Only five Sri Lankan companies control the agencies of shipping lines that account for 74% of the global shipping market and the market should be opened up, said Finance Minister Mangala Samaraweera.
Speaking at the 2018 Budget debate in Parliament on Saturday, where the Budget was passed with a two-thirds majority, he said that these five companies have an average age of 115 years.
“Whilst these companies have opposed liberalization of the sector, Sri Lanka’s apparel exporters (JAAF), the Tea Exporters Association of Sri Lanka and the Sri Lanka Exporters Association have all hailed the move to liberalise the shipping industry since it enables more competitive pricing and better services to the entire export industry.”
The Minister said that Sri Lanka should not undermine the interest of thousands of export companies and hundreds of thousands of their employees, to serve the interests of a handful of entrenched shipping agency companies.
“We need to encourage an environment of healthy competition that will drive innovation, service excellence, and growth. We will ensure that such competition will be fair and balanced, eliminating unfair trade practices by enacting prudent regulation.”
“This is why the proposal on shipping liberalization is coupled with the proposal to implement an independent regulator for the industry. We will discuss the modalities of implementation of these proposals with Minister Mahinda Samarasinghe, while taking note of his concerns.”
Commenting on the Hambantota Port PPP where US$ 292 million was released as the first tranche, he said the project will generate FDI, create exports and most importantly create jobs that will empower Sri Lankan youth.
By linking with global value chains in goods and services, taking advantage of the trade-investment nexus, Sri Lanka can truly fulfil its position as an economic hub of the Indian Ocean.
Minister Samarawera said that in addition to the liberalization of the shipping sector the Budget takes a similar approach to trade liberalization.
“Sri Lanka has become one of the most protectionist economies in the region with an array of tariffs and para-tariffs. In addition to driving up the cost of living and the cost of doing business, these tariffs have resulted in creating an anti-export bias and diverting economic resources to the non-tradable sector.
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