EconomyNext – Sri Lanka’s maritime industry is at a critical juncture with new ports able to handle the region’s burgeoning trade but major reforms are required to make best use of the opportunity, a senior industry official said.
"We’ve come a long way but is this the best we can reach?" asked Mangala Yapa, Secretary General and Chief Executive of the Ceylon Chamber of Commerce, the island’s main business chamber.
"Colombo port has gone through a humungous transformation from what it was. But have we realised it’s true potential?"
Yapa, former managing director of Colombo Dockyard, controlled by Japan’s Onomichi Dockyard Company, said new ports in Colombo and southern Hambantota built in recent years has expanded the island’s capacity to handle trade.
"We’re positioned on the intersection of major maritime routes and are close to major markets which gives us a comparative advantage," he declared, giving the P B Karandawala memorial lecture organised by the Chartered Institute of Logistics and Transport, Sri Lanka.
"Infrastructure development is important but not enough. Our overall capacity has to be developed, especially human resources," Yapa said.
"Critical structural and legal reforms are inevitable," he added, noting, for example, the need to change labour laws that companies complain are too favourable towards employees.
Yapa said the concept of Sri Lanka as a maritime hub is a rational and valid initiative, creating potential for it to exploit in the emerging global scenario dominated by rapidly growing Asian trade.
"It needs to be looked at from a very holistic and multi-sectoral perspective – looking at the big picture," he said.
"The industry needs to rapidly transform itself to a fully integrated and unified one. Our vision has to be integrated, shedding our differences.
"And we must work towards championing a national vision and not an individual or sectoral one, with all stakeholders involved."
Sri Lanka could be positioned as a multi-pronged hub connecting Africa, South and Central Asia, with naval, maritime, distribution and logistics aspects.
Yapa said Asia, which accounted for almost half the world’s economic output, before the industrial revolution, is regaining its momentum.
"The balance has swung back in favour of Asia," he said, noting that in just five years – by 2020 – Asia’s share of world trade would be 35 percent, up from 30 percent in 2010.
"By 2020 six Asian economies will be in the top 10 – China, Japan, India, South Korea, Singapore and Hong Kong. We’re in the middle of these economies. World trade by 2020 is forecast to be 86 trillion US dollars."
The annual lecture is to honour Karandawala, an economist with the rare distinction of serving as chairman in the 1970s of three state transport entities in different fields.
These were Ceylon Shipping Corporation, Air Ceylon (as the national carrier was formerly known) and Ceylon Transport Board, the national bus service.
Karandawala, an economist turned transport specialist who also served in the United Nations, is held in high esteem by the maritime community for his contribution to the country’s transport and logistics sector.