econ impact of ports

8/8/2019 Econ Impact of Ports

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Economic Impact K R A Narasiah1

ECONOMIC IMPACT OF PORTS ON THEECONOMIC IMPACT OF PORTS ON THE

REGIONAL ECONOMYREGIONAL ECONOMY

The port is an economic multiplier or an economic

engine.

The economic impact of the port sector is measured atan aggregate level by indicators such as value added,

employment and investment.

We can actually identify, quantify and locate the mutual

relationships between the various port players

Direct and indirect impacts can be actually measured.


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MEASURABLE IMPACTSMEASURABLE IMPACTS--II

The economic impact of the

port sector is measured at anaggregate level by indicatorssuch as, employment and

investment in the region andtherefore has a great impacton Regionaleconomy.


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. . WHICH CAN BE. . Scope of employment opportunities provided

The technical sophistication of job requirements

and the availability of qualified labour

Training and education opportunities for local

populations

The level of wages and social program costs

Level of direct spending (purchases) in the local

and regional economy.


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MEASURABLE IMPACTSMEASURABLE IMPACTS--IIII

Purchases of manufactured goods as a well as

services

Construction wages, employment and spending(short term) versus port and terminal operations

(long term)

Sustainability of spending, both locally and

regionally

The impact regional and national tax bases


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MEASURABLE IMPACTSMEASURABLE IMPACTS--IIIIII

Development of port and shipping related

Industries

Such as

1. Suppliers

2.Ship repairing

3. Cargo support requirements

4. Peripheral needs of the crew


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OTHER INDUCED SPENDING.OTHER INDUCED SPENDING.

The importance of the impact can be understood

by the action taken by the Government in 2006,

when an interactive session was conducted bythe department of shipping with all the maritime

states authorities, to discuss the present

scenario and future plans. In fact the then

secretary shipping stated that provision must bemade for handling 2000 mill. tonnes by 2016-17.


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INDUCED ECONOMIC IMPACTSINDUCED ECONOMIC IMPACTS

created through the subsequent

rounds ofExpenditures which occur in the

market area as a result of the

income earned from the directimpacts.


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COCO--DEPENDENCEDEPENDENCE

Of course, indirect impacts can be functionallyco-dependent.

It is difficult to separate out the various impacts. For example, a carriers purchase of fuel and the

ports maintenance of the infrastructure arecommon costs.

They are necessary for the trip to take place. It is very difficult to allocate the precise revenues

induced to the market area from each of thesecost centres.


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INDIRECT

BENEFIT

S The indirect benefits of the port accrue to those

whose revenue is traceable to activities

induced after the mooring of the vessel.1. Thus, ground transportation and manufacturing

and/or retail services related to the ocean

vessel cargo are secondary recipients.

2. For transient crews it is the service sector,

ground transportation and the hospitality

industry which receive the secondary benefits.


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MULTIPLIER ANALYSISMULTIPLIER ANALYSIS

When a vessel laden with cargo is loaded or unloadedrevenues are

Generated to various parties as a result.

The cargos value-added will generate further demandsfor goods and services.

The extra rounds of spending generated indicate amultiplier effect.

The port immediately opens up opportuniites for settingup new industries either with FDI or with local inputs andcreate a chain reaction in inducing labour and skilled

workers.


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JAPAN RECOGNISES THE

PO

RT

S AS Distribution centre

Industrial zone and energy supply base

Mercantile trading centre attractingbanks, brokers and traders.

Urbanisation and city redevelopment

centre Life activity base

Maritime leisure base.


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econ impact of ports

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