Finance and Media Minister Mangala Samaraweera, who presented his first budget last week, is now in a fresh soup over his move to liberalize the shipping and freight forwarding industry.
Mangala
The liberalization of the industry, which contributes to around $ 400 million, enables foreigners ease of entry into the Sri Lankan market. This controversial move, which jeopardizes the local shipping and freight forwarding industry, has resulted in the Finance Minister’s fellow Cabinet ministers ganging up against him, Colombo Telegraph reliably learns.
At the forefront of this battle is Ports Minister Mahinda Samarasinghe, a close ally of President Maithripala Sirisena, who has said in no uncertain terms that he will not let Samaraweera’s proposal pass.
Samarasinghe argues that his ministry, which is also the line ministry concerning the matter, has not been consulted before including the proposal in the budget.
“When this was proposed before, our ministry said firmly that it would completely destroy the local industry. But Mangala has arbitrarily included the proposal in the budget bypassing us. I am taking this very seriously,” Samarasinghe had told some of his Cabinet colleagues on the sidelines of the Cabinet meeting today.
Several leading shipping agents have also informed Samarasinghe of their grave concerns and urged him to raise this matter with the President. It is learnt that they have also lobbied several other influential Cabinet ministers.
Samarasinghe, who represents the SLFP, had said he would take it up with the President and push for rescission of the proposal.
Meanwhile, addressing a post-budget forum in Colombo on Monday, Finance Minister Samaraweera said changing the core principles of free enterprise and liberalisation was “non-negotiable”, indicating that he was not ready to backtrack on the matter.
“I would say nothing is cast in stone. We are willing to listen to suggestions where there may be anomalies to correct, but the basis of free enterprise is non-negotiable, liberalisation is non- negotiable. But within those parameters, certainly, we are willing to be flexible,” Samaraweera told the post-budget forum.
Despite the resistance from others in the local industry, from Maersk Line – the largest container shipping line globally and a prominent player in Sri Lanka, said it fully supported the 2018 budget proposal to open up the shipping and logistics sector to foreign investments and the introduction of an independent port regulator.
Steve Felder, Managing Director India, Sri Lanka and Bangladesh for Maersk Line in a statement issued on the subject mentioned “Maersk Line supports any efforts that governments make to liberalize and improve the business environment for the maritime industry, and for our customers. In this spirit, we commend the proposals tabled in the Sri Lankan parliament last week, which included removing the restriction on foreign ownership of shipping agencies & amendment of the Merchant Shipping Act, which are intended to further support the development of Colombo as a key Maritime hub.”
The statement said the liberalization of shipping agencies is expected to reduce transaction costs for carriers using Colombo as a transshipment hub thereby making it attractive for shipping lines like Maersk to further increase volumes especially given the growth of new transshipment hubs in this region.
Felder further said, “if the proposals tabled in the Parliament last Thursday which included removing the restriction on foreign ownership of shipping agencies, and the amendment of the Merchant Shipping Act, are approved, we will engage closely with our headquarters and our valued partners in Sri Lanka, and together evaluate options on increasing our footprint in Sri Lanka.”
Meanwhile, a Writ of Mandamus was filed by UPFA MP Vasudewa Nanayakkara against Minister Mahinda Samarasinghe and three others compelling the Minister to pass regulations under the provisions of the Merchant Shipping Act to prevent monopolization and cartelization of the shipping industry in Sri Lanka. (By Thilini Samarakkodi)
Nimal / November 14, 2017
Oh my God, when the foolish people of this God forsaken country would learn a lesson. By having government protections, these so called agencies and cartel, and business mafias are looting the people by lining up their pockets by charging unnecessary and exorbitant charges which add up the cost to every thing. If the country has to develop and people to have a better life, there should be healthy open competition in every thing which would bring out the best in people and every thing, and would give the best quality at affordable price to the people. By giving protections we kill all these, ultimately the consumer suffers by paying high price for shoddy goods and services, and only the few owners of these businesses get rich. When you give these kinds of protections our businesses get cozy, and they wouldn’t make any effort to move out to the open world markets. When JR established the Free Zones, foriegners’ set up garments factories, then our people picked it up from them, now without any protections, we have world class billion dollar garment companies operating in many countries employing hundreds of thousands of workers, and earning lords of foriegn exchange for the country. On tops of this, in every garments producing and consumering country thousands of our garments technicians and professional are working which brings lords of foreign remittance to the country. They would move the mountains but the President, PM and the government shouldn’t given into their pressures for they are moneyed and powerful lot, they are very selfish, and look into only themselves , and not the common man and the country which going get to immense benefit out of this.
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Jagath Fernando / November 15, 2017
Mangala
Well done. We need to end protectionism. See the ridiculous prices paid for shoes and tiles because both are protected. We could sell both these items at half the prices if a free market is allowed.
See how elk apparel companies are competing with the best in the world.
Imagine if there were no private sector involvement in the following :
1 telecoms
2 banks
3 insurance
4 hospitals
5 schools
6 transport
7 ports
8 tv stations
The growth in these sectors is unbelievable.
See what has hapenned to sectors where there is no private sector participation:
1 railway
2 water
3 electricity
4 postal
5 petroleum storage
This is the difference when you bring in competition.
Name of the game is competition.
Govt should not undertake any commercial activities.
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K.Pillai / November 14, 2017
As to whether this so-called liberalisation has merit or not is outside layman’s field to meaningfully comment.
This episode exposes something sinister. Probably Mangala felt that if this (or similar) is brought before cabinet, the full tenor of discussion will be leaked. Says it all for cabinet responsibility.
