by the degradation of the marine environments and ocean warming. For instance, the COP 21 Paris Climate Agreement 2015 is struggling to maintain global warming at below + 2^oC from of the pre-industrial Revolution but it is well-documented at +1.5^oC is the threshold for the developing Small Island and low-lying coastal states. 

Over 90% of the world marine capture fisheries is harnessed inside the Exclusive Economic Zones, mostly within shallow waters of the island and coastal states. Yet, these fish stocks and ecosystems are still poorly managed open access. The small-scale fishery businesses are predominantly informal and unaccountable. The post-harvest losses are estimated at 40 - 70 % of the total catch. Open-access and informality as safety nets against endemic poverty and food security in the least developed countries is a political dilemma.  Well-managed and modernised, the small-scale fishery value chains can contribute significantly to wealth creation, employment, food and nutrition security, gender equality and cultural diversity in these developing rural economies. It is important to clarify the economics of IUU fishing from fisheries management perspectives. IUU fishing and Compliance or Enforcement are the two sides of the same coin. If the developing coastal states do not invest in the sustainable management of the fisheries resources, they are bound to lose many folds to IUU fishing. National laws are inadequate to combat international fisheries and fisheries-related crimes. 

Against the backdrop of the global quest for the Blue economy, the IGAD conference will focus on its regional prospects and challenges by scanning the underutilised potential of the traditional ocean sectors – fisheries, coastal tourism, port and shipping, labour supply... and the prospects for developing convergent emerging industries. It will also evaluate the existing capacities to highlight the capacity needs and gaps at the regional and national levels to establish a realistic Blue economy Strategy. The political economy of cross-cutting issues such as good governance and economic management, regional cooperation, natural resources conservation and management, peace and security, poverty alleviation, food and nutrition, security and climate resilience are also on the agenda.

The IGAD region, also known as the Greater Horn of Africa, stretches over a land area of 5.2 million km2 to band five coastal states - Djibouti, Eritrea, Kenya, Somalia and Sudan - and 3 landlocked states namely, Ethiopia, South Sudan and Uganda. These coastal states have an aggregated Exclusive Economic Zones of 1.1 million Km², including 55,875 km² of continental shelves and 6,960 km of coastline. It also shares some 6960 km of international borders with its neighbouring countries namely, Egypt, Libya, Chad, Central African Republic, Democratic Republic of Congo, Rwanda and Tanzania. The maritime façade of the Horn of Africa is at the edge of one the world busiest navigation corridors and the global value chain ecosystems. This strategic location is emerging as a geopolitical hotspot with the shifting of the economic powers from the Atlantic to the Indo-Pacific region. Africa is the world largest island-continent and is geared to operationalise its unified market with over 1.2 billion people that will turn 2.5 billion by 2050. The “Horn of Africa” can be strategized as the gateway to Eurasia, the largest production and market platform of the planet with about two-thirds of the World GDP through the trillion-dollar Belt and Road Initiative. It is the first time in human history that so much of public and private investments are mobilised for trans-boundary infrastructure and connectivity projects. 

In 2016, the combined GDP of the region was US$ 337 Billion with a caput of US$ 650, which is less than US$ 2 per day. This estimate is less than US$ 1000 which is the current average of Sub-Saharan Africa. The primary sectors – Agriculture, Fisheries and Livestock contribute nearly 50 % of the GDP and 60% of export earnings of the region. The population of the IGAD region stood at 248 million in 2016 and is expected to attain 400 million by 2030. About 50% of the people are below 20 years and are jobless or underemployed. Business-as-usual will deprive the region of the potential demographic dividend unless it invests massively in its human capital. Despite the tremendous development potential of the sub-region, it is still plagued by extreme poverty, hunger and human miseries resulting from dwindling natural resources and environmental degradation which is exacerbated by involuntary immigration and Internally Displaced People;  ethnocultural and armed conflicts, corruption and terrorism. Over the past decades, IGAD has achieved an annual average growth rate of about 5 % but it was insufficient to improve the livelihood and wellbeing of the poorest of the poor.

