ECONOMYNEXT – Sri Lanka’s Shipping Minister Mahinda Samarasinghe announced in parliament Tuesday that President Maithripala Sirisena was strongly opposed to liberalising the shipping and freight forwarding sectors proposed in the 2018 budget.
Samarasinghe lambasted Finance Minister Mangala Samaraweera for announcing in his maiden budget a proposal to remove the ban on foreign ownership of shipping and freight forwarding firms.
The finance minister had indicated that the restriction on foreign ownership of companies in the sector prevented the country from becoming a Singapore-style shipping hub in the Indian Ocean.
"This is not a subject for the finance ministry, nor should it have come up in the budget," Samarasinghe told parliament. "My ministry was not even consulted by the finance ministry before making this announcement."
He said he will oppose tooth and nail the move to liberalise the shipping sector which is currently dominated by powerful business interests linked to the former administration of Mahinda Rajapaksa.
"The President is firmly against this move. The SLFP (Sri Lanka Freedom Party of Sirisena) is also firmly opposed to this budget proposal," Samarasinghe said.
Finance minister Samaraweera said shipping liberalisation was essential if Sri Lanka wanted to be a key player in the Indian Ocean region.
"Restrictions on the foreign ownership on the shipping and the freight forwarding agencies will be lifted," Samaraweera said last month. "This will enable major international shipping lines and logistics operators to base their operations in Sri Lanka."
Though Sri Lanka started liberalising in the 1970s, all the shipping agencies were in an oligopoly controlled by a handful who wielded political connections, preventing the creation of a Singapore-style hub.
In logistics, special permission had to be given for one Japanese firm to buy a stake in a local logistics firm.
Minister Samaraweera said Sri Lanka Ports Authority Act enacted in 1979 and the Merchant Shipping Act, enacted in 1971 will be changed to "cater to the demands of the modern day logistics and marine industry."
(COLOMBO, November 28, 2017)