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Billions That Sink to the Ocean Floor: Q&A with Ragnar Arnason

June 3, 2015

Andrea Borgarello for the World Bank

Ragnar Arnason is the lead author of the World Bank report Sunken Billions: The Economic Justification for Fisheries Reform and the forthcoming Sunken Billions Revisited: Progress and Challenges in Global Marine Fisheries.  He has taught fisheries economics since 1989 and is chairman of the Institute of Economic Studies at the University of Iceland. He advises on fisheries management systems around the world, and has been a visiting scholar at universities in the United States and Europe.

What was the impetus behind the first Sunken Billions?

Ragnar Arnason (RA): It was already known at that time that fish stocks around the world had been decimated and that accompanying damage to the marine ecosystem had unforeseeable consequences. The basic aim of the first Sunken Billions was to highlight the economic side of the problem and quantify the associated economic loss while motivating global leaders and decision makers to address the issue.

In our first 2009 study, we found that countries around the world were losing huge amounts of money because of the way they were managing—or rather not managing—their fisheries. This loss had never been quantified before. We found in this initial study that about $50 billion in potential benefits from the fisheries was lost each year.

What has changed since the first Sunken Billions report?

RA: What I see is heightened awareness and realization that this is a serious economic issue. The original study helped to make the world aware of the economic depth of the problem.

How can developing nations benefit from fisheries management reform?

RA: Fisheries are an important activity and a source of income and food in many developing nations. Those who fish for their livelihood need secure, lasting and sufficiently exclusive rights to run fisheries. I think the priority is to install appropriate fishing management systems where, ideally, there will be individual rights but in some cases community rights. Good governance will be key to improving fisheries management and enforcement of regulations in the industry.

What do you think we can learn from Iceland’s fisheries system? 

RA: Fisheries are extremely important in Iceland. There’s a lot to learn from Iceland about fisheries management, as well as from many other similar island states. In Iceland, fisheries contribute directly about 10 percent of the GDP and up to 25% indirectly. There has been a lot of interest in how to run them well since Iceland was at the forefront of the extension of national exclusive economic zones and individual rights-based fishing. The Icelandic system has been very successful in restoring fish stocks and the economic health of fisheries. This management system is far from perfect, however, and is not appropriate everywhere. Ours is one of many approaches to improve fisheries management.

Why revisit Sunken Billions now?

RA: The original Sunken Billions estimate was based on the 2004 data. Now we want a corresponding estimate of forgone benefits in global fisheries for 2012. The forthcoming study suggests that the global marine fishery in 2012 was still losing substantial economic benefits. We wanted to reinforce the messages from 2004 of what is being lost, as well as what progress has been made.

It’s pretty important to see what has been achieved, and there seems to have been small global progress: The global biomass appears to have recovered somewhat, and the overall net benefit from marine fisheries has improved. (See preliminary results from the forthcoming World Bank Study.)

My hope is that every five or ten years we repeat these estimates to inform the world how the global marine fishery is progressing. It helps people to keep track of what is happening and to understand the wealth of natural capital and the value of natural resources. The value of the natural capital contained in ocean resources depends on how you use them. The more careful and prudent this use, the higher the value of the capital. Quantifying losses in fisheries, for example, helps us understand and appreciate the extent of attainable benefits that are lost each year in the industry.

Sunken Billions quantifies these losses with the help of robust methodology. It also represents a powerful way of looking at ocean use problems. We now know that the benefits lost can be regained by installing good fisheries management, and these funds can be used for constructive purposes such as building much-needed infrastructure and other investments for poverty reduction and sustainable development.