Sri Lankans are the only islanders, who have turned their backs on the sea, lamented a former Navy Commander, late Admiral R. Kadirgamar. He strove passionately to develop the shipping industry, in the interest of both security and economic development. When Ceylon Shipping Corporation acquired its first ship mv Lanka Rani in 1970, it had [...]

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Shipping think tank needed as super powers lay claim to sea lane

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Port of Colombo: Shipping is no longer restricted to serving trade, it is inextricably mixed with security.

Sri Lankans are the only islanders, who have turned their backs on the sea, lamented a former Navy Commander, late Admiral R. Kadirgamar. He strove passionately to develop the shipping industry, in the interest of both security and economic development. When Ceylon Shipping Corporation acquired its first ship mv Lanka Rani in 1970, it had to fly the British flag  until our Merchant Shipping Act was passed. The first Minister of Shipping P.B.G. Kalugalla. established Ceylon Shipping Corporation, Colombo Dockyard and the Central Freight Bureau. Minister Kalugalla’s successor Lalith Athulathmudali accepted the baton gratefully and made Sri Lanka the shipping hub of South Asia. Colombo port was made a transshipment port and Ceylon Shipping Corporation was modernized to become South Asia’s first container line. During the 30 year war Colombo Dockyard Ltd built Dvora boats for the navy, while our government and private sector owned ships carried essential cargo to the North for the civilian population and security forces. The much talked about Avant Garde show, was possible due to Lalith’s innovative off shore services from the then idling port of sleepy Galle, to ships numbering over 400 each day by passing Sri Lanka.They were non-military services. Several shipping agents are earning foreign exchange today from that off shore service.

The principal achievements of the three ministers who followed (Ashraff, Chamal and Mahinda) was the production of numerous shipping policy reports and the construction of political ports of Oluvil and Hambantota. The policy reports were visionary only, like most election manifestos.  The purpose of this narrative is to highlight (a) the range of shipping activities is diverse and opportunities to reap benefits are enormous. (b) Like oceans shipping is constantly changing due to technological developments, increasing competition and strategic security issues. Shipping is no longer restricted to serving trade. It is inextricably mixed with security.  The rivalry between China, India and the US to dominate in the Indian Ocean, has spawned some significant and interesting initiatives. Examples are China’s Pentagon dubbed String of Pearls, including Hambantota Port, the Maritime Silk Route, Port City and planned Kra canal across Thailand. India’s responses to Chinas strategic moves include Mausam, Indian Ocean Conference 2016 held in Singapore from 1-3 September 2016, Bay of Bengal Initiative for Multi Sectoral Trade and Economic Co-Operation (BIMSTEC) meeting to be held in Goa in October 2016 and declared plans to block Malacca Straits in the event of a war against China with US support. US initiatives include Obamas Pivot to Asia policy and failed Trans Pacific Partnership Agreement (TPP). These check mating moves inevitably impact on Sri Lankas trade, economy and security yet unlike all other countries in the region, there is no research and development body in Sri Lanka to monitor foreign strategic moves and make policy recommendations. The nelsonian look, while a gem of a Kra canal is glittering on Hambantota, is incredible.