The region is made up of about 70 % of Arid and Semi-Arid Lands (ASALs) that receive less than 600 mm of rainfall annually. The remaining part has a wide range of landscapes - highlands, swamps, rain forests and climates pertaining to equatorial geography. The total land area accounts for 7% of farmlands, 19% of forests and 28 % of permanent pastures. The remaining 46% is relatively unproductive or marginal land.  Despite the natural resources and environmental vulnerabilities, IGAD member-states are overly dependent on the primary sectors. They rely mostly on rain-fed agriculture, agro-farming and pastoralism which are challenged by water scarcity, environmental degradation and climate risks. The region is a haven for some 12 to 20 million of armed-conflict and climate-induced refugees. The combined inland water area is estimated at 222,358 km²_, nearly 4.3 % of the total landmass which is much higher than the continental average of 2 % and the global average of 0.7%. However, they are naturally unevenly distributed across the region. As a regional block, IGAD can overcome these national disparities to uphold a sustainable Food-Water-Energy nexus. Blue Growth Initiative can inspire an integrated approach to inland and coastal water resources conservation and responsible development.

Fisheries and Aquaculture: The annual fisheries production of the IGAD region is estimated at one million tonnes, which is made up of 86 % inland fisheries, 9 % of inland aquaculture and 5 % of marine fisheries. The aggregated first sale value is about US$ 1.1 Billion per year. The post-harvest physical and economic losses vary between 40 and 70 per cent. Most of the marine inshore and inland fisheries are open-access, poorly managed and exploited erratically. The capture fisheries are predominantly subsistence or artisanal commercial activities and are mostly informal businesses. Marine aquaculture is inexistent. The raw fish and processed fish products are mostly consumed in the vicinity of the landing sites due to lack of social infrastructure and market logistics in the inner country. The per caput fish consumption in the IGAD region is 0.2 kg as compared to the global average of 20 kg. The sub-sector provides direct and indirect employment to some 50,000 people. The fisheries should not be considered a social safety net but reconnect to the national political economy as a growth sector that can conservatively double the current turnover and socio-economic benefits.

Port and Shipping: The seaports are the principal maritime outlets for international trade and for the development of freeport hub and export processing zones to tap into the global value chains. IGAD has facilitated significant investments in port infrastructure and connectivity as a requisite for its regional economic integration strategy. Several trade corridors have been established to connect the landlocked member states to seaports. Port of Djibouti has become a leading seaport and freeport hub in the Horn of Africa. Taking advantage of its strategic location and abundance of labour, the model can be replicated to create more wealth, export earnings and jobs. The Kenyan LAPPSET is a major pan-African multi-modal and infrastructure investment that will transform trade and development in Sub-Saharan Africa. It is a component of the China Belt and Road Initiative. The Chinese Government has a strategy for Africa, but it is crucial for IGAD to develop a coherent strategy to attract Foreign Direct Investments and Partnerships.

Tourism: The tourism industry has great prospects in the IGAD region but is at bay due to lack of hard and soft infrastructure beside safety and security issues. IGAD has formulated a Sustainable Tourism Masterplan 2013-23 and is rolling out the implementation in Ethiopia and Kenya before extending it to the other member-states. Despite its tremendous potential, only a few countries namely, Kenya, Uganda, Ethiopia and Djibouti are deriving substantial benefits from this industry. Some pilot initiatives have demonstrated the high-value chains of regionally integrated marine-coastal and wildlife tourism packages, but they could not be scaled-up due to the weak enabling environment.