Mangala may be in a soup but we, the ‘silent majority’ are in an acharu.
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Siri / November 14, 2017
When I was small, my father went to many ministers to get into the priority list to get a phone connection which was a necessity for us and we were so frustrated for we were waiting for years like the several thousands on the waiting list. I once heard him saying, Mangala, before his opening up the phone market, and privatising it, the unions were such pain, he had to sent many of them to many countries where private phone companies were operating to see themselves and experience the benefits of it to those people. When I got phone to my place, I went to Suntel on a Saturday, filled up a card, didn’t pay any money , to our surprise on the following day Sunday evening around 6 PM the technicians came and installed the phone. I was amazed and thought was it SL. Then I checked up with them. They said that they were subcontractors, they were given monthly targets, and if they failed to achieve it, they would loose the contract, so night or day, rain or shine, they had to work to stay in business. Then about payment, they said, you had to pay it with the bill. This is how open and liberalised businesses operate, and in turn give benefits to the people. I’m sure Magala wouldn’t and shouldn’t given into their tantrums and monkey businesses of these agencies and cartle mafias so long as these measures give benefits to the country and common man instead of the few filthy rich owners.
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old codger / November 15, 2017
Yes, we must not forget that Mangala was the architect of the most successful privatization- Telecom- because of which we are even using CT today. Imagine using SLT’s pitiful “service” of the 80’s to access the Net!
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Sanjeewa / November 14, 2017
Interesting – In Dubai , I don’t think Maersk is fully owned by the Parent. They must be having a local sponsor with 51%. But Dubai is a major shipping hub.
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UKno-hoo / November 15, 2017
DUBAI is very rich country and Their port corporation tried to buy a port in the USA and was asked not to do that.
MAngala got $ 750 million grand from Millinium challenge corporation for politics, land reforms and for ports. So, Mangala wants to change the laws so that american companies, either directly or indirectly, can buy port terminals.
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Tiny Samat / November 16, 2017
Yes, Mearsk is with The Kanoo Group in the UAE, which JV has been in existence for many years and doing extremely well.
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Good Sense / November 15, 2017
Mangy! Congrats on your first budget presented well! If your mom was living today she would have felt proud. What requires is an efficient shipping hub. The port process must be fully productive, no delays. Some countries earn many times their GDP on trans-shipment alone. Mangy boy think of that. Just liberalization here or there is neither here nor there.
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Sanjay / November 15, 2017
Sanjeewa, do you know all those are changing in the Middle East. Sheikh Mohamed – ruler of Dubai – was requesting Apple Inc to set up shop in Dubai but they turned it down saying all what they should be totally and 100% owned by them. Later he did allowed them to operate with 100% ownership. They let Chinese to have self ownership to set up shop there, and let them visa free entry. They let Indians whose passports have visa stamps of EU/ US/ Canada/ Australia/ New Zealand to enter visa free. Now Oman is letting foreigners’ to set up businesses with 100% ownership. Saudis are giving green cards, letting them own businesses and properties for those long term foriegn residents of that country. Let all pilgrims to visit any part of the country as tourist before entry and exit only through Jeddah and Medina but now they could enter and exit through any ports. Even they are doing the unthinkable- selling the shares of Saudi Aramco and Subic. Kuwait has sold the state bus company, post office, even the Municipality of Kuwait City. All the Gulf countries are going to introduce VAT too. All of them are going big way into solar and wind power to get away from the petrol income. The present low oil prices, and the future out look for it making them to take these drastic measures to keep their countries going. We Sri Lankans are sleeping and sleep walking instead of preparing for it. Companies and the governments of those countries are sending off foriegn workers. We have over 1.5 millions of them, what the preparations done for them if most of them return to the country, and to meet the foriegn exchange short. Within a day, the Saudi Bin Ladin, the biggest contracting company in the Middle East let go of 50000 foriegn workers, most of them are Indians. Mr. Modi pleaded with the Saudis not to send them immediately for it would create huge social problem. Saudis gave time for them to find alternative employment else return to their countries. Only these good measures what they are doing now would keep our country going other wise we would sink to the bottom. All those socialists should get the lessons from Venezuela, being the country which has the largest petroleum reserves in the planet, now their people are scavenging the dirt bins to make a living. Chavez’s socialists experiment ruin that country and it’s people’s lives.
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Nimal / November 15, 2017
From my passed experience, it’s well and truly clear that we would be in the dark ages, be way behind Africa, and wouldn’t be able to read CT, if not for the opening up the telecommunications market to the open competition by Mangala and Madam Chandrika. All could see well the huge benefits it has brought to the country and the people, and it propelled SL to be in the forefront of the IT and telecom revolution which is shaping the world. These measures too would give benefits of such magnatiudes, and all should support it whole heartedly instead of making rich the few who own these business.
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Fathima / November 15, 2017
SL is poor because only a few want to be rich. Tradition!
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Park / November 15, 2017
This is a home and home game. May be the reasons are jealousy since there were rumors that Mangala may be appointed PM and also that Mangala is the Finance Minister. Mangala has always been clean. Wasn’t there a COPE report against Mahinda Samarasinghe before he joint Mahinda Rajapakse leaving UNP? Open economy is the order of the day. Even a communist country like China is today protecting and promoting open economy. The SL companies which are protesting against this move are companies where major shares are owned by those who made money during Mahinda Rajapakse time. These are the ones who are protesting. Let the market be open and let the market decide who will be successful, the time for protectionism is over.
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