The idea to cut a navigable canal across the narrow Kra isthmus of Thailand was first conceived by Thai King Narai in 1677, but was not implemented due to lack of technology and finance. After world war two, Britain in order to protect its colony Singapore, forced Thailand to agree not to cut the canal by an agreement signed on 1 January1946 in Singapore. Currently 80% of China’s exports and 50% of oil imports pass through the vulnerable Malacca Straits. US hostility to China’s emergence as a rival world power drove China to revive the Kra canal project with Thailand. The canal is expected to boost Thailand’s economy. Wall Street Daily of 27 January 2016, acknowledged that the Kra canal, a product of the geo political battle between China and US is part of China’s Maritime Silk Road strategy. China’s military Daily Mail admitted, that it is important for China to have an alternative route owing to India’s plans to block Malacca Straits. The US is now closely monitoring the progress of the K project. In 2005 Pentagon prepared a report on the canal for Secretary Donald Rumsfeld. Pentagon’s 2008 Joint Operations Environment report listed Hambantota and Kra canal as part of China’s shipping lane protection strategy. In August 2016 Japan’s Kyodo News reported, that the huge Kra canal project may have already commenced silently.  China’s Foreign Minister Wang Yi during his visit to Sri Lanka on 8 July 2016 said China will align its MSR project with Sri Lanka’s plans, to enable Sri Lanka to become the shipping hub of the Indian Ocean. But it takes two to tango. As Sri Lanka’s chief diplomat Maithripala Sirisena should know correct protocol and remember to protect Sri Lankas interests and not US and India’s interests. Straits Times of 20 August 2015, reported Vietnam’s decision to build a $2.5 billion sea port in Camau. The report added the project does not make economic sense, until it is superimposed on the heady sea traffic, Kra canal stands to provide. If Mahinda Rajapaksa had at least one good adviser, he would have advised him to claim that, Hambantota port was built to serve ships coming through Kra Canal! The $50 billion canal will be 135 km long, 400 metres wide and 30 metres deep and is expected to be completed within ten years. Sri Lanka’s next government after 2020, should be ready to reap the windfall benefits. The canal will shorten the transit time to Europe by 1,200 km. China’s well planned strategic moves in the Indian Ocean pushed the panic button in Delhi, Washington and Singapore. Their joint reactions are, Indian Ocean Conference 2016, held in Singapore from 1-3 Sep 2016, (watch out the next conference is to be held in Sri Lanka in 2017). The Bay of Bengal initiative for Multi Sectoral Trade and Economic Co-Operation meeting is to be held in Goa in October 2016 and President Sirisena has been invited. The conference in Singapore was organized by India Foundation and Sri Lankas Institute of Policy Studies. Participation was by invitation only. Taiwan was invited, but not China, Myanmar, Cambodia and Laos. There was low profile participation by Australia but high profile participation by the US. The brochure stated that the intention is for critical and maritime states in the region to discuss issues impinging on region wide national security and national development through the tri prism of geo economic, geo economy and geo culture. The theme of the conference; Culture, Commerce and Comity, is closely linked to India’s Mausam project, which is India’s answer to China’s Maritime Silk Road. It is a Ministry of Culture project, to expand India’s presence culturally and strategically in the region and was clearly a cloak under which India conceals its ambition to dominate in the region.According to Wikipedia, India Foundation established in 2009 by Prime Minister Modi is a right wing think tank. Extremist Hindu Organisation RSS is closely associated with it. The conference was timed to be held on the eve of the G20 meeting in China. Professor Lee Cordner of University of Adelaide and several observers agree, that the core purpose was to send a strong message to China, that India has historic and present influence in South and South East Asia, plus to enhance India’s profile as the major power in the Indian Ocean chief guest speaker Prime Minister Ranil Wickremesinghe emphasised the need for consensual agreement and that no single state should dominate the system. He added that for the US, the Pacific region and not the Indian has been intrinsic to its security, the Indo Asia Pacific is destined to remain as a concept only. His hosts including Nisha Biswal would have been disappointed. It is amusing to note that, India which sabotaged Sri Lanka’s initiatives to declare the Indian Ocean as a zone of peace, Institutional Marine Affairs Cooperation (IOMAC), South Asia Cooperative Environment programme (SACEP) and other moves for co-operation, is now proposing to establish Indian Ocean Order. It is well known that the mistrust of India is the principal cause, for the failure of SAARC. The co-hosting of the conference by Sri Lanka’s Institute of Policy Studies to send a warning to China and apparent recognition of Taiwan as a separate state, while ignoring China, is disturbing. Perhaps as Christ said they do not seem to know what they are doing. Will Taiwan and not China participate in the proposed 2017 follow up conference, to be held at the China built Bandaranaike Conference Hall? Even though China, US, India and Japan are pushing Sri Lanka to play its role, the policy to turn the back to the sea continues. Even though our shipping industry makes a significant contribution to GDP, even the Central Bank lacks the details. Shipping more than the tea or the tourist industry, needs a research and development body. Sri Lanka’s life saving export and import trade is a dependent on shipping, and constantly changing international shipping services impact on both ou economy and security. All the maritime countries of the region have set up bodies to monitor the changes and advise their authorities on the policies to promote their interests. Examples are, Singapore    Research Maritime Centre, and theCentre for Maritime Innovation and  Technology (MINT), South Korea Maritime Insitute, Philippine Maritime Industry Authority (MARINA) India’s National Maritime Foundation.South Korea earned $34.5 billion from shipping in 2015, Philippines seafarers alone remitted to $ 5.6 billion in 2014. Even though over 5,000 Sri Lankan seamen are working on foreign ships earning an average monthly salary of around US$400 there are no statistics of their remittances. Although the shipping industry is one of the biggest providers of employment no one knows how many Sri Lankan stake holders in shipping have formed their associations like Ceylon Association of Shipping Agents (CASA) and Ship Suppliers Association but there is no body to provide the much needed interface between them and examine issues in their entirety. Our experts with experience do not have access to provide collective inputs for policy making thus their expertise is lost to the country. To the present Ministry of Shipping and Ports, Shipping is only managing ports and that is at a loss, like most state owned enterprises. Ministry has turned its back to all other sectors of the industry.  Our women in business may be glad to learn, that in faraway Cayman Islands the world’s first Women in Shipping Conference was held from 5-9 Sep 2016, under the auspices of International Maritime Organisation (IMO), International Labour Organisation (ILO), Economic Commission for Latin America and the Caribbean (ECLAC) and the US Coast Guard. Although women outnumber males in our population, there are only three or four women in shipping, as in our parliament. The need for Sri Lanka to establish a research and development body is vital and urgent. The objectives should include, providing inputs for policy formulation, conducting useful studies and research, examining regional and international changes affecting Sri Lanka’s economy and security, organizing conferences and seminars, establishing libraries, facilitating publication of news and research papers. The Ministries of Foreign Affairs, Defence, Shipping and Trade should be associated. Above all, this body should be independent and non-political.Funding could be from the Shipping Development Fund established in 1971. I learnt from a reliable source that the fund had over rupees two hundred million deposited in a bank in the 1990s. Hope they were not used on sil redi.

(The writer was a Director of Merchant Shipping and shipping consultant to UNCTAD, UNIDO, FAO and ITC.)

 

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