Maritime Safety and Security: Maritime security is essential for supporting the Blue Economy. The two subjects are interconnected, particularly in the Western Indian Ocean region with the proliferation of piracy threats, intensification of armed conflicts; drugs, arms and human trafficking, illegal fishing and marine-related crimes over the recent years. Firstly, maritime security is an enabler of the Blue Economy, through safeguarding navigation routes, providing important oceanographic data to marine industries and protecting rights over valuable marine resources and activities within national EEZ. It is called to intensify the interventions against IUU fishing and associated fisheries crimes. Secondly, maritime security is an economic component of the Blue Economy. An expansion of the Blue Economy will create greater demand for maritime security capabilities that will, in turn, trigger increased investments and growth. However, the maritime security issues should not become a window dressing for over-militarisation of the Western Indian Ocean by the foreign powers while riding roughshod on the sovereignty of the Least Developed Countries of the region. Due to lack of transparency in government affairs, security functions are often sub-contracted to multinational mercenary corporations and there is a growing apprehension that security issues have become a lucrative business model for some domestic and external vested interests. A huge amount of money is invested in demonstration of powers rather than addressing the root causes of insecurity in the region which is a by-product of the failing states and underdevelopment. Without creating economic opportunities and social mobility for the frustrated jobless youths in the local communities, it is far-fetched to expect sustainable peace and security in the Horn of Africa. Let’s give these young people jobs to prevent them from taking a rifle. A proactive and holistic approach is required to address the vicious-circle human miseries and insecurity in the region, through the leadership of a trusted regional organisation like IGAD. Strong institutions are necessary for Democracy and Prosperity.

Gender Equality:  The IGAD region consists predominantly of patriarchal societies. There are pervasive gender inequalities in various socioeconomic spheres. The political influence of women is relatively lower than their male counterparts. The gender inequalities are no longer regarded simply as human rights or social policy issues with little economic significance. Traditionally, both men and women play a significant role in regional economies. However, there is no gender balance and fair treatment for female labour across the productive sectors. For instance, agriculture is female-intensive while industry and services are male-dominated. The sector growth patterns tend to influence the gender division of labour and income distribution unless there is an in-depth social transformation in the region. Womenomics is progressing in the IGAD region but a very low pace.

The IGAD region is dominated by informal sectors and women take more the 50% of the informal trade in the domestic and cross-border economies. There are serious gender inequalities regarding access to productive assets such as land, finance and technology, including education and health care. These differences adversely impact economic growth, productivity, and welfare. Educational equality may proxy for other types of equality, such as in health care access, access to agricultural inputs and household bargaining power. Intervention in the agriculture, informal economy and health would take the region far in bringing gender quality. A recent World Bank report revealed that the elimination of gender gaps in education alone in Sub Saharan Africa can lead to 0.5-0.7 percentage point increase in the annual growth rate of per capita GDP.

Introduction

The Intergovernmental Agency for Development (IGAD) is hosting its first Blue Economy Conference to raise awareness on the thrust of the Blue Economy among the key stakeholders in its member-states for enhancing of the entrenched process of economic transformation, shared prosperity and environmental stewardship for the common good of the sub-region. It also aims at galvanising support from the international and regional development agencies;  Business  Community, Science-Technology and Innovation and Civil Society Organisations to build the momentum of the Blue Economy paradigm for unleashing the development potential of its ocean-based and ocean-related industries. In shorthand, it intends to foresight the prospects and challenges for greening the traditional ocean-based activities while looking ahead to harnessing the emerging industries. Appreciating that the Blue Economy Strategy is neither a silver bullet nor a one-size-fits-all recipe, the conference aims at assessing the Blue Economy from the lenses of the Least Developed Countries and the Fragile States of the Horn of Africa. 

IGAD member-states need a big-push to graduate into progressive and resilient economies. However, the current national and regional development strategies are predominantly land-focused while the potential of the coast and ocean industries has been underestimated or overlooked until the emergence of the Blue Economy. The region is craving for decent jobs and sustainable food supplies besides basic social services, including safety and security for the citizenry while safeguarding its natural environments. Well-managed, the aquatic resources and ecosystems can be leveraged to deliver on the triple-wins of global sustainability: Economic Efficiency – Environment Integrity and Social Justice - for the enhancement of the livelihood and wellbeing of the present and future generations of the sub-region. Four key elements of the coastal and ocean industries to be qualified as Blue Economy are:

• Protects, restores and sustains healthy coastal and marine ecosystem services;
• Generates sustainable, equitable economic benefit and inclusive growth;
• Integrates approaches between multiple industries and government; and
• Innovates, informed by the best available science.

The IBEC builds on the ongoing global and regional impetus for promoting the Blue  Economy. The African Union perceives the Blue Economy as the “New Frontier of Africa’s Renaissance”. To turn the dream into reality, it has formulated a plethora of ocean-based and ocean-related policies and strategy frameworks that await effective implementation. They include the Africa Blue Economy Strategy Framework 2016 and Africa’s Integrated Maritime Strategy 2050. The Blue economy is also an integral part of the AU Agenda 2063 and the African Development Bank’s Hi 5 Priorities. NEPAD in tandem with AU-IBAR has formulated and vulgarised the Pan-African Fisheries and Aquaculture Policy Framework and Reform Strategy 2014. On the 25th July 2015, the AU launched the African Day and Decade of the Regional Seas and Oceans 2015-2025 to rally initiatives on the Blue Economy. These strategic documents provide inspirations and guidance for the formulation of the IGAD Blue Economy Strategy and Blueprint through broader consultation. The regional conference will also integrate the outcomes of the recent international and regional ocean forums, including the recent one organized in Nairobi, Kenya.

IGAD region is composed of eight (8) Member States, five (5) of them coastal, namely Djibouti, Eritrea, Kenya, Somalia and Sudan; and three (3) land-locked, including Ethiopia, South Sudan and Uganda. The region has diverse socio-ecological landscapes that are characterized as water-stressed, with harsh natural environments making it reliant on rain-fed agro-pastoralism for its economic development, further exacerbated by demographic pressure and climate risks. Over the past decades, the IGAD region has experienced an impressive average annual economic growth rate of 5 %, albeit insufficient to lift a significant proportion of its population of nearly two hundred and fifty million people (52% female) out of extreme poverty, hunger and insecurity. Addressing these challenges in the region calls for harnessing opportunities availed by different sectors of the economy that have hither-to no received adequate policy or programmatic attention. 

The IGAD region stretches over a land area of 5.2 million km2 which consists of 65% water-stressed and 35 % marginal lands. The combined inland water area is about 222,358 km2 but is unevenly distributed across the region. The coastal states in the region have an aggregated Exclusive Economic Zone of 1.1 million Km2, including 55,875 km2 of in-shore waters and 6,960 km of coastline. This huge blue economic potential of the region provides an opportunity to improve the economic growth of the region to levels that can sustainably impact on poverty reduction and socio-economic transformation. Thus far, efforts have concentrated on addressing conflicts related to access to resources, land degradation, environmental deterioration and biodiversity loss, which pose some of the main challenges to achieve sustainable development, peace and security in the region. IGAD Member States, therefore, need a big-push to graduate from least developed and fragile States to developing and resilient economies. In this regard, leveraging the Blue Economy through inter-alia, sustainable management and responsible development of the freshwater and marine resources is key to ensuring a triple-win for the present and future generations of the region.

IGAD is organizing its first regional Blue Economy (BE) Conference to raise awareness on the prospects of ocean/inland waters-related industries and the Blue Growth principles for promoting and sustaining accelerated economic growth, shared prosperity, climate resilience and peace in the Horn of Africa.  Moreover, at the technical segment of the Conference, Member States will present the status of the development of BE in their respective countries. The sustainable blue economic development initiative is aligned with and reinforces IGAD’s overarching sustainable development agenda for the region. This initiative also complements the vision and aspirations contained in the United Nations 2030 Agenda for Sustainable Development, particularly Sustainable Development Goal 14 on life below water; and further the African Union Continental Agenda 2063, the Africa Integrated Maritime Strategy 2050 as well as it will be aligned with AUC Blue Economy Strategy 